While MCA has already proved its metal by digitizing the entire filings to be done with the Registar of Companies, it is now getting ready for XBRL reporting of annual accounts, whcih may prove to be yet another milestone in Corporate Compliance Filings, following International Standards.
As per General Circular No. 09/2011 issued by MCA on 31st March, 2011, Companies are required to file their financial statements in the XBRL format with the Registrar of Companies (RoC) for the year ended 31 March, 2011 as per the following criteria:
(i) All companies listed in India & their subsidiaries in India and abroad; &
(ii)All companies having a Paid up Capital of Rs. 5 Crores & more or a Turnover of Rs. 100 Crores & above
However, Experts opine that The ministry of corporate affairs (MCA) needs to do more to prepare for the filing of balance sheets and profit and loss accounts in the XBRL (eXtensible Business Reporting Language) format. This includes having a taxonomy, relevant documentation, training company personnel and preparing a vendor gateway, among other things.
The XBRL requirement is part of the shift to norms in line with International Financial Reporting Standards (IFRS). The first phase of filing returns using XBRL will be effective 1 July for all listed companies and their units and firms with a paid-up capital of Rs.5 crore or a turnover of Rs.100 crore and above. It will later be extended to all 900,000 companies.
The ministry™s circular makes no mention of the uploading process. A poorly handled migration can result in the data throwing up errors. The MCA also needs to decide on an extended taxonomy that will allow for interchangeable terms, such as turnover and revenue, which US companies are free to use but are not allowed by the International Accounting Standards Board (IASB). IASB has set the guidelines for the norms that India is adopting.
MCA, with the help of the Institute of Chartered Accountants of India (Icai), has developed a taxonomy so that a common database can be created for the use of all regulators and government departments, he said.
Training will not be a problem, said G. Ramaswamy, president of ICAI. We (ICAI) are conducting XBRL training programmes across five regions. By the end of this month a large number of CAs (chartered accountants) will be XBRL literate, said Ramaswamy.