All about XBRL Applicable to Listed Companies and companies having a paid up capital of Rs.

5 Crore and above or a turnover of Rs. 100 crore or above eXtensible Business Reporting Language (XBRL) is an open technology standard which makes it possible to store business and financial information in a computer-readable format. Many countries and/or financial regulators have approved, or are in the process of implementing, requirements around XBRL as the electronic financial reporting standard. These include the US, Japan, UK, Netherlands, Australia & China to name a few. On 1 April 2011, the Ministry of Corporate Affairs (MCA) in India posted a circular on its website requiring certain class of companies (Phase 1) to file balance sheets and profit and loss accounts for the year 2010-11 onwards by using XBRL. The financial statements required to be filed in XBRL format will be based upon the taxonomy on XBRL developed for the existing Schedule VI and non-converged accounting standards notified under the Companies (Accounting Standards) Rules, 2006. As per the circular, the following class of companies will be considered as Phase 1 and will have to file their Financial Statements in XBRL from the year 2010-11:i. ii. All companies listed in India and their subsidiaries, including overseas subsidiaries All companies having a paid up capital of Rs. 5 Crore and above or a turnover of Rs. 100 crore or

above This represents a significant change in the manner in which companies are required to share financial information with regulatory authorities. XBRL will facilitate the transmission of data in electronic form between companies and different regulatory agencies in India, and has the potential to increase comparability and transparency of financial information. Companies have a short period of time less than six months to convert financial statements into the new format, which means that technology solutions need to be put in place very swiftly and finance teams need to swiftly get to grips with the XBRL terminology and taxonomy. Given the short timeframe, initial solutions are likely to be bolt-on rather than bottom up in nature. We welcome the MCAs circular on XBRL, and would look for immediate publication of the taxonomy and further clarification on a number of questions highlighted in this document to enable companies to put in place the necessary technology and processes to produce robust XBRL data. In this document, we set out an overview of XBRL, why it is being implemented in India, the requirements of the circular, critical issues for companies in planning the production of XBRL data and some points that require further clarification by the MCA. Since these questions can only be conclusively answered by the MCA, companies are advised not to treat our perspectives as authoritative guidance. On critical issues, they should consult the MCA or take legal/ professional advice. Phase 1 companies have a short time-frame to prepare for XBRL filing of 2010 11 financial statements Introducing XBRL XBRL is the financial and operational business reporting offshoot of eXtensible Markup Language (XML), which is a freely licensable, open technology standard (or vocabulary) used to exchange business

information electronically. XML is the universally preferred data description language used to describe the storage, manipulation and exchange of data via the internet. The basis for XBRL is a tagging process where each value, item, descriptor, etc., in the exchanged information can be given a unique set of tags to describe it. Using these tags, computer programs can read the data without human intervention. Tags are commonly used to exchange information, such as an account balance. XBRL leverages groups of tags in the form of a taxonomy, or classification system, to describe data for a particular audience. XBRL is being positioned as the vocabulary of business and financial reporting. It is a way to bar code business information contained in general ledgers, income and cash flow statements, balance sheets, as well as text information included within the footnotes and other requirements of business reporting. XBRL is: o o An open technology standard for reporting and analyzing business and financial information Software agnostic, or independent

o Accounting framework neutral XBRL is not: o o o o A standardized chart of accounts A way to require the reporting of specific information A transaction level activity (although it can summarize general ledger transactions) Automatically compliant with International Financial Reporting Standards it only tags the existing

financial data prepared under existing AS Key takeaways o o XBRL involves machine-readable tagged data (meta-data, or data about data) and is fast becoming the digital standard for communicating business and financial information. Computers can treat XBRL data intelligently applications can recognize the information in an XBRL document, select it, analyze it, store it and exchange it with other applications, and present it automatically in a variety of ways for users. o A useful analogy is to think of XBRL as bar coding where applications can automatically identify each piece of data and specific information about it, such as value, type, currency, date, source and its relationships with other data. How XBRL works Instead of treating financial information as a block of text, XBRL provides a computer-readable tag to identify each individual item of data. Through the attachment of identifying tags to individual pieces of data, a business reporting document becomes intelligent data, allowing the exchange of business reporting data by encoding the information in a meaningful way. Computer applications can use the XBRL data to recognize the information in an XBRL document, select it, analyze it, store it, exchange it with other computers and present it in a variety of ways for users. XBRL tags are defined and maintained in taxonomies which contain meta-data (data about data). Taxonomies are the basis for tagging financial and business information in XBRL. A taxonomy is an electronic classification system of tags defining thousands of business reporting concepts (including text) and their relationships.

The taxonomy provides organization and details for each concept, including the labels, definitions, accounting balance (i.e., debit or credit), presentation and summation information. A taxonomy for India based on the existing, non-converged Accounting Standards and existing Schedule VI to the Companies Act has already been developed by the MCA and we understand that it will be made available shortly. An instance document is the end result of how a preparer creates XBRL data. It contains report information typically compiled from internal ERP or financial reporting systems that have been marked up or tagged in XBRL. Figures 1 and 2 below show the inter-relationships between the various elements of XBRL. Companies will use the India taxonomy based on non-converged Accounting Standards and existing Schedule VI. XBRL is extensible (i.e., can be extended) since a preparer can create, define and describe new tags unique to its particular circumstances, while otherwise maintaining the comparability of other information tagged using the standard taxonomy. XBRL was designed to be flexible and is intended to support aspects of electronic financial reporting across countries and industries. Tagging financial data in XBRL is similar to the use of bar codes. The bar code was created to electronically identify different products. Similar to a bar code, applications that utilize XBRL data can automatically identify each piece of data and specific information about it, such as value, type, currency, date, source and its relationships with other data. XBRL and the financial and business reporting supply chain With increased interest in financial reporting transparency and the availability of advanced information technology tools, there is a greater focus now on supplying more information on a timely basis to external stakeholders. While the format in which this information needs to be supplied is evolving, there is an increasing need for information to be available in electronic formats. Business reporting information supplied by one organization is often used as input for the processes of another organization. This process is often referred to as the information supply chain. The financial and business reporting information supply chain (see Figure 3) is a model that describes the information disclosure process, from the start of the transaction within the primary and support processes, to the use of reporting information by stakeholders. Given the changing demand for reporting information and the increasing opportunities in the field of information technology, the existing information supply chain should change substantially as a result of XBRL. For example, in the external part of the information supply chain, once a company has published information, stakeholders, such as analysts and lenders, can use the information to form a picture of business performance during that reporting period. Depending on the interests of the stakeholders, the data supplied can be filtered and analyzed to obtain the desired information. As a result, analysts and lenders should spend less time on processing data and be able to invest more time in detailed and meaningful analyses through XBRL. What are the benefits of XBRL for India? The introduction of XBRL in India will increase the ability of different regulatory bodies to use the same electronic data set, without the need for manual re-keying of data or sending hard copies of documents to

different bodies. For example, the same financial data with XBRL tagging can be filed with the Ministry of Corporate Affairs to meet Companies Act requirements, shared with SEBI and the BSE/NSE to meet listing requirements, provided to the companys lending institutions, and uploaded to the companys website so that shareholders can easily access it. Although there is no explicit mention of taxation in the MCAs circular, the information may also be used by the direct and indirect tax boards and other regulatory bodies who currently require information in different formats. Once a company has put in place the taxonomy for these different bodies, the process to produce the information becomes more efficient. Furthermore, companies can benefit from automation of data collection internally, depending on the existing IT systems in place. For example, data from different company divisions with different accounting systems can be assembled quickly, cheaply and efficiently. Once data is gathered in XBRL, different types of reports using varying subsets of the data can be produced with minimum effort. A company finance division, for example, could quickly and reliably generate internal management reports, financial statements for publication, tax and other regulatory filings, as well as credit reports for lenders. Not only can data handling be automated, removing time-consuming, error-prone processes, but the data can be checked by software for accuracy. Whilst the introduction of XBRL in India may increase efficiency of sharing information with national regulators, it does not by itself help with the goal of achieving convergence of Accounting Standards with International Financial Reporting Standards. The MCA and ICAIs efforts in this direction continue to be of vital importance to users and preparers. Potential benefits of XBRL

Better Accuracy

Faster No rekeying

Cheaper Automated Software independent Less effort to use

Accessibility Instant user access Analysis More frequent updates

What are the learnings from other countries that have implemented XBRL? Other countries such as the US and UK have already mandated XBRL filing or are in the process of doing so. Companies experienced some challenges in implementing XBRL. For example, inexperienced staff may make simple errors such as selecting different tags for the same item, creating extensions (new tags) when a tag already exists for that item, or tagging an item with the wrong directional sign (debit or credit). All this underlines the importance of trained staff performing the tagging process, having a robust audit trail to document the rationale for tag selection that can be followed in subsequent years, and a strong review process, possibly utilising one of the available software tools to facilitate the review. Some companies opted to obtain additional assurance from their auditors or advisors on the initial XBRL tagging in year one, to give management additional comfort over the correctness and completeness of the XBRL information. Who is leading the XBRL initiative?

The XBRL movement is being governed by XBRL International; a not-for-profit consortium comprised of several working groups, and governed by a central steering committee comprised of elected members from the established jurisdictions. XBRL International includes approximately 25 established and provisional local jurisdictions, which focus on the progress of XBRL in their region. The steering committee coordinates the working groups and has responsibility for setting technical, financial and operational strategy within the organization. Workgroups have an international and jurisdictional focus. Over 650 entities worldwide are involved in the various XBRL jurisdictional organizations including public accounting firms, technology companies, governmental entities, academia and other organizations. India is now an established jurisdiction of XBRL International. A separate company, under Section 25 has been created, to manage the operations of XBRL India. The main objectives of XBRL India are: o o To create awareness about XBRL in India To develop and maintain Indian Taxonomies

o To help companies adopt and implement XBRL. Information technology changes What kind of IT changes will be required in order to produce XBRL information? There are a number of ways to create financial statements in XBRL: o o Financial statements can be mapped into XBRL using XBRL software tools and applications designed for this purpose, i.e. outside of the existing accounting software. XBRL-aware accounting software products may be utilized which will support the export of data in XBRL form. The software should allow users to map charts of accounts and other structures to XBRL tags as defined by different taxonomies, e.g. MCA taxonomy for Schedule VI. o Data from accounting databases can be extracted using third party products, outside of the existing software vendors, to achieve the transformation of the data to XBRL. The route which an individual company may take will depend on internal and external requirements, accounting software and systems it currently uses, organizational structure, the number of subsidiaries that require XBRL data, among its other factors. Companies should carefully assess and consider the various available options before committing to a particular solution strategy. Is any form of validation or assurance required on the XBRL format submitted information? The circular does not explicitly require auditor (or any other third party) attestation or validation of the XBRL format information submitted. Clarity on this topic is critical as professional firms would need to prepare themselves internally accordingly as per the requirements of the XBRL standards. Matters that need further clarification from the MCA Coverage related Financial information from which financial year should be considered to determine applicability of XBRL filing? This issue is not specifically addressed in the circular. In the absence of any further guidance, it may make sense to assess the listing status and paid up capital criteria as at 31/3/2011 (or next balance sheet date) and turnover criteria for the financial year ended on the same date.

Where in doubt, for example a company whose turnover for 2009-10 was greater than Rs. 100 crore but 2010-11 turnover was below the threshold, we would recommend that entities err on the side of caution and prepare the requisite information in XBRL format. Are subsidiaries, joint ventures & associates of phase 1 companies also required to file their financial statements using XBRL? As per the circular all subsidiaries, including foreign subsidiaries, of companies listed in India are to file their financial statements using XBRL. There is no specific mention of XBRL filing requirements for subsidiaries of companies qualifying under the other criteria, i.e. those with a paid up capital of Rs. 5 crore or above or a turnover of Rs. 100 crore or above. Further the circular does not state any XBRL filing requirements for associates and/or joint ventures of companies covered in Phase 1. It is suggested that companies obtain clarification from the MCA with regards to filing requirements for their subsidiaries, associates & joint ventures. Taxonomy What taxonomy should be utilized for XBRL reporting? The circular requires that the financial statements required to be filed in XBRL format would be based upon the taxonomy on XBRL developed for the existing Schedule VI, as per the existing (non converged) Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006. The taxonomy has not yet been released by the MCA but is expected to be issued shortly as per the circular. In particular it should be noted that whilst a revised Schedule VI has recently been released by the MCA, which is applicable for the financial year 2011- 12 onwards, the XBRL taxonomy expected to be released is based on the current Schedule VI. This may result in a revised taxonomy being released for the next reporting period based on the new Schedule VI, resulting in companies effectively having to re-tag all their information as per the new requirements. Will extensions to the taxonomy for company specific requirements be allowed? The circular does not explicitly mention as to whether extensions to the base taxonomy may be allowed. We recommend that the MCA provide such guidance when releasing the taxonomy. What taxonomy will be required for filing of financial statements of overseas subsidary? The taxonomy is heavily dependent on the definitions and disclosures in Accounting Standards and Schedule VI. There would be additional disclosures required by Accounting Standards over and above those required by Schedule VI. Additionally there would be challenges if the subsidarys financial statements are not prepared in English language. Companies would require guidelines from the MCA on this. Filing requirements Do complete financial statements, including disclosures, need to be filed or only the Balance Sheet and Profit & Loss account?

Broadly there are three implementation methodologies with regards to XBRL reporting which are explained as below: i. Abridged taxonomy: This may require the reporting of only select information, say the profit & loss

account and balance sheet numbers, using XBRL format. ii. Financial only taxonomy: This may require the reporting of all financial related information, including

those contained in the notes, using XBRL taxonomy. Non-financial information may be reported in a nonXBRL format. iii. Complete taxonomy: This would require the tagging of all information using XBRL, and for which, a

complete taxonomy would be released. As can be noted from the above, the level of effort may vary significantly depending on the reporting requirements. The circular itself does not provide much clarity on this issue however the taxonomy, when released, may provide further insights into the MCA requirements for Phase 1 companies. When is the XBRL format filing deadline? As per the circular, companies covered in Phase 1 are permitted to file upto 30 September 2011 without any additional filing fee. Is XBRL format reporting an additional requirement or a replacement for existing reporting methodology? The circular does not clarify as to whether, for companies covered in Phase 1, XBRL format reporting is an additional requirement or a replacement for existing reporting methodology. It is suggested that companies obtain further guidance from the MCA on this issue. What is the XBRL information filing methodology to be followed? The circular does not provide further guidance as to the filing methodology, i.e. upload process, of the requisite XBRL information. We would expect that the MCA provides further guidance on this important issue.

Related posts: 1. ICAI asked government to mandate all companies to file their financial statements in XBRL format 2. Exposure draft of XBRL (eXtensible Business Reporting Language) Banking Taxonomy 3. MCA plan to introduce XBRL as reporting language for its MCA 21 portal 4. Compulsory Filing of Balance Sheet and profit and Loss Account in eXtensible Business Reporting Language (XBRL) mode 5. Companies may have to file balance sheet in XBRL form from July 2011

ARTICLES 2:

CS S. Dhanapal

SECTION A XBRL FILING OF FINANCIAL STATEMENTS XBRL is the acronym for Extensible Business Reporting Language. As the name itself suggests, it is a language for presentation of data which permits easy analysis and interpretation thereby reducing cost, time and effort. It promotes paperless reporting and thus is in line with the green initiatives being promoted world over. XBRL is only a method of presentation or reporting. It does not attempt to make any changes in the content to be reported. The idea behind XBRL is simple. Instead of treating financial information as a block of text as in a standard internet page or a printed document it provides an identifying label (tag) for each individual line item of data. This data then becomes computer readable. Ministry of Corporate Affairs introduced the concept of XBRL filing of financial statements to ROC by mandating certain class of companies to file balance sheets and profit and loss account for the year 2010-11 onwards by using XBRL taxonomy. On 05 October 2011, Companies (Filing of documents and forms in Extensible Business Reporting Language) Rules, 2011 were notified. UNDERSTANDING XBRL THROUGH THE CONCEPT OF 5 WS
th

Applicability

Due Date for filing (for FY 11-12)

Non-XBRL Filing The Ministry issued General Circular No.30/2012 Dated 28.09.2012, In order to ensure smooth filing and to avoid last minute rush, the due date of filing of e-forms 23AC(Non-XBRL) and 23ACA (Non XBRL) as per new schedule VI is extended in following manner without any additional fee :Company holding AGM or whose due date for holding AGM is on or before 20.09.2012, the time limit will be 03.11.2012 or due date of filing, whichever is later.

Company holding AGM or whose due date for holding AGM is on or after 21.09.2012, the time limit will be 22.11.2012 or due date of filing, whichever is later. XBRL Filing As per General Circular No. 16/2012 issued by the Ministry of Corporate Affairs on 6th July 2012, all companies referred to in para 2 of the said circular will be allowed to file their financial statements in XBRL mode without any additional fee/ penalty up to15th November, 2012 or within 30 days from the date of their AGM, whichever is later. XBRL filing for the financial year 2011-12 is not enabled by MCA as yet since the validation tool is still under finalization. Recently, MCA has come out with the beta version of the validation tool which is likely to be made effective from 14th October 2012. MCA XBRL Validation Tool ensures that only those XBRL documents; that satisfy the requirements of Taxonomy and Business Rules, are filed with MCA under section 220 of the Companies Act, 1956. MCA Validation Tool is an important mean for improving the quality of financial information/disclosures in XBRL. Successful validation of the instance document is a pre-requisite before filing the balance sheet and profit & loss account on MCA portal. It may, however, be noted that mere successful validation of an XBRL document by the MCA Validation Tool does not mean that the provisions under section 211 of the Companies Act, 1956 have fully been complied with. It is important to ensure that this validated XBRL document also provides a true and fair view of the state of affairs of the company as per financial statements adopted in the AGM. MCA XBRL Validation Tool also provides the human-readable pdf version of the XBRL document for ease in authentication and certification of the XBRL document being filed by the company to MCA. SECTION B XBRL FILING OF COST AUDIT AND COMPLIANCE REPORT Ministry of Corporate Affairs have come out with a number of circulars and notifications in the recent times relating to maintenance of Cost Accounting Records and Cost Audit. These circulars and notifications have not only brought remarkable changes in the applicability of cost accounting and audit rules but have introduced a number of new requirements like obtaining of Cost Compliance Report, filing of reports in XBRL mode, fees for appointment of cost auditor etc. These announcements and changes have created a lot of perplexity in the minds of the readers regarding the applicability of the revised rules. Moreover, since the onus of compliance has been shifted from the legislator to the company, it becomes even more vital to understand the changes and their implications. For ease of understanding, we have divided this section into 2 parts 1. Maintenance of Cost Accounting Records and Filing of Cost Compliance Report 2. Appointment of Cost Auditor and filing of Cost Audit Report Maintenance of Cost Accounting Records and Filing of Cost Compliance Report Notification

The Companies (Cost Accounting Records) Rules, 2011 were notified on 03rd June 2011 vide notification no. G.S.R. 429(E), issued by the Ministry of Corporate Affairs in exercise of the powers conferred by section 642(1)(b) read with section 209(1)(d) of the Companies Act, 1956. These rules are in supersession of all Cost Accounting Record Rules issued so far. Applicability

These rules shall apply to every company, including a foreign company as defined under section 591 of the Act which is engaged in the production, processing, manufacturing, or mining activities and which satisfies any one of the following criteria

These rules shall not apply to the following class of companies o o A company which is a body corporate governed by any special Act Activities or products covered in any of the following Industry Specific rules:

(a) Cost Accounting Records (Bulk Drugs) Rules, 1974 (b) Cost Accounting Records (Formulations) Rules, 1988 (c) Cost Accounting Records (Fertilizers) Rules, 1993 (d) Cost Accounting Records (Sugar) Rules, 1997 (e) Cost Accounting Records (Industrial Alcohol) Rules, 1997 (f) Cost Accounting Records (Electricity Industry) Rules, 2001 (g) Cost Accounting Records (Petroleum Industry) Rules, 2002 (h) Cost Accounting Records (Telecommunications) Rules, 2002 In supersession of the aforesaid Rules, following industry specific Cost Accounting Records Rules were notified: 1. Cost Accounting Records (Telecommunication Industry) Rules 2011 notified vide GSR 869(E) dated December 7, 2011 2. Cost Accounting Records (Petroleum Industry) Rules 2011 notified vide GSR 870(E) dated December 7, 2011. 3. Cost Accounting Records (Electricity Industry) Rules 2011 notified vide GSR 871(E) dated December 7, 2011. 4. Cost Accounting Records (Sugar Industry) Rules 2011 notified vide GSR 872(E) dated December 7, 2011. 5. Cost Accounting Records (Fertilizer Industry) Rules 2011 notified vide GSR 873(E) dated December 7, 2011. 6. Cost Accounting Records (Pharmaceutical Industry) Rules 2011 notified vide GSR 874(E) dated December 7, 2011. o Whole sale of retail trading activities.

Banking, financial, leasing, investment, Insurance, education, healthcare, tourism, travel, hospitality, recreation, transport services, business/professional consultancy, IT & IT enabled services, research & development, postal/courier services, etc. unless any of these have been specifically covered under any other Cost Accounting Records Rules.

Companies engaged in rendering job work operations or contracting/sub-contracting activities, and are paid only the job work or conversion charges, such as tailoring, baking, repairing, painting, printing, constructing, servicing, etc.

o o

Companies engaged in the production, processing, manufacturing or mining activities till such time they commence their commercial operations. Ancillary products/activities of companies incidental to their main operations (i.e. products/activities that do not constitute their main line of business) and wherein the total turnover from the sale of each such ancillary products/activities do not exceed 2% of the total turnover of the company or Rs.20 crores, whichever is lower. Maintenance of Records

Filing of Compliance Report

Due date for filing under XBRL mode

As per General Circular No. 8/2012 dated 10.05.2012, MCA had notified that XBRL filing for Cost Compliance Report will be enabled after 30.06.2012 which was modified to 31.07.2012 vide Circular dated 29.06.2012. Thereafter vide General Circular No. 18/2012 dated 26.07.2012, MCA has further extended the due date to 31.12.2012. As per the XBRL website maintained by MCA, the Validation Tool for XBRL filing of Compliance Report to MCA is presently under development. Filing can be enabled only after the validation tool is ready. Format of Compliance Report and Form for filing

APPOINTMENT OF COST AUDITOR AND FILING OF COST AUDIT REPORT Procedure for Appointment of Cost Auditor

The Companies (Cost Audit Report) Rules, 2011

v Notification The Companies (Cost Audit Report) Rules, 2011 were notified on 03rd June 2011 vide notification no. G.S.R. 430(E), issued by the Ministry of Corporate Affairs in exercise of the powers conferred by section 642(1)(b) read with section 233B(4) and Section 227(1) of the Companies Act, 1956. These rules are in supersession of the Cost Audit Report Rules, 2001. v Applicability o o These rules shall apply to every company in respect of which an audit of the cost records has been ordered by the Central Government under sub-section (1) of section 233B of the Act. Vide order reference number F.NO. 52/26/CAB-2010 dated 30.06.2011 (for FY 10-11) and F.NO. 52/26/CAB-2010 dated 24.01.2012 (for FY 11-12) Central Government has ordered Cost Audit for following class of companies

o o o o o

All Companies to which The Companies (Cost Accounting Records) Rules, 2011 apply, AND Which are engaged in production, processing, manufacturing or mining of products/activities given in table below, AND Wherein the aggregate value of the turnover made by the company from sale or supply of all products or activities during the immediately preceding financial year exceeds rupees 100 crores, OR Wherein the companys equity or debt securities are listed or are in the process of listing on any stock exchange, whether in India or outside India. Products/Activities include intermediate or allied products and articles. Clarification regarding meaning of intermediate/allied products and their examples is given in General Circular No. 67/2011 dated

30.11.2011. Products/Activities to which cost audit is applicable for FY 10-11 (F.NO. 52/26/CAB-2010 dated 30.06.2011)

S.No.

Name of Industry

Relevant Chapter Heading of the Central Excise Tariff Act, 1985 Chapter 25, 38 and 68 Chapter 40 Chapter 72 and 73 Chapter 47 and 48 Chapter 30 Chapter 70 Chapter 32 Chapter 76

1. 2. 3. 4. 5. 6. 7. 8.

Cement Tyres & Tubes Steel Paper Insecticides Glass Paints & Varnishes Aluminum

Products/Activities to which cost audit is applicable for FY 11-12 F.NO. 52/26/CAB-2010 dated 24.01.2012

S.No.

Name of Industry

Relevant Chapter Heading of the Central Excise Tariff Act, 1985

1. 2. 3.

Jute, cotton, silk, woolen or Chapters 50 to 63 blended fibers/textiles Edible oil seeds (incl.vanaspati) and Oils Chapters 12 and 15 Chapters 2 to 25 (except Chapters 5, 6, 14, 23 and 24) Chapters 28, 29, 32, 38 and 39 Chapter 27

Packaged food products

4. 5. 6.

Organic & Inorganic Chemicals Coal & Lignite

Mining & Metallurgy of ferrous & Chapters 26 and 74 to 83 (except nonferrous metals Chapters 76 and 77) Tractors & other motor vehicles Chapters 84, 85 and (incl. automotive components) 87 Plantation Products Chapters 8, 9, 21 and 40,

7. 8. 9.

Engineering machinery (incl. Chapters 84 and 85 electrical & electronic products)

Generation of electricity for captive consumption Own manufactured products that are consumed exclusively by the company for the sole purpose of production, processing, manufacturing, or mining of its other product or activities that are subject to cost audit.

These rules shall not apply to the following class of companies o o

All units located in SEZs, EPZs, FTZs & 100% EOUs (refer general Circular No. 11/2012 dated

25.05.2012 for more details) v Cost Audit Report

v Filing of Cost Audit Report in XBRL Ministry of Corporate Affairs has mandated filing of the Cost Audit Report and Compliance Report from the financial year 2011-12 onwards (including overdue reports relating to any previous year) by using the XBRL taxonomy vide General Circular No. 8/2012 dated 10.5.2012 [as amended on 29.6.2012] and No. 18/2012 dated 26.7.2012. All such companies that are NOT covered under the company specific Cost Audit Orders issued prior to 31.3.2011 and/or under the industry specific Cost Audit Order No. 52/26/CAB-2010 dated 2nd May 2011, 30th June 2011 and 24th January 2012 are not required to file Cost Audit Report. However, companies meeting with the threshold limits as prescribed in the relevant Cost Accounting Records Rules 2011 are required to file Compliance Report in the XBRL format. Due date for filing Cost Audit and Compliance Report, without additional fees has been notified as31.12.2012 as per General Circular No. 18/2012 dated 26.07.2012. The Validation Tool for XBRL filings of Cost Audit & Compliance Report to MCA is presently under development. Table of Relevant MCA Circulars and Notifications

Reference No General Circular No: 18/2012 General Circular

Date

Description

Filing of Cost Audit Report and Compliance 26.07.2012 Report in eXtensible Business Reporting Language (XBRL) mode. 06.07.2012 Filing of Balance Sheet and Profit and Loss Account in Extensible Business Reporting

No. 16/2012

Language (XBRL) Mode for financial year commencing on or after 1.4.2011. Filing of Cost Audit Report (Form-1) and Compliance Report (Form-A) in the 29.06.2012 eXtensible Business Reporting Language (XBRL) mode. Filing of Cost Audit Report (Form-1) and Compliance Report (Form-A) in the 10.05.2012 eXtensible Business Reporting Language (XBRL) mode. Filing of Balance Sheet and Profit and Loss 30.11.2011 Account in eXtensible Business Reporting Language (XBRL) mode Cost Accounting Records and Cost Audit 30.11.2011 clarifications regarding applicability and compliance requirements Cost Accounting Records and Cost Audit 30.11.2011 clarifications about coverage of certain sectors thereunder The Companies (Central Governments) 05.10.2011 General Rules and Forms(Amendment) Rules , 2011 The Companies (Filing of documents and 05.10.2011 forms in Extensible Business Reporting Language) Rules, 2011 Filing of Balance Sheet and Profit and Loss 07.07.2011 Account in eXtensible Business Reporting Language(XBRL) mode

Circular

General Circular 08/2012 General Circular No: 69/2011 General Circular No: 68/2011 General Circular No: 67/2011 G.S.R.(E)

G.S.R.(E) General Circular No:

43/2011 General Circular No: 37/2011 Filing of Balance Sheet & Profit & Loss 07.06.2011 Account in eXtensible Business Reporting Language (XBRL) mode

General Certification of e-Forms under the Companies Circular 18.05.2011 Act, 1956 by practicing professionals No:26/2011 General Filing of Balance Sheet and Profit and Loss Circular 31.03.2011 Account in eXtensible Business Reporting No:09/2011 Language( XBRL) mode
FAQs ON COST AUDIT AND COMPLIANCE REPORT FILING (Source: http://www.mca.gov.in/XBRL/Ques_Stake1.html) 1. Which are the companies that need to file the Cost Audit Report and Compliance Report in XBRL format? Ministry of Corporate Affairs has mandated filing of the Cost Audit Report and Compliance Report from the financial year 2011-12 onwards (including overdue reports relating to any previous year) by using the XBRL taxonomy. The relevant General Circular No. 8/2012 dated 10.5.2012 [as amended on 29.6.2012] and No. 18/2012 dated 26.7.2012 issued by MCA can be accessed from the following link: http://www.mca.gov.in/Ministry/companies_act.html. 2. Which companies are not required to file the Cost Audit Report? All such companies that are NOT covered under the company specific Cost Audit Orders issued prior to 31.3.2011 and/or under the industry specific Cost Audit Order No. 52/26/CAB-2010 dated 2nd May 2011, 30th June 2011 and 24th January 2012 are not required to file Cost Audit Report. However, companies meeting with the threshold limits as prescribed in the relevant Cost Accounting Records Rules 2011 are required to file Compliance Report in the XBRL format. 3. Which companies are exempted from filing the Compliance Report? All such companies that are not covered under any of the Cost Accounting Records Rules notified in 2011 are not required to file the Compliance Report. Further, as per MCAs General Circular No. 68/2011 dated 30.11.2011 read with the General Circular No. 12/2012 dated 4.6.2012, such companies that are covered under any of the Cost Accounting Records Rules notified in 2011 but wherein all their products/activities, excluding the exempted categories, are covered under cost audit, are not required to separately file the Compliance Report. 4. If my Cost Audit Report pertains to the financial year prior to 2011-12, then do I need to file the report in XBRL format?

As per MCAs General Circular No. 8/2012 dated 10.5.2012, all Cost Audit Reports required to be filed with the Central Government starting from financial year 2011-12 and also in respect of any financial years prior to 2011-12 [that has not been filed so far] need to be filed in XBRL format. 5. Central Government vide General Circular no. 18/2012 dated July 26, 2012 has extended filing of the Cost Audit Report in XBRL format till December 31, 2012. A company follows different financial year viz. from October 01, 2011 to September 30, 2012. As per Companies (Cost Audit Report) Rules, 2011, filing of Cost Audit Report becomes due by March 27, 2013, i.e. within 180 days from the end of the reporting year. Is this company still required to file the Cost Audit Report in XBRL format by December 31, 2012 or it would be allowed to file the report until March 27, 2013? The companies are required to file their Cost Audit Report [or the Compliance report] for the year 2011-12 within 180 days of the close of the financial year or by December 31, 2012, whichever is later. 6. Who will certify XBRL filing for Cost Audit Report? The Cost Auditor [or the lead Cost Auditor in case the company has more than one Cost Auditors] is required to digitally sign and file the Cost Audit Report for the company as a whole. 7. Who will certify XBRL filing for Compliance Report? Any valid Member of the Institute of Cost Accountants of India who is either in full-time employment with the concerned company or is holding full-time Certificate of Practice can only certify the Compliance Report. 8. I am holding valid membership of the Institute of Cost Accountants of India as well as of the Institute of Company Secretaries of India. As a full-time employee of the company, can I certify its Compliance Report? Yes, being a valid Member of the Institute of Cost Accountants of India and in full-time employment with the concerned company, you can certify its Compliance Report provided you are not signing the Compliance Report as Company Secretary or as Director of the company also. 9. The responsibility of filing Cost Audit Report with the Central Government lies with the Cost Auditor. Whose responsibility is it to create XBRL document? Creation of the Cost Audit Report in XBRL format, as approved by the Board and certified by the Cost Auditor, is the responsibility of the company. However, filing the Cost Audit Report in XBRL format with the Central Government is the responsibility of the Cost Auditor, who has to ensure the correctness of data and other information contained in the XBRL Instance Document. 10. I have completed the Cost Audit and the Board of Directors has also approved the Cost Audit Report / Compliance Report. Is the Board of Directors of the company required to approve the Instance document of the Cost Audit Report / Compliance Report? No separate approval from the Board is required for the Instance document of the Cost Audit Report or of the Compliance Report since the data/information contained in the Instance document would already have been approved by the Board of Directors. However, if the data & other information as given in the Instance document differ from that approved by the Board, then it is advisable to get fresh approval of the revised Cost Audit Report or the Compliance Report unless the Board while according approval had authorized any officer of the company to make modifications as required in the XBRL document.

11. A company has not appointed anyone as the lead cost auditor. Is it required to appoint a lead cost auditor for consolidation? The company is not required to separately appoint a lead Cost Auditor. It may designate/nominate any one of the existing Cost Auditors as the lead Cost Auditor and assign the additional task of consolidation, who would be responsible for verifying the consolidated report and filing the same with the Central Government. 12. Is Performance Appraisal Report required to be filed with the Central Government as a part of the Cost Audit Report? As per provisions of the Companies (Cost Audit Report) Rules, 2011, every cost auditor, who submits a cost audit report, is also required to furnish Performance Appraisal Report to the Board/Audit Committee of the company in the prescribed format (Form III). However, this report will not be required to be filed with the Central Government. 13. My company is in the business of power generation. As per the MCA Circular, power companies are not required to file the Balance Sheet and Profit & Loss Account in XBRL format. Do I still need to file Cost Audit Report / Compliance Report (as applicable) in XBRL format? Power generation companies have been exempted from filing their Balance Sheet and Profit & Loss Account in XBRL format as the relevant taxonomy as per disclosure requirements under the Electricity Act, 2003 is still under development. However, under the said Act, there are no such separate disclosure requirements for cost details. Hence, the costing Taxonomy for filing the Cost Audit Report or the Compliance Report is common to all companies. Therefore, companies engaged in the business of power generation, transmission or distribution are also required to file Cost Audit Report / Compliance Report (as applicable) in the XBRL format. Written by S.Dhanapal, Senior Partner, S Dhanapal & Associates, A firm of Practising Company Secretaries, Chennai

ARTICLES 3: AVOIDING COMMON ERRORS OF XBRL IMPLEMENTATION:

Following three years of voluntary XBRL submissions, the SECs mandatory requirements for XBRL financial report submissions began phasing in June 15, 2009. As with any new process, companies can easily underestimate the challenges posed by this complex reporting technology and make mistakes along the way. This article describes common errors appearing in Voluntary Filing Program (VFP) Forms 10-K that continue to occur under the SECs mandatory Form 10-Q submissions and discusses how they can be prevented. CPAs can use this information to develop expectations about the challenges of XBRL document preparation and of performing agreed-upon procedures engagements. It is especially important for companies to be aware of these potential errors, because the errors occur not only in filings prepared in-house, but also in filings prepared by third-party financial printers. Regardless of who prepares the filings, the company is ultimately responsible for the documents accuracy. Despite the prevalence of these errors, significant improvements have been made in XBRL creation tools, the U.S. GAAP Taxonomy and in software validation tools.

In the future, we expect many companies to integrate XBRL and their automated accounting information systems (AIS) enabling the AIS to directly produce the XBRL instance documents and eliminating many types of errors. However, almost all companies currently prepare XBRL documents using a bolt-on process that follows the traditional preparation of financial statements in ASCII or HTML format. This manual data transformation process is a significant source of the errors we observed in XBRL documents. METHODOLOGY To gain better insight into the challenges new filers faced, we examined the filings of the first 22 U.S. companies that submitted relatively complete XBRL-formatted 10-K financial statements in 2006 as part of the SECs VFP. As part of a major research initiative undertaken at North Carolina State University examining issues related to XBRL financial statement documents, we examined the XBRL documents and compared each to the original Form 10-K. We noted differences in amounts, signs, presentation, labeling, classification, etc. To examine how accuracy improved with experience and with the intervening improvements in XBRL software and the XBRL U.S. GAAP Taxonomy, we repeated our examination in 2008 for the 11 companies that filed XBRL 10-K documents continually from 2006 to 2008. We base our discussion on these results and the preliminary observations of the SEC staff regarding errors identified in the submissions of XBRL 10-Q reports of the first registrants (approximately 500) required to file XBRL documents for the second and third quarters of 2009. (SEC observations are available here.) The XBRL 2006 and 2008 voluntary 10-K submissions of almost all companies examined contained significant errors that would not be acceptable under the SECs rules for mandatory submissions. These errors occurred in various steps of the process including mapping, extension, tagging, and creating and validating. Exhibit 1 identifies the types of errors that occurred. The SEC staff observations from a review of initial XBRL 10-Q submissions indicate that accuracy has improved significantly, but many companies are still making the same errors we observed in the voluntary submissions. Fortunately, companies that make a good-faith effort to comply with XBRL requirements and correct errors within 24 hours of discovery are protected from legal liability by the SECs safe harbor provision during the first two years of submissions. We identified these errors by comparing financial statements rendered by the SECs Interactive Financial Report Viewer software to the official Form 10-K and then tracing apparent errors to the underlying XBRL document containing the computer code. We defined errors as violations of basic XBRL principles in effect at the date of the document submission. At present, the SECs final rule and the EDGAR Filer Manual govern the content of XBRL data files, while the XBRL US GAAP Taxonomy Preparers Guide provides detailed instructions for the construction of instance documents containing the computerreadable code that represents a companys specific taxonomy of elements, business facts and financial relationships. We will use the four major steps involved in preparing XBRL documents to organize the discussion of the most common errors that were observed (see Exhibit 1).

MAPPING ERRORS Mapping is the process of identifying and matching every accounting concept and the related amount in a companys financial statements to the appropriate financial statement element in the XBRL U.S. GAAP Taxonomy. Companies made numerous mapping errors, which are among the most serious because they distort the meaning of the data that are downloaded into analytical software. Financial statement concepts that have been matched with incorrect XBRL elements may be impossible for users to detect without detailed comparisons of the XBRL elements to the original financial statements and notes. Examples. An accountant must choose from more than 50 Interest Income elements or more than 20 Cash and Cash Equivalents elements. The fineness of the GAAP taxonomy makes errors likely unless the accountant doing the mapping is very familiar with the companys financial reporting and with the taxonomy. Companies in the VFP often repeated mapping errors because the initial XBRL documents the company created were used as a template for future documents, leading to repetitive errors. Several forms of mapping errors continue to be observed under the SEC mandate. The SEC staffs observations refer to this matter as element selection. Filers have used standard elements in the taxonomy that are either too broad or too narrow to accurately correspond to the actual financial statement concept. For example, the filer selects the element Inventory, Finished Goods when a more narrow standard element, Energy Related Inventory, Petroleum, is available to more accurately capture the meaning of the underlying financial statement concept. A common and generally more serious mapping error is the creation of unnecessary, new elements that extend the U.S. GAAP Taxonomy. This occurs when a preparer fails to locate the correct element in the taxonomy and creates a new unique element for a financial statement concept. We also observed the unnecessary creation of new duplicate elements when a single concept appears in more than one location in the financial statements. For example, when preferred dividends appear in the statements of

income, cash flows and stockholders equity, the correct mapping for all three locations is to the standard element in the U.S. GAAP Taxonomy for Dividends, Preferred Stock, Cash. XBRL provides the coding to display a single element in multiple locations with differing labels when appropriate. The flexibility of creating unique elements is one of XBRLs strengths, and may appear harmless. However, analytical software recognizes only the standard elements in the U.S. GAAP Taxonomy so every unique element requires some level of manual interpretation by interactive users. In addition, companies are much more likely to make extension and tagging errors for unique elements because they must enter all of the information that is otherwise provided automatically for XBRL for standard elementsfor example, data type, period type, debit or credit balance, definition and label. The key is creating new elements through the extension process only when a financial statement concept is not included in the standard taxonomy. Companies may request that XBRL US add new elements to the official taxonomy through the public comment process followed for all new versions of the taxonomy. Solution. Although commercial software is available to assist with mapping, human judgment is essential. The taxonomy contains approximately 17,000 elements. Because of the high level of detail (fineness) of the taxonomy, a precise understanding of a companys accounting concepts and of the U.S. GAAP Taxonomy is required to ensure that the mapping is correct. The critical step for avoiding mapping errors is to train and assign experienced, knowledgeable accountants to perform and verify the mapping.

Mapping Tips
Use the following tips for mapping financial statement concepts to the XBRL U.S. GAAP Taxonomy: Examine the official element definitions carefully; however, the XBRL definitions themselves are not authoritative so exact correspondence between the financial statement concept and the XBRL definition is not required. Select the element with the narrowest definition that fits the concept. Use standard elements in the U.S. GAAP Taxonomy that correspond to the accounting concepts even if the elements are located within a different industry or within a different financial statement grouping in the taxonomy. Check for misspelled search terms or terms that do not correspond to the taxonomy because they may prevent mapping software from identifying the correct element in the taxonomy.

EXTENSION ERRORS
The extension process creates new XBRL elements in the taxonomy containing the essential information necessary to create a companys unique financial statements. This computer code is complex, and thus far, most companies have relied on third-party outsourcers that perform the extension process. The XBRL code allows a company to control or establish:

Unique presentation labels for elements. The location of elements within the financial statements including multiple locations. Mathematical relationships that allow the sum of amounts within a related group to be validated. For example, the amounts of the elements in the current asset group should sum to the amount entered for the current asset subtotal. Other information necessary to create the formal structure of a specific companys financial statements. For example, display labels such as Current Assets that are not attached to an element.

Extension errors often cause serious errors in financial statements, and they can distort the interpretation of XBRL data input into analytical software. We found numerous extension errors in the VFP submissions. These errors are much less common in the first Form 10-Q mandatory filings, but they remain an area of concern especially as companies begin the detailed XBRL coding of footnotes. Further, the roll-forward process used to create XBRL documents can allow these errors to persist year after year if they go undetected. Examples. Common extension errors made in the VFP include: Financial statement elements that are presented in incorrect order or are included in the wrong financial statement, for example, an income statement element is inserted into the balance sheet. Groups of elements that do not sum to their subtotal or total. Failure to create presentation labels for elements that replicate those in the original financial statements.

Solution. The extension process is inherently difficult because of the variety of financial statement formats and the complexity of the XBRL code controlling the description and presentation of the elements. First and foremost, the XBRL extension process should be performed by an individual with a high level of knowledge regarding the application of XBRL code and the software that is being used to generate the code. Accountants should use tools such as the SECs Previewer and validation software to verify that the extension documents meet the SECs technical requirements. However, validation software will not detect all errors. For example, a failure to establish mathematical relationships during the extension process will allow many types of errors to go undetected by validation software. Further, XBRL code cannot establish all relevant mathematical relationships for some tabular presentations so that validation software may not detect all data-entry errors even when accountants perform the extension process correctly. Although there is a strong preference for exact correspondence between the labels in the original Form 10-K and those in the XBRL documents, the SEC rules require only that the information content of the XBRL labels be the same as the original labels. Thus, companies have the option of using the default presentation labels in the U.S. GAAP Taxonomy. The use of default labels is an inferior practice because inconsistencies between the original financial statements and XBRL-rendered statements may confuse users. A more serious problem arises when the financial statement format requires negating labels such as less accumulated amortization, and the company uses the standard label that does not include the qualifier less. We recommend using the extension process to create presentation labels that exactly replicate those in the original financial statements. Finally, it is essential that a professional who has a deep understanding of accounting concepts carefully trace every element amount and description in the rendered financial statements from the XBRL code back to the original financial statements. TAGGING ERRORS Tagging is the process of entering both numerical and textual data for financial statement elements including dollar amounts, signs, time periods and units of measurement. Tagging errors are less common than mapping and extension errors, but they are serious because the erroneous data distort both the rendered financial statements and data downloaded into analytical software. Examples. Companies in the VFP made a variety of tagging errors, including straightforward data-entry errors, or more commonly, tagging elements with the incorrect time period, incorrect sign or incorrect rounding. Although accuracy has improved due to improved validation software and an improved negating sign feature in XBRL, incorrect signs remain a problem in the mandatory 10-Q submissions.

Sign errors generally occur for reasons other than a simple keystroke error. Correctly tagging signs is complex due to the distinction between debit and credit element values and the fact that a value may be either a positive or a negative depending on its location and description in the financial statements. XBRL principles require the assignment of positive signs to all elements having values consistent with their natural debit or credit balance, but some elements lack a natural balance, for example, the changes in working capital accounts presented in a statement of cash flows. Further, signs established when amounts are entered in the tagging process may require manipulation in the extension process in order to achieve correct presentation in the rendered financial statements. Solution. Accountants can detect keystroke errors with traditional methods such as double-entry validation procedures. They also may detect keystroke and other tagging errors with validation software if they use the extension process correctly to establish as many mathematical relationships as possible among financial statement elements. This allows validation software to check many amounts for mathematical accuracy. Of course, offsetting errors will not be detected, and some financial statement elements are not part of any total that can be tested. A careful tracing of original financial statement data to the rendered XBRL statements will detect many, but not all, tagging errors. Oversight by knowledgeable accountants with high levels of familiarity with the companys financial statement format, familiarity with the natural balance of elements and an understanding of the XBRL extension process is the most effective tool against errors. Elements that have no natural balance should be assigned a sign based on information provided in XBRL definitions of each element. When a financial statement label requires that an amount be presented with a sign that is inconsistent with the sign of the element, the negating sign feature of XBRL is applied in the extension process, causing the element to be presented with the opposite sign in the specified locations. For example, a financial concept such as a gain on sale is represented by a single XBRL element with a positive sign (natural credit balance), and the extension process is used to control its sign when the gain appears as a negative amount in the operating cash flow section of the statement of cash flows. CREATING AND VALIDATING THE XBRL INSTANCE DOCUMENTS The final steps in preparing XBRL interactive data for submission to the SEC are the creation and final validation of the XBRL instance documents containing all of the tagged financial statement elements and related presentation information. The final creation of the documents is a straightforward technical process. The failure to conduct adequate software validation and a manual validation allows many of the errors we observed in the VFP submissions to go undetected. Validation software automatically reviews and identifies most, but not all, violations of XBRL standards. It verifies mathematical accuracy when the extension process has established the mathematical relationships among the financial statement elements and their totals; however, as noted earlier, XBRL currently cannot specify all financial relationships in the statements. Preparers should conduct software validations with both their third-party software and with validation software that is available on the SECs Web site. After conducting the software validation, preparers should upload the instance documents to the SECs online system where preparers can privately preview the financial statements as rendered by the SECs Previewer software. We recommend that an experienced accountant conduct a detailed tracing of every element, its label and presentation from the rendered statements to the source document (10-K or other official financial report). The internal assurance process is iterative and should occur continually throughout the preparation of the instance documents. Errors tend to accumulate and trigger additional errors, so waiting until the instance documents are complete to begin validation will make the validation and correction process more difficult.

XBRL in the United States

The U.S. GAAP Taxonomy is a structured list of financial accounting concepts with the associated computer codes for use in XBRL documents. The SEC contracts with XBRL US Inc. to prepare and maintain the current taxonomy. XBRL US originated from an XBRL committee established by the AICPA in 1998. The organization is a member of XBRL International Inc., a consortium of more than 550 companies, organizations and government agencies.

The Attestation Process and XBRL

The SEC final rule does not require attestation of XBRL submissions, and it specifically states that auditors are not required to apply AU section 550, Other Information in Documents Containing Audited Financial Statements; AU section 722, Interim Financial Information; or AU section 711,Filings Under Federal Securities Statutes (AICPA, Professional Standards, vol. 1). The rule states that issuers can obtain third-party assurance voluntarily, if they choose. Anticipating CPA involvement, the AICPA issued SOP 09-1, Performing Agreed-Upon Procedures Engagements That Address the Completeness, Accuracy, or Consistency of XBRL-Tagged Data, in April 2009.

A Strong Process for Preparing XBRL Docs

A firm should take the following steps to create a strong process for the preparation of XBRL documents: Educate management that ownership of XBRL submissions belongs to the company, not the outsourcer. Educate management that this is an accounting and reporting process, not an IT process. Make clear assignment of responsibility, for example, to the controllers office, external reporting team, etc. Use consultants to assist with complex technical issues even if preparation is in-house rather than outsourced. Prepare a detailed plan that enables preparation to occur in lock step with the manual filing process. Establish and monitor controls over both internal and external processes. Provide adequate training to internal experts especially if preparation is inhouse. Start early and conduct a practice preparation before the first submission. Have more than one internal expert involved in the mapping and review processes and do not rely solely on software validation. Validate at all stages of the process to avoid compounding errors and test XBRL documents before submission using the SEC Previewer and validation software. Allow adequate time for final changes and reviews, especially if you expect last-minute changes in the manual documents before submission. Document the XBRL process and choices carefully, especially the basis for mapping accounting concepts to particular elements. Finally, be prepared for increased effort when the company begins submitting detailed coding of footnotes, which will more than double the number of financial statement concepts and corresponding XBRL elements.

EXECUTIVE SUMMARY
All public companies with filing periods ending on or after June 15, 2011, will be required to submit financial statement documents in XBRL format to the SEC as part of three phases, which started with large accelerated GAAP filers with fiscal periods ending on or after June 15, 2009. The move is expected to provide greater transparency and quicker dissemination of financial information.

Although attestation is not required, CPAs can expect to be involved in XBRL document preparation. Companies made a variety of errors in XBRL submissions during the SECs Voluntary Filing Program and in the initial mandatory Form 10-Q submissions in 2009, suggesting that the difficulty of complying with the SECs XBRL submission requirements has been underestimated. CPAs can expect the greatest challenges in the first year when coding the four basic financial statements in detail and in the second year when coding the financial statement notes in detail. This article describes the significant errors that have been most common, and it identifies the resources and strategies that CPAs can use to eliminate errors in XBRL submissions. Jon Bartley (jon_bartley@ncsu.edu) and Y.S. Al Chen (al_chen@ncsu.edu) are professors of accounting at North Carolina State University. Eileen Taylor (eileen_taylor@ncsu.edu) is an assistant professor at North Carolina State University. To comment on this article or to suggest an idea for another article, contact Alexandra DeFelice, senior editor, at 212-596-6122 or adefelice@aicpa.org.

AICPA RESOURCES
JofA articles Panelists Advise Companies to Take Responsibility for XBRL TaggingEven When Outsourcing, Nov. 19, 2009 XBRL Around the World, Oct. 08, page 62 Six Steps to XBRL, Feb. 08, page 34 ROI on XBRL, June 07, page 32

Use journalofaccountancy.com to find past articles. In the search box, click Open Advanced Search and then search by title. Webcast XBRLPreparing for Phase II and Detailed Tagging (taking place Jan. 27) Publications The Story of Our New Language, available for free download The Shifting Paradigm in Business Reporting and Assurance, an AICPA white paper, available for free download

Standard SOP 09-1, Performing Agreed-Upon Procedures Engagements That Address the Completeness, Accuracy, or Consistency of XBRL-Tagged Data Web sites Center for Audit Quality XBRL resources AICPA XBRL resources

ARTICLE 4: COMPULSORY FILING OF BALANCE SHEET AND PROFIT AND LOSS ACCOUNT IN XBRL:
General Circular No. 09/2011, Dated the 31.03.2011 Subject: Filing of Balance Sheet and Profit and Loss Account in eXtensible Business Reporting Language( XBRL) mode. It has been decided by the Ministry of Corporate Affairs to mandate certain class of companies to file balance sheets and profit and loss account for the year 2010-11 onwards by using XBRL taxonomy. The Financial Statements required to be filed in XBRL format would be based upon the Taxonomy on XBRL developed for the existing Schedule VI, as per the existing, (non converged) Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006. The said Taxonomy is being hosted on the website of the Ministry at www.mca.gov.in shortly. The Frequently Asked Questions ( FAQs ) about XBRL have been framed by the Ministry and they are being annexed as Annexure I with this circular for the information and easy understanding of the stakeholders. Coverage in Phase I 2. The following class of companies have to file the Financial Statements in XBRL Form only from the year 2010-2011 :(i) All companies listed in India and their subsidiaries, including overseas subsidiaries; (ii) All companies having a paid up capital of Rs. 5 Crore and above or a Turnover of Rs. 100 crore or above . Additional Fee Exemption 3. All companies falling in Phase -I are permitted to file upto 30-09-2011 without any additional filing fee. Training Requirement 4. Stakeholders desirous to have training on the XBRL or on taxonomy related issues, may

contact the persons as mentioned in Annexure II. (J.N. Tikku) Joint Director Tel: 011-23381295

Corrigendum to Circular no. 09/2011 dated 31.03.2011 related to Filing of Balance Sheet and Profit and Loss Account in XBRL mode
Annexure I Frequently Asked Questions 1. What is XBRL? XBRL is a language for the electronic communication of business and financial data which is revolutionizing business reporting around the world. It provides major benefits in the preparation, analysis and communication of business information. It offers cost savings, greater efficiency and improved accuracy and reliability to all those involved in supplying or using financial data. XBRL stands for

eXtensible Business Reporting Language. It is already being put to practical use in a number of countries and implementations of XBRL are growing rapidly around the world. 2. Who developed XBRL? XBRL is an open, royalty-free software specification developed through a process of collaboration between accountants and technologists from all over the world. Together, they formed XBRL International which is now made up of over 650 members, which includes global companies, accounting, technology, government and financial services bodies. XBRL is and will remain an open specification based on XML that is being incorporated into many accounting and analytical software tools and applications. 3. What are the advantages of XBRL? XBRL offers major benefits at all stages of business reporting and analysis. The benefits are seen in automation, cost saving, faster, more reliable and more accurate handling of data, improved analysis and in better quality of information and decisionmaking. XBRL enables producers and consumers of financial data to switch resources away from costly manual processes, typically involving time-consuming comparison, assembly and re-entry of data. They are able to concentrate effort on analysis, aided by software which can validate and process XBRL information. XBRL is a flexible language, which is intended to support all current aspects of reporting in different countries and industries. Its extensible nature means that it can be adjusted to meet particular business requirements, even at the individual organization level. 4. Who can benefit from using XBRL? All types of organizations can use XBRL to save costs and improve efficiency in handling business and financial information. Because XBRL is extensible and flexible, it can be adapted to a wide variety of different requirements. All participants in the financial information supply chain can benefit, whether they are preparers, transmitters or users of business data. 5. What is the future of XBRL? XBRL is set to become the standard way of recording, storing and transmitting business financial information. It is capable of use throughout the world, whatever the language of the country concerned, for a wide variety of business purposes. It will deliver major cost savings and gains in efficiency, improving processes in companies, governments and other organisations. 6. Does XBRL benefit the comparability of financial statements? XBRL benefits comparability by helping to identify data which is genuinely alike and distinguishing information which is not comparable. Computers can process this information and populate both pre defined and customised reports. 7. Does XBRL cause a change in accounting standards? No. XBRL is simply a language for information. It must accurately reflect data reported under different standards it does not change them. 8. What are the benefits to a company from putting its financial statements into XBRL? XBRL increases the usability of financial statement information. The need to re-key financial data for analytical and other purposes can be eliminated. By presenting its statements in XBRL, a company can benefit investors and other stakeholders and enhance its profile. It will also meet the requirements of

regulators, lenders and others consumers of financial information, who are increasingly demanding reporting in XBRL. This will improve business relations and lead to a range of benefits. With full adoption of XBRL, companies can automate data collection. For example, data from different company divisions with different accounting systems can be assembled quickly, cheaply and efficiently. Once data is gathered in XBRL, different types of reports using varying subsets of the data can be produced with minimum effort. A company finance division, for example, could quickly and reliably generate internal management reports, financial statements for publication, tax and other regulatory filings, as well as credit reports for lenders. Not only can data handling be automated, removing timeconsuming, error-prone processes, but the data can be checked by software for accuracy. 9. How does XBRL work? XBRL makes the data readable, with the help of two documents Taxonomy and instance document. Taxonomy defines the elements and their relationships based on the regulatory requirements. Using the taxonomy prescribed by the regulators, companies need to map their reports, and generate a valid XBRL instance document. The process of mapping means matching the concepts as reported by the company to the corresponding element in the taxonomy. In addition to assigning XBRL tag from taxonomy, information like unit of measurement, period of data, scale of reporting etc., needs to be included in the instance document. 10. How do companies create statements in XBRL? There are a number of ways to create financial statements in XBRL: XBRL-aware accounting software products are becoming available which will support the export of data in XBRL form. These tools allow users to map charts of accounts and other structures to XBRL tags. Statements can be mapped into XBRL using XBRL software tools designed for this purpose Data from accounting databases can be extracted in XBRL format. the data to XBRL. Applications can transform data in particular formats into XBRL. The route which an individual company may take will depend on its requirements and the accounting software and systems it currently uses, among other factors. 11. Is India a member of XBRL International? India is now an established jurisdiction of XBRL International. A separate company, under section 25 has been created, to manage the operations of XBRL India. The main objectives of XBRL India are To create awareness about XBRL in India To develop and maintain Indian Taxonomies To help companies, adopt and implement XBRL. For more information, visit www.xbrl.org/in 12. Which taxonomies developed for Indian reporting requirements? Where can I find the taxonomies? It is not strictly necessary

for an accounting software vendor to use XBRL; third party products can achieve the transformation of

Taxonomies for Indian companies are developed based on the requirements of Schedule VI of Companies Act, Accounting Standards, issued by ICAI SEBI Listing requirements. Taxonomies for Manufacturing and service sector (referred as Commercial and Industrial, or C&I) and Banking sector, is acknowledged by XBRL International. These taxonomies are available at http://www.xbrl.org/in/ 13. Where can I find more information about XBRL? Please visit www.xbrl.org . Also Ministry of Corporate Affairs would be shortly developing its webpage on XBRL with list of contact persons for training purposes. 14. What are XBRL Documents? An XBRL document comprises the taxonomy and the instance document. Taxonomy contains description and classification of business & financial terms, while the instance document is made up of the actual facts and figures. Taxonomy and Instance document together make up the XBRL documents. 15. What is Taxonomy? Taxonomy can be referred as an electronic dictionary of the reporting concepts. Taxonomy consists of all the data definitions, the basic XBRL properties and the interrelationships amongst the concepts. It includes terms such as net income, EPS, cash, etc. Each term has specific attributes that help define it, including label and definition and potentially references. Taxonomies may represent hundreds or even thousands of individual business reporting concepts, mathematical and definitional relationships among them, along with text labels in multiple languages, references to authoritative literature, and information about how to display each concept to a user. 16. What is meant by extending taxonomy? Taxonomy is extended to accommodate items/relationship specific to the owner of the information. Taxonomy extension therefore can be a) Modification in the existing relationships b) Addition of new elements in the taxonomy c) Combination both a & b 17. Are Taxonomies based on any standards? Yes, taxonomies are based on the regulatory requirements and standards which are to be followed by the companies. Accordingly, depending on the requirements of every country, there can be countryspecific taxonomies. 18. What is an Instance document? An XBRL instance document is a business report in an electronic format created according to the rules of XBRL. It contains facts that are defined by the elements in the taxonomy it refers to, together with their values and an explanation of the context in which they are placed. XBRL Instances contain the reported

data with their values and contexts. Instance document must be linked to at least one taxonomy, which defines the contexts, labels or references. Thus, in order to concluded the usage and explain the XBRL technology which leads to more information exchanges that can be effectively automated by use. This one standard approach leads to the best interest of the company or more so for the international business interests globally that warrant the accuracy of all the financial data for the end users and early collaborative decisions by the companies or those whose interest is involved for acquisition/ rights etc. Annexure II (i) Smt. Nirupama Kotru, Director Ministry of Corporate affairs 5 Floor, A Wing, Shastri Bhavan, Dr.R.P. Road, New Delhi Contact No. 011-23384470 Email: nirupama.kotru@mca.gov.in
th

(ii) Dr. Avinash Chandra, Technical Director The Institute of Chartered Accountants of India, ICAI Bhawan, Post Box No. 7100, Indraprastha Marg, New Delhi-110002. Contact No. 011-3011456, 30110427 Email: avinash@icai.org

(iii) Shri Pankaj Srivastava, Joint Director Ministry of Corporate affairs 5 Floor, A Wing, Shastri Bhavan, Dr.R.P. Road, New Delhi Contact No. 011-23384657 Email : pankaj.srivastava@nic.in iss.pankaj@gmail.com
th

(iv) Dr. Surinder Pal,

Secretary, Committee on Members in Industry (CMII), The Institute of Chartered Accountants of India, ICAI Bhawan, Indraprastha Marg, New Delhi-110002. Contact No. 011-30110450

(v) Mr. N.K. Bansal, Secretary, Continuing Professional Education (CPE), The Institute of Chartered Accountants of India, ICAI Bhawan, Indraprastha Marg, New Delhi-110002. Contact No. 0120-304595

iling financial statements in XBRL: How-to, lessons learned, and best practices
Mandatory compliance for XBRL-based reporting is fast approaching
David Newman (dnewman0@us.ibm.com), Software Engineer, IBM Dean Ritz (xbrl@deanritz.com), Independent Consultant Murali Vridhachalam (mural@us.ibm.com), IT Architect, IBM Summary: In the past few years, eXtensible Business Reporting Language (XBRL) has emerged to meet increased regulatory and transparency requirements for financial reporting. The global connectivity of the Internet has encouraged the rapid development of XBRL standards. Effective December 15, 2008, the US Securities and Exchange Commission (SEC) will require companies with more than $5 billion in market capitalization to file their financial statements in XBRL. Over the following two years, all publicly traded companies in the US will be required to file using XBRL. In this article, learn the fundamentals of XBRL, the steps in the filing process, and lessons from an actual filing with the SEC. Date: 18 Nov 2008 Level: Introductory PDF: A4 and Letter (504KB | 13 pages)Get Adobe Reader Activity: 15763 views Comments: 1 (View | Add comment - Sign in)

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Show articles and other content related to my search: FINANICAL STATEMENT PREPARED USING XBRL

Introduction
Did you know?
IBM was one of the first companies to file its financial statements using XBRL as part of the SEC Voluntary Filing Program. The authors worked with multiple filings of IBM financial statements.

XBRL provides an XML-based data format that enables electronic communication of business and financial information. With XBRL, every piece of information is tagged using standardized vocabulary defined in an XBRL taxonomy. For example, net revenue would have its own unique XBRL element. XBRL International is a nonprofit organization that maintains the XBRL standard. More than 500 companies and government agencies are members, and the organization operates with more than 20 XBRL jurisdictions around the world. There are major government-sponsored XBRL initiatives in the US, Australia, Netherlands, India and many other countries. In this article, learn about XBRL terminology and the steps for preparing an XBRL filing. From their experience, the authors include both general and specific lessons learned, and best practices, for creating XBRL format filings. Back to top

Differences between XML and XBRL

If you're familiar with XML, you might wonder what XBRL has that XML does not have. While it is true that XBRL is built on XML, and that all XBRL documents must also be XML valid, there are major differences between the two. The most important conceptual distinction is that XBRL provides a way to express and validate semantics. For example, Assets = Equity + Liabilitiescan be expressed using XBRL but not using native XML. XBRL accommodates change better than XML. For example, XBRL separates the schema from the data. XBRL instance (data) documents are simple, containing normalized data immune to their sequence, and without hierarchy. Users can make changes to the XBRL taxonomy, such as changing parent-child relationships or adding new children, without having to reformat instance documents. Similarly, data in the instance document may be reordered without having an impact on the taxonomy. Normalized data also simplifies database storage. Another unique feature of XBRL is its native support of multidimensional modeling, which is very similar to Microsoft Excel pivot tables. Consider the situation where you want a metadata model to support segmentation of product sales by country and also by product line. Assuming a simple example of product sales by three countries (US, Canada, and Mexico) and two product lines (software and hardware), a pure element-based approach would result in 12 elements: sales_US_software sales_US_hardware sales_US_allProducts sales_Canada_software sales_Canada_hardware sales_Canada_allProducts sales_Mexico_software sales_Mexico_hardware sales_Mexico_allProducts sales_allCountries_software sales_allCountries_hardware sales_allCountries_allProducts Adding another product to the product line adds another four elements. Add another line item, such as cost of goods sold, and that one additional line item would result in another twelve elements. Such an approach quickly gets out of control, and is extremely frustrating to model and manage. Using XBRL dimensions, there would be the single element of sales, along with the two dimensions of country and product line, as shown in Figure 1. The country dimensions would have children for US, Canada, and Mexico; the product line dimensions would have children for software and hardware.

Figure 1. Country and product line dimensions easily reused for line items

The modularity greatly simplifies building the metadata model; the dimensions of country and product line can be reused for other elements, such as cost of goods sold, gross revenue, net revenue, and so on. It also showcases the semantic relationships between the values reported and their segmentation. For the adventurous, XBRL dimensions also support some set operations. The US-GAAP taxonomy (UGT), IFRS, COREP, and FINREP taxonomies make extensive use of dimensions. The last noteworthy distinction of XBRL is validation. While XML validation is limited to syntax, XBRL validation confirms semantic relationships between elements (as defined in the XBRL taxonomy). For example, an XBRL validation engine confirms that the value reported for assets does, in fact, equal the sum of the values reported for equity and liabilities. XBRL Formulas, a recent addition to the XBRL standard, provides a portable notation for the validation of other, more complex relationships between elements. For example, the FDIC uses XBRL formulas to capture the expertise of its auditors so that reviews can be performed in seconds rather than hours. The nonprofit Microfinance Exchange uses XBRL validation and formulas to examine the financial reports of thousands of microfinance organizations around the world. Using XBRL, analyst work at Microfinance Exchange that once took hours is now performed in seconds. Back to top

XBRL terminology
Key XBRL terms are: Concept Describes a discrete piece of business information. For example, "Assets, Total" label, documentation, or reference. A concept that defines a business fact, such as "Assets, Total," in XBRL is sometimes called an elementa term inherited from XML. Tuple

A special kind of data type because it binds together a set of concepts, like a row in a relational database where fields in a single row are related. It used to be common usage to associate concepts through tuples. For example, annual reports require the disclosure of stock holdings of company officers. A tuple would be used to associate each officer's name with age, shares owned, and options held. The individual facts are meaningless without this association; you would not know which age went with which officer! Tuples may also contain other tuples. Dimensions XBRL dimensions have now taken the place of tuples for associating concepts. Tuples are no longer permitted in the UGT or in a company's filing taxonomy for two reasons: Tuples insert schema information into the instance document. Consequently, changes to tuple definitions in the taxonomy can "break" the instance document. Nested tuples are extremely awkward to modify, both in the taxonomy and in the instance document. Dimensions do not have these faults, and they provide flexibility in data modeling that tuples don't offer. Name The name of a concept uniquely identifies it in its namespace. A concept also has an ID formed by the concatenation of the namespace prefix with the concept name. For example, an element named Assets in the UGT taxonomy with the prefix us-gaap has the name usgaap_Assets. This provides for unique identification of an element within a large, networked taxonomy (such as UGT). Relation A connection between two concepts, accomplished using the xlink standard. The relation is always from one concept to another. It is directional, based on xlink, with "from" and "to" as the endpoints. The name of the relation is its role. A concept may participate in many relations, such as a concept having multiple labels by language. For example, first you would identify one endpoint of the relation. In this case, it is the concept for a value to be reported.
<loc xlink:type="locator"; xlink:label="IBM_NetAssets"; xlink:href="ibm.xsd#IBM_NetAssets" />

Next, define the labels in different languages. These are other endpoints of the relation.
<label xlink:type="resource" xlink:label="IBM_NetAssets_lbl" xml:lang="en-US" xlink:role="http://www.xbrl.org/2003/role/label" >Net Assets</label> <label xlink:type="resource" xlink:label="IBM_ActivoNeto_lbl" xml:lang="es" xlink:role="http://www.xbrl.org/2003/role/label">Activo Neto</label>

Establish the relations by creating arcs between the concepts and the two labels.
<labelArc xlink:type="arc" xlink:arcrole="http://www.xbrl.org/2003/arcrole/concept-label" xlink:from="IBM_NetAssets" xlink:to="IBM_NetAssets_lbl" /> <labelArc xlink:type="arc" xlink:arcrole="http://www.xbrl.org/2003/arcrole/concept-label" xlink:from="IBM_NetAssets" xlink:to="IBM_ActivoNeto_lbl" />

Extended link A collection of concepts organized for a specific purpose. It contains a network of relations between concepts, such as: Assets, Total = Assets, Current + Assets, Noncurrent There are two purposes for extended links: They make something big into something smaller and more modular. They isolate relations that might otherwise conflict. For example, there are two ways to calculate Trade Receivables, Net:

Trade Receivables, Gross - Allowance for Bad Debt ------------------------------= Trade Receivables, Net

Trade receivables, Net, Current + Trade receivables, Net, Noncurrent ----------------------------------------= Trade Receivables, Net

To capture both relations (because you want your taxonomy to be as comprehensive as possible), use extended links to isolate them from each other. Presentation relation Provides for a hierarchical organization of elements. The relations are from the parent to the child. These relations are stored in a presentation linkbase. Calculation relation Provides for summation organization of elements. These relations are stored in a calculation linkbase. Label A human-readable label for an element. Business users see labels. Taxonomy authors (taxonomists) see concept names. Labels have attributes for language and purpose. A label is assigned to a particular element through a relation established between the label and the element. These relations are stored in a label linkbase. Figure 2 shows an example.

Figure 2. The label arc links a label to an XBRL concept

Documentation Describes the meaning of an element in human-readable terms. Consider it a special type of labela label whose role is for documentation. Documentation should be clear enough for a business user. However, documentation is not authoritative and is not meant to offer an official or exhaustive definition. Instead, references are intended to provide authoritative documentation. Documentation relations are stored in a documentation linkbase. Reference Provides a pointer to authoritative literature for an element. For example, the authoritative references for UGT concepts point to SEC and Financial Accounting Standards Board (FASB) rules. These relations are stored in a reference linkbase. Taxonomy A collection of elements, relations, labels, references, documentation, and references to other taxonomies. It is like a dictionary or classification system. Discoverable taxonomy set (DTS) is used to define the complete network of all referenced taxonomies and their respective file-based components. Back to top

Preparing an XBRL filing

The XBRL filing process has a single, clear goal: To transform an implicitly structured financial report into a structured financial report. Preparing a filing involves making associations between pieces of the stated and implicit data (usually in a spreadsheet or word processing document) and an explicit informational structure described in XBRL. The UGT provides a starting point. The company filing taxonomy (CFT) extends the UGT to meet company-specific reporting needs (new elements, new labels for existing elements, changes in the schema, and so on). For example, the CFT can override the standard UGT label of "Assets, Total" to match what the company uses on its reports, such as "Total Assets." An XBRL filing is composed of two logical components: an XBRL taxonomy, which describes the metadata of the filing company's financial report (built on the UGT), and the XBRL instance document that references the taxonomy. Figure 3. Two logical components of a filing

The ancillary pieces created during the XBRL filing process are various kinds of project documentation. The documentation is important to both the technical team creating the technical documents, and to the financial reporting specialist concerned with securing auditable information about the creation of a specific filing. Figure 4 shows a broad overview of the process.

Figure 4. Large-grain view

The map step documents the associations between your financial report and the UGT, including changes and additions. Consider this a description of the perfect filing. The task then becomes implementing the map. The model step implements your company filing taxonomy. Tagging is the physical process of linking your financial facts to your company taxonomy. During packaging, you create your filing package, complete your filing checklist, review the report with the client, and deliver it to the SEC or your financial printer. Figure 5 shows the iterative nature of the entire filing process. It also shows an optional step where a company may use IBM DB2 9 to store its XBRL-formatted financial reports, as well as reports from other companies downloaded from the SEC site to allow for comparisons and faster analysis of financials of various companies.

Figure 5. Detailed four-step process for filing

For the Q1 FY2008 filing by IBM, an XBRL descriptive table (XDT) was created to capture the mapping information. The XDT was based on the "neutral format table" work of Charles Hoffman, the acknowledged father of XBRL (see Resources). The neutral format table captures mapping information without regard to implementation technology. The XDT adds information necessary for XBRL implementation. The XDT is modeled in a spreadsheet. It captures the information needed both for the taxonomy and also for the instance document. Figure 6 shows an example. (See a larger version of Figure 6.)

Figure 6. XBRL descriptive table

The XDT is captured in an Excel spreadsheet. For the Q1 FY2008 filing, UBmatrix Report Builder was used to tag the data in the XDT spreadsheet to the CFT. Other tools to tag data include Dragon Tag by Rivet Software and Snappy Reports. A tagged cell is shown in Figure 7. Figure 7. Tagging a cell with an XBRL concept

The XDT is organized by statements (for example, balance sheet, income statement). For each statement the XDT records the values to be reported, their labels, the name of each XBRL element, the reporting period, the decimal position for numeric values, and other information. As noted previously, this information documents the requirements for the CFT, which you subsequently implement in the modeling step. Creating the CFT can be simple or complex, depending on the complexity of the information reported. It is relatively easy to model in XBRL the three standard financial statements associated with a 10Q (quarterly statement of financial position, statement of income, and statement of cash flow). A 10K (Annual Report) is much more complex because it includes the statement of shareholders' equity, which requires dimensional modeling. Modeling is performed in a taxonomy authoring tool, and there are now several of them on the market. For the IBM filings, UBmatrix Taxonomy Designer was used. Fujitsu XWand is another option. (See a larger version of Figure 8.) Figure 8. IBM Q1FY08 Taxonomy in UBMatrix Taxonomy Designer

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Lessons learned from creating XBRL format filings for the SEC
For compliant and correct XBRL filings at the SEC, you should focus on acceptance criteria, lessons learned from experience, and best practices. The acceptance criteria, as defined by the SEC, are in the deceptively small document "Public Validation Criteria" (see Resources). XBRL.US provides a "Preparers Guide" (see Resources) that offers ideas for a workflow in creating a filing and some best practices. However, experience demonstrates that experience is the best teacher! The authors have collective experience creating multiple filings for IBM and other large companies using three different versions of the UGT (2005, 2008 beta2, and release 1.0). This section outlines some of their lessons and best practices (all directed to creating SEC filings). Table 1. General lessons learned and best practices

Lesson

Best practice

If you've ever tried to learn the folk guitar, you know you can play pretty quickly, even if badly. Creating an XBRL taxonomy is quite similar. It's easy to create a taxonomy, particularly a bad one. "Bad" means it fails to apply the architecture rules of the UGT, selects the wrong UGT concept for a financial figure, fails to accurately represent your company's financial reporting model, renders statements that do not match your other data formats, and so on.

Have at least two people on the team, one an expert in XBRL and another in the financial reporting practices of the specific company. Ideally, each expert should know something about the other's area of expertise.

It takes longer than you think. Even with the help of someone experienced in this process, and with a good process to follow, the preparation of a 10Q will take from 32 to 40 hours (not including training time).

Establish a reliable internal process. A reliable process is especially important because the SEC will soon require concurrent delivery in all data formats. Imagine the fallout for your company if it delays the release of its quarterly figures by a week or two because the XBRL filing is taking longer than anticipated. You should never have to start from scratch except on your first attempt. Make that first attempt while you still have time to make and learn from mistakes (before the end of 2008).

This is not a linear task. Each step involves iterations of testing and revision. The iterative process should be done for each financial statement. You might think you're near the end of the project only to discover (surprise!) that you've picked an incorrect UGT concept for a financial figure.

Plan for iterative development and lots of reviews.

Your filing is not perfect. Currently, there are many opportunities for human error, including the humandependent steps in examining the quality of your taxonomy and instance documents. The service industry arising from the SEC mandate is slowly recognizing the challenges in detailed tagging of every piece of data in a financial report. There are technical issues and process issues. But, most critically from the perspective of a CFO, who carries personal liability for the accuracy of the data, there are accountability challenges. For example, how do you know you've made the right mapping of figures to XBRL concepts? How do you know that you have complied with UGT architecture guidelines? How do you know that cross-reporting-period relationships are correctly reported? At this time, nearly every company filing XBRL reports is using eyeballs to ensure accuracy. As the number of reported facts climbs into the hundreds, and the complexity of the data model grows, human verification of data accuracy will clearly be an unacceptable method.

Plan for perfection by understanding your requirements. Then push on the XBRL services industry, tools vendors, and UGT steering committee to create the tools and XBRL formulas that you need to support the universal requirement for demonstrably correct filings.

Table 2. Taxonomy lessons learned and best practices

Lesson

Best practice

The first attempts to create our CFT involved modifying the UGT. XBRL provides a clean mechanism for extending other taxonomies, so the technology is well-suited for SEC filings. Every filing company begins with the UGT, then customizes it (customization is nondestructive to the UGT). Yet some customization was so extreme, it was more efficient to create a new network of relations rather than customize an existing taxonomy.

Create company-specific extended links for each statement unless the UGT provides one that's a near-perfect match. Think of the company-specific extended link as a definitive statement. Rather than seeing how the company deviates from the UGT (GAAP is Generally Accepted Accounting Principles), simply ensure your company-specific extended links make a clear statement (pun intended). Once you've completed your company-specific extended links, the next best practice is to remove the references to the UGT equivalents. They are no longer needed. Use the presentation relations to secure the best data model, while sacrificing the data display. In the near term, particularly with the 10Q, making this sacrifice is not likely to present problems.

It was a challenge to create presentation relations that represented the correct data model relationships between concepts, and that would also support a desired rendering (sequence and indentation) based on the presentation's parent-to-child relations. This is an overloading of the presentation relations. They cannot serve two masters.

The UGT is big. Comprising than 150 taxonomies, more than 550 files, and over 12,000 concepts, it is over 55MB in size. In the early work, a UGT entry point was used that pulled in nearly everything. The team thought that was smart, but turned out to be wrong. Performance became a problem (especially as the files are loaded over the Internet), and they had to sift through networks of relations that they did not even need.

Identify the exact statements and disclosures you need for reporting, then reference those taxonomies (a subset of the 100) in your CFT. 1. Start with your actual financial reports (perhaps with old numbers, but the line items likely will stay the same). Organize them into statements, disclosures, and non-GAAP reports. Load into a taxonomy authoring tool (Taxonomy Designer, XWand) or the SEC Viewer. Wade through the extended links that are likely a good match for your statements and disclosures. It can be helpful to search by a label or part of a label to find the relevant network. Consider looking for other concepts from your same financial statement, as these should be found in the same network. Once you've found the network, note its URL. Unfortunately, the URL is not to be found with the network. You must do a little digging using the Web browser; point to http://xbrl.us/us-gaap/1.0. Statements are in the stm directory, disclosures in the dis directory, and industry-specific entry points are in the ind directory. The specific files are named by a pseudo-acronym. Thus, if you are seeking the "statement of financial position" for the commercial and industrial industry, the appropriate taxonomy is named us-gaap-stm-ci-sfpcls-2008-03-31.xsd (cls stands for classified). The valid URL is what you need to reference: http://www.xbrl.us/us-gaap/1.0/stm/us-gaap-stm-ci-sfpcls-2008-03-31.xsd

2.

3.

4.

Tools will get better. But for now, this is our recommendation for how to identify the exact statements and disclosures you will need for reporting.

Table 3. Instance document lessons learned and best practices

Lesson Best practice

Financial reports often have figures in millions (for example, from the cash flow statement), others as whole numbers (such as shares outstanding), and some with two decimals places (earnings per share).

For handling the millions, report these values as whole numbers and indicate that they've been rounded to the nearest million. If your financial report provides, for example, a net revenue of $26,311 in millions for Q4 of 2007 (IBM is a big company), the value in the instance document would be reported as 26311000000 with a decimal attribute of -6 (which is substantially different from reporting it with decimal attribute of 0).

Instance documents also contain other details, including definitions for the numeric unit, context, and footnotes. Complex filings may have a hundred or more of these details.

Establish a naming convention so you'll know how to quickly distinguish one context from another. For units, we recommend U-[unit]_[decimal]. For negative decimal values, a minus sign (-) or dash (--) replaces the underscore (_).

Unit attributes

Unit name

Monetary in US dollars, rounded to the nearest million

U_USD-6

Monetary in US dollars, rounded to the nearest penny

U_USD_2

Shares of stock, in whole number increments

U_Shares_0

For nondimensional contexts, [period type]-[relative fiscal year]-[quarter+number, or annual] is recommended. Period type is either I for instant or D for duration. Relative fiscal year is C for current year, P for prior year, PP for prior-prior year, N is for next fiscal year (needed for some disclosures), and year-to-date reporting period is YTD. Assuming the reporting period is a third-quarter report as of 9-30-2008:

Reporting period attributes

Context name

Instant period type, current reporting year

I-CY-Q3

Duration period type, current reporting period, Q2

D-CY-Q2

Instant period type, prior year, Q3

I-PY-Q3

Duration period type, current year-to-date, Q1 through Q3. Note: Because it is year-to-date, it is assumed to be Q1 through the current quarter.
Assuming the reporting period is for a fiscal year ending 12-31-2008:

D-CYTD

Reporting period attributes

Context name

Instant period type, current reporting year

I-CY-Y

Duration period type, current reporting period, Q4

D-CY-Q4

Instant period type, prior year, year

I-PY-Y

Dimensional contexts are more complex to name because of their length. Include the domain name in full, then an acronym representing the domain member. For example, an annual report disclosure about business combinations has the name "Business Segment [Domain]" and a member "Global Systems Technology [Member]." If the duration reporting period is current fiscal year, year, combined with the domain and member information noted above, the dimensional context would appear as: D-CY-Y_BusinessSegment-GST.

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Acknowledgments
Thanks to Bill Hoffay at IBM, who was and remains an integral part of producing these filings. And, thanks to Charles Hoffman and Timothy Randle for sharing their design experience and insights on preparing SEC quarterly filings. Back to top

Summary
Use of XBRL is growing worldwide, largely because of its powerful capabilities. An equally compelling reason for XBRL's growth is its adoption by regulatory agencies and the SEC mandate that all filings be in XBRL format within the next two years. XBRL will certainly disrupt many current methods of financial reporting. There is already significant XBRL activity in the service companies and organizations that support filings to the SEC, including the accounting industry, financial printers, and financial reporting departments of the largest companies. In this article, you learned from the authors' experiences about the opportunities in this challenging area

ARTICLE 5: HOW TO FILE FINANCIAL STATEMENT

The following class of companies have to file the Financial Statements in XBRL Form only from the year 2010-2011 as mandated by Ministry of Corporate Affairs vide its GENERAL CIRCULAR 37/2011, DATED 7-6-2011 i) All companies listed in India and their Indian subsidiaries; ii) iii) All companies having a paid up capital of Rs.5 crore and above All companies having a turnover of Rs.100 crore and above.

However banking companies, insurance companies, power companies and Non Banking Financial Companies (NBFCs) are exempted for XBRL filing, till further orders. Now the question which arises is how to file Financial Statements in XBRL Form? In respect of this MCA has issued a step by step guide, which is as follows:Steps for filing financial statements in XBRL form in MCA21 system Step 1 Creation of XBRL instance document:

A. Map companys each financial statement element to a corresponding element in published taxonomy Companies have the option to create their own XBRL documents in house or to engage a third party to convert their financial statements into XBRL form. The first step in creation of an instance document is to do tagging of the XBRL taxonomy elements with the various accounting heads in the books of accounts of the company. This would create the mapping of the taxonomy elements with the accounting heads so that the accounting information can be converted into XBRL form. Mapping is the process of comparing the concepts in the financial statements to the elements in the published taxonomy, assigning a taxonomy element to each financial statement concept. Selecting the appropriate elements for some financial statement elements may require a significant amount of judgment. For that reason those in the company who are most familiar with the financial

statements should be involved in matching financial statements concepts to taxonomy elements. The mapping should be reviewed before proceeding further as the complete reporting would be dependant on the mapping. B. Create instance document for Balance sheet and Profit and loss AccountOnce the tagging of financial statement elements with the published taxonomy elements is done, the next step is to create the instance document. An instance document is a XML file that contains business reporting information and represents a collection of financial facts and report-specific information using tags from the XBRL taxonomy. It is to be noted that no extensions to the core Taxonomy will be allowed. Separate instance documents need to be created for the following: (i) (ii) (iii) Stand Alone Balance sheet of the company Stand Alone Profit and Loss Account of the company Consolidated Balance sheet of the company$(iv) Consolidated Profit and Loss Account of the

company$ The instance document should contain the financial information for both the current as well as the previous financial year. $Consolidated balance sheet and Profit and Loss instance documents to be created only in case the same is applicable to the company. The following are the specifications to be followed while preparing the instance document o o An XBRL instance document must be schema valid according to all schemas in the DTS The scheme element in the context must be http://www.mca.gov.in/CIN

The value of identity element in the context must all be x-equal and must be the CIN of the company. o o o o o o Context must not have segment or scenario element present An instance must not contain duplicate xbrli:context elements. Every xbrli:context element must appear in at least one contextRef attribute in the same instance. An instance must not have more than one fact having the same element name and equal contextRef attributes All monetary facts must have the same unitRef attribute. The facts corresponding to a single concept must not have contextRef attributes pointing to contexts with overlapping time period. In case of periodType=instant, it means to have same date, and in case of periodType=duration, it means to have a duration that overlap. For example: The following contexts have overlapping duration, this would not be allowed. <xbrli:context <xbrli:entity> <xbrli:identifier </xbrli:entity> <xbrli:period> <xbrli:startDate>2009-04-01</xbrli:startDate> <xbrli:endDate>2010-03-31</xbrli:endDate> scheme=http://www.mca.gov.in/CIN>L24223MH1946PLC005434</xbrli:identifier> id=D2010>

</xbrli:period> </xbrli:context> <xbrli:context <xbrli:entity> <xbrli:identifier </xbrli:entity> <xbrli:period> <xbrli:startDate>2009-08-01</xbrli:startDate> <xbrli:endDate>2010-07-31</xbrli:endDate> </xbrli:period> </xbrli:context> o o o o o o A link:footnoteLink element must have no children other than link:loc, link:footnote, and link:footnoteArc. A link:footnoteLink link:loc xlink:href attribute must start with the sharp sign #. Every nonempty link:footnote element must be linked to at least one fact Non significant digits for values for numeric facts MUST be equal to 0. An instance document must not contain unused units If the unescaped content of a fact with base type nonnum:escapedItemType contains the < character followed by a QName and whitespace, /> or >, then the un-escaped content must contain only a sequence of text and XML nodes. <eg:AcidityTextBlock> pH&lt;1.0 </eg:AcidityTextBlock> o o o o o o o o o o The value of a fact must be in plain text. HTML/RTF are not allowed A fact is defined to have a footnote if it has an id attribute and a link:footnoteArc to a nonempty link:footnote in the same instance. A link:footnoteLink element must have no children other than link:loc, link:footnote, and link:footnoteArc. Every nonempty link:footnote element must be linked to at least one fact The filing is required to reference certain recognized schemas and linkbase. Filings must always refer to recognized files at the specified URI locations. A reference to a local copy will not be allowed. In an instance, the sub-elements of a tuple must have the contextRef attribute with values x-equal to each other. The xsi:nil=true attribute must be used only to convey a value that is different from both zero and different from not reporting the fact at all, or to identify a fact detailed only by a link:footnote. The value of the decimals/precision attribute of a fact must correspond to the accuracy of the corresponding amount as reported in the financial statements. The content of a numeric fact never has a scale factor When choosing the most appropriate element for facts in one or more periods, the elements xbrli:periodType attribute takes precedence over the type attribute, which takes precedence over the elements documentation string, which in turn takes precedence over the label string, which in turn takes precedence over link:reference elements. o o o Do not define or use units that imply a scale factor on a currency. Text that is shown in the financial statements at the bottom of a page or at the bottom of a table preceded by a superscript must appear in the instance as the text of a link:footnote element. Each unit should appear with only one scale factor in a given instance. scheme=http://www.mca.gov.in/CIN>L24223MH1946PLC005434</xbrli:identifier> id=I2010>

o o o o o o

Every numeric fact (such as Number of shares) must also have an associated unit (e.g. xbrli:shares) and the unit must be declared. XBRL document names must be unique in the disclosure system Filers must use one of the taxonomies as specified in the disclosure system as their standard taxonomy. Encoding of all XBRL documents must be UTF8 The xbrli:xbrl element must not have any facts with the precision attribute. Priority for selection of element must be in following order, Period type, data type, documentation,

label and reference. C. Review and verify the instance document Once the instance document is prepared, it needs to be ensured that the instance document is a valid instance document and all the information has been correctly captured in the instance document. Step 2 Download XBRL validation tool from MCA portal There shall be a tool provided at the MCA portal for validating the generated XBRL instance document. Validating the instance document is a pre requisite before filing the balance sheet and profit & loss account on MCA portal. You are required to download the tool from the MCA website and validate the instance document before uploading. There shall also be a facility to view and search the taxonomy. Step 3 Use the tool to validate the instance document Once the tool has been downloaded, the next step is to validate the instance document. The following validations shall be performed by the toolo o Validating that the instance document is as per the latest and correct version of taxonomy prescribed by MCA All mandatory elements have been entered o Other validations as per taxonomy Step 4: Perform pre-scrutiny of the validated instance document through the tool Once the instance document is successfully validated from the tool, the next step is to pre-scrutinise the validated instance document with the help of the same tool. For pre-scrutinizing the instance document, a working internet connection shall be required. In the Pre-scrutiny, the server side validations (i.e. validations which are to be validated from the MCA21 system) shall be performed. Also, there shall be a feature provided in the tool to verify the appearance of the generated XBRL instance document using the built in Viewer. It is imperative that the company should use this feature to verify the accuracy of the instance document. Step 5: Attach instance document to the Form 23AC and Form 23ACA There shall be a separate set of Form 23AC and Form 23ACA available on the MCA portal for filing in XBRL form. First fill up the Form 23AC and Form 23ACA. Thereafter, attach the validated and prescrutinised instance document for Balance sheet to Form 23AC. Similarly, the instance document for Profit and Loss account is to be attached to Form 23ACA. Separate instance documents need to be attached w.r.t. Standalone financial statements and consolidated financial statements. Step 6: Submitting the Form 23ACA and Form 23ACA on the MCA portal

After the forms are filled, you are required to perform pre-scrutiny of the form, sign the form and then upload the same as per the normal eForm filing process. It shall be validated that the attached instance documents are validated and pre-scrutinised from the XBRL validation tool. Viewing of balance sheet and profit and loss submitted in XBRL form on MCA portal: The XBRL instance documents submitted along with Form 23AC and 23ACA are in machine readable format. Therefore, for viewing the same in a human readable format, these shall be converted into human readable format by the MCA21 system. For viewing the same on MCA21 portal and for taking certified copies of the same, these converted documents shall be made available

Advantages and Disadvantages of XBRL

The Advantages of XBRL XBRL is a universally accepted information sharing tool. XBRL is available universally in many countries and facilitates sharing business information in many languages, on virtually any computer platform and in multiple accounting standards. Investors can access business information electronically with XBRL thereby enabling almost real-time analysis. Business information tagged with XBRL can be converted into a variety of formats including HTML, spreadsheets and databases. Because XBRL is so widely accepted, companies can increase automated information sharing with minimal implementation costs. XBRL is beneficial for a variety of stakeholders. XBRL has broad appeal because it can be utilized by investors to facilitate analysis of financial results, by companies to eliminate manual input and review of information passed through the financial reporting process, and by governmental entities to efficiently gather information from business. XBRL can drive business information sharing efficiencies in a variety of situations. Companies should begin to explore using XBRL in other ways once they complete SEC compliance requirements. XBRL adapts well to a variety of uses. XBRL is not just a financial reporting tool. XBRL can be used in a variety of business information sharing situations. XBRL could streamline tax return preparation and reporting, sharing of non-financial business information, like production volumes, inventory reserves or merchandise shrinkage. XBRL could facilitate internal corporate efficiencies including the automated movement of information from its source to its end use. XBRL can also enable information sharing between companies and their vendors, customers and business partners. Consider for instance that automated matching of purchase orders, receiving documents and invoices could be automated utilizing XBRL technologies. In addition, there is open source taxonomy, Global Ledger, that companies could utilize to jump-start the use of XBRL within their organization XBRL provides context, validation, persistence and reusability. A company can use XBRL to improve both the speed and accuracy of information moved through its reporting cycle. In addition, XBRL can improve spreadsheet controls by electronically accessing information from source systems

thereby significantly mitigating human input errors. In addition, business information tagged with XBRL persists from period to period and is thereby easily reusable. XBRL is Open Source. Organizations have paid to develop taxonomies that can be used without any cost to those that use them. There are also web-based readers to read the taxonomies and web-based tools for rendering XBRL Instance files. Even Microsoft Office, a tool widely available in almost every company, is XML enabled (XBRL is a special type of XML). By utilizing the freely available XBRL resources, companies can benefit from XBRL while keeping implementation costs to a minimum.

Disadvantages:

Inexperienced users

Not all accountants have familiarity with XBRL; in fact, some have only heard of the language. XBRL's complexity combined with letting inexperienced users create data for transmission increases the opportunity for errors. These errors lead to a lack of confidence in the system and by investors. Because of this reason, many companies outsource the implementation of XBRL instead of letting in-house management information systems resources (MIS) manage the implementation. This outsourcing leads to increased cost and defeats the cost-cutting benefits associated with implementing XBRL.

Company transparency

A big push for the use of XBRL involves financial transparency. XBRL takes away a company's ability to "hide" financial tricks in the books. Despite the fact that XBRL's design makes filing financial information easier, cheaper and faster, investors could find themselves digging deeper to determine the exact data reported.
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Security

Because XBRL data remains available at all times, it requires more security to maintain its integrity. These stricter security requirements not only affect security breaches initiated outside of the company's database, but security breaches from within the company as well. More accurate data makes XBRL a great tool, but it also means the data must remain secure. If a data breach occurs and investors gain access to the breached data (because of its constant availability) then inaccurate investment decisions could stem from the breach.

Cost

The largest disadvantage remains cost. According to Malin, Bergquist and Company, LLP, "Although some experts say, over time, XBRL could lead to up to a twenty five percent

decrease in reporting costs, some companies may find it difficult to justify the initial costs... " Unless a company has an automated tagging process, tagging XBRL data consumes hours of labor, increasing the cost associated with using the language.

Read more: Disadvantages of Using XBRL | eHow.com http://www.ehow.com/list_5843829_disadvantages-usingxbrl.html#ixzz2CNwAo8DE

Advantages:

Automated Data Processing

Extensible Business Reporting Language identification tags reduce and eliminate the need for employees to manually input data into software applications like Excel or Oracle for transfer to electronic tools such as a website or a blog. Because computers can read the identification tags easily there is no need to manually compare entered data. Data entry keying mistakes are quickly analyzed and highlighted automatically using XBRL.

Regulated Financial Reporting

In May 2008, the Securities and Exchange Commission (SEC) voted to require all public companies to use XBRL to file their financial reports with the SEC's EDGAR database. It is anticipated that the change will provide investors and other government agencies with increased data integrity and uniformity. The change may also allow for increased transparency of public owned companies' financial records for view by investors. Over time this may help regulators to notice the widening of gaps in profits and losses and out of balance investment trends in tools such as bundled mortgage instruments.
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Cost Savings

An earlier tool used across the Internet that is similar to XBRL is HyperText Markup Language (HTML). Anyone who has used HTML knows how cumbersome the back-end tags can be. Prior to the SEC's ruling, many public companies filed their financial records with regulators using HTML, spreadsheets or Portable Document Format (PDF) which allowed for more errors and slower auditing of data. Combined, this equaled higher costs to send, receive, validate and audit the financial records. XBRL is expected to reduce these costs significantly. If these costs are transferred to investors, the financial savings generated by the new tool will be widely realized. Additionally, the tool is being developed by an international non-profit association of about 450 businesses, government agencies and organizations which allows for non-partisan input, recommendations and guidance.

Multi-Language Capability

XBRL can read and understand data sent between various computers using different languages. The taxonomies and tags associated with the system are designed to be read by computers and not humans which allows for speedier multi-language data reads. Software and mapping tools allow businesses to transfer existing information into XBRL quickly and efficiently. Auditors around the world can devote more of their time to reviewing data received from another country rather than focusing on validating the accuracy of the information. Extensible Business Reporting Language can also read and understand data sent using multiple accounting standards.

Time Savings

One of the largest benefits to be realized from using XBRL is time savings. For example, in the past it might take an hour to locate a specific piece string of data using an older tool; using XBRL it will take less than a second to locate the data. Because the system allows for automated machine-to-machine communication, accountants, data entry clerks, stock exchanges and auditors can receive and begin to review and study blocks of data at significantly reduced speeds. The time reduction will allow for increased focus on analysis which may prevent financial markets from shifting and turning down--absent the knowledge of regulators and other national and international government agencies.

Data Analysis

Businesses can use software to automatically validate data electronically received through XBRL. The software can also analyze the data and spot high level problems that auditors and accountants can examine much deeper than they previously did. The deeper, more thorough analysis will equip business leaders with greater confidence to make financial decisions that impact their companies, the stock market and the global community. Additionally, banks and other financial institutions can analyze loan applications as well as a borrower's financial records more quickly and more accurately which may increase the approval of good loans and significantly lower the acceptance of loans to high risk borrowers

Read more: The Advantages of XBRL | eHow.com http://www.ehow.com/about_5066285_advantagesxbrl.html#ixzz2CNwNH3jl