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XBRL Applicability On Companies In India

XBRL Full Form

The full form of XBRL is "eXtensible Business Reporting Language".

Definition of XBRL under Companies Act 2013

"Extensible Business Reporting Language" (XBRL), means a standardised language for communication in electronic form to express, report or file financial information by the companies under the Act.

Introduction to XBRL

XBRL is a language for e-communication of financial & business data for business reporting. It is revolutionising step taken by many countries around the world. It offers major benefits to all those who have to create, transmit, use or analyse such information.

XBRL has been developed by XBRL International, Inc. (XII), a not-for-profit consortium of over 600 companies and agencies which is promoting its worldwide use.

The Institute of Chartered Accountants of India (ICAI), the standards setting body has developed taxonomy for Commercial and Industrial companies as per the provisions of Revised Schedule VI to the Companies Act, 1956. It has been developed as per the IFRS architecture 2011.

XBRL India is developing taxonomies for specific industries in consultation with the respective regulators viz. Insurance, Power and NBFCs.

XBRL Applicability: Which class of companies has to file the Financial Statements in XBRL?

Reference to Rule 3 of the Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Rules, 2015 (which has been amended from time to time):-

The following class of companies shall file their financial statements and other documents under section 137 of the Act with the Registrar in e-form AOC-4 XBRL as per Annexure-I:-

(i) companies listed with stock exchanges in India and their Indian subsidiaries;
(ii) companies having paid up capital of five crore rupees or above;
(iii) companies having turnover of one hundred crore rupees or above;
(iv) all companies which are required to prepare their financial statements in accordance with Companies (Indian Accounting Standards) Rules, 2015:

Provided that the companies preparing their financial statements under the Companies (Accounting Standards) Rules, 2006 shall file the statements using the Taxonomy provided in Annexure-II and companies preparing their financial statements under Companies (Indian Accounting Standards) Rules, 2015, shall file the statements using the Taxonomy provided in Annexure-II A:

Provided further that non-banking financial companies, housing finance companies and companies engaged in the business of banking and insurance sector are exempted from filing of financial statements under these rules.”.

Filing of Cost Audit Report [e-Form CRA-4]

A company required to furnish cost audit report and other documents to the Central Government under sub-section (6) of section 148 of the Companies Act 2013 and rules made thereunder, shall file such report and other documents using the XBRL taxonomy given in Annexure-III for the financial years commencing on or after 1st April, 2014 in e-Form CRA-4 specified under the Companies (Cost Records and Audit) Rules, 2014.

XBRL related forms are available here:

XBRL Taxonomies

"Taxonomy" means in XBRL, an electronic dictionary for reporting the business data as approved by the Central Government in respect of any documents or forms indicated in the Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Rules, 2015.

They define the specific tags for individual items of data (such as "net profit"). Different taxonomies will be required for different financial reporting purposes. Different XBRL jurisdictions may have their own financial reporting taxonomies to reflect their local accounting regulations. Many different organisations, including regulators, specific industries or even companies, may require taxonomies to cover their own business reporting needs.

XBRL - Potential Applications

The use of XBRL is quite varied and wide; it can be used in many places especially in reporting financial and business date of organisations. Some of these applications of XBRL are mentioned herein:

  • Reporting of business data to statutory authorities like central govt., state govt., banks, tax authorities;
  • Information exchange between government authorities or departments of one country with other or internally in the country;
  • Reporting of financial data – both internal and external;
  • Filing of loan applications and reports; credit risk assessments;
  • Authoritative accounting literature – providing a standard way of describing accounting documents provided by authoritative bodies.

XBRL - Advantages

XBRL offers many benefits in the field of business reporting and analysis.

  • Improved way of reporting;
  • Very analytical;
  • Automated;
  • Reliable & accurate;
  • Cost effective;
  • Less time consuming;
  • Low risk in data handling;
  • Helps in better decision making.

For more information on XBRL - visit: www.mca.gov.in/XBRL

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