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Blue Consulting Pvt. Ltd.A Finance & Accounts Outsourcing Company
July 13’ 2009
Blue Consulting Pvt. Ltd.Consulting F&A Outsourcing Internal Audit
Detailed presentation on XBRL conversion services
Doing common things, Uncommonly well.
Blue Consulting Pvt. Ltd.www.xbrlconsulting.co.inIndex
Index
2
Back-ground
Need for XBRL
XBRL in India
MCA Mandate
Common terms
Tagging require-
ment
How to tag?
Process Flow
Fee factors
How to decide a service
provider?
Interesting facts about
XBRL in India
Contact usAbout us
Blue Consulting Pvt. Ltd.www.xbrlconsulting.co.inIndex
1. Background
XBRL stands for eXtensible Business Reporting Language.
As the name suggests, XBRL is a language for the electronic communication of
business and financial data which is revolutionising business reporting around the
world.
The standardisation in-built in the XBRL documents provides significant benefits
in the preparation, analysis and communication of business information.
XBRL was started in 1998 by an American CPA, Charles Hoffman. It is being
promoted all over the world by XBRL International, a non-profit organisation of
approx. 450 entities. It is successfully being used in USA, UK, Japan, Singapore
and many other countries globally.
3
Blue Consulting Pvt. Ltd.www.xbrlconsulting.co.inIndex
2. Need for XBRL
No standard format of reporting
Language dependency
Extensive manual efforts on data analysis
Foundation for IFRS implementation
4
Blue Consulting Pvt. Ltd.www.xbrlconsulting.co.inIndex
3. XBRL in India
In India, the Reserve Bank of India (RBI) has already implemented (since Oct 2008)
XBRL-based reporting for three returns: capital adequacy data as per Basel II norms,
Form A, and the GPB Return by banks.
Further, it is mandatory for the top 100 listed companies in India to report their
quarterly results etc., to BSE & NSE in XBRL. It is called Corpfiling.
Now, it is MCA’s turn to implement it on a wider canvas. In the 1st phase, around
30,000 companies in India need to report to the MCA in XBRL this year. Going
ahead, (from FY 2012-13) it is expected that almost 9 lakh companies would need
to report in XBRL in the next three years.
5
Blue Consulting Pvt. Ltd.www.xbrlconsulting.co.inIndex
4. MCA mandate
The Ministry of Corporate Affairs (MCA) has mandated financial reporting in XBRL
from the Financial Year 2010-2011 for
all listed companies and their subsidiaries (excluding overseas subsidiaries),
all unlisted companies having paid up capital of Rs. 5 Crore and above
all unlisted companies having a turnover of Rs. 100 Crore or above
The above companies are permitted to file XBRL compliant documents up to
30.11.2011 or with in 60 days of their due date, whichever is later without any
additional filing fee.
The current mandate excludes banking companies, insurance companies, power
companies, Non Banking Financial Companies (NBFCs).
A practicing Chartered Accountant or Company Secretary or Cost Accountant is
required to certify the XBRL document.
6
Blue Consulting Pvt. Ltd.www.xbrlconsulting.co.inIndex
5. Common terms
Taxonomy
Taxonomy, in general, means a catalogue or set of rules for classification; in XBRL,
taxonomy is referred yo as an electronic dictionary of the reporting concepts
containing computer-readable definitions of business reporting terms, as well
relationships between them; and links connecting them to resources.
Elements
An element is a business or a financial concept which is defined in the taxonomy
according to XBRL specifications. Each element has a type; it is identified by name
and may have a set of attribute specifications as per the XBRL standards.
7
Blue Consulting Pvt. Ltd.www.xbrlconsulting.co.inIndex
…..contd. (Common terms)
Data types
This attribute indicates the data expected for concepts. Common data types are
monetary, string, text block, etc.
Instance documents
The final output, which is converted in XBRL format, is called an instance document.
Two instance documents are generated - Balance Sheet and Income Statement
(Profit & Loss a/c).
For a listed company having subsidiary companies, two sets of instance documents
are generated, i.e., one on a standalone basis and the other on a consolidated basis.
8
Blue Consulting Pvt. Ltd.www.xbrlconsulting.co.inIndex
6. Tagging requirement9
Balance sheet and its schedules
Profit and loss a/c and its schedules
Cash flow statement
Related party transactions (party wise)
Segment reporting
Subsidiary and Holding company information
Associates and Joint Ventures
Detailed tagging
Director’s report
Auditor’s report
Notes to accounts
Text Block tagging
Note: In our experience, detailed tagging takes approx. 90% of total tagging time
Blue Consulting Pvt. Ltd.www.xbrlconsulting.co.inIndex
7. How tagging is done?
For tagging, one need to have a good knowledge of Financial Statements (i.e.,
Schedule VI and Accounting Standards), and familiarity with taxonomy and its
related concepts.
Most software comes can import Financial Statements in Excel and Word
format to start the tagging process.
Typically, on one side there are Financial Statements and ,on the other side,
elements (tags) are displayed. One needs to choose an appropriate tag and
continue tagging the entire Financial Statements.
You can see a detailed view of taxonomy, you can access it here:
bigfootcorefiling.com
10
Blue Consulting Pvt. Ltd.www.xbrlconsulting.co.inIndex
8. Process flow of conversion11
Client Client provides soft copy of Annual Report of FY 2010-11
XBRL conversion service provider
Analysis of Annual Report
Mapping and tagging
Review and validation
XBRL instance document
Client Review and upload of XBRL documents to MCA website
Blue Consulting Pvt. Ltd.www.xbrlconsulting.co.inIndex
9. Fee factors12
XBRL conversion fee is based on the time spent on the conversion process. This
varies across different clients because of the volume of data and level of
complexity in Financial Statements.
The tagging effort, in the case of two companies with a similar number of pages in
their Annual Report can vary as drastically as from 50% to 100%.
The professional fee for XBRL conversion is normally based on the following
factors:
No. of pages in the annual report
No. of subsidiaries of the company
Volume of related party transactions
Level of complexity in the Financial Statements
Blue Consulting Pvt. Ltd.www.xbrlconsulting.co.inIndex
10. How to select a service provider?13
Experience
Ask service providers about their experience in handling Financial Statements across
various industries.
Ask about the number of years in existence; total team size. The nature of services
provided by the service provider can be a good indication of its knowledge of Financial
Statements.
XBRL conversion process
Ask the service provider about its XBRL conversion process. What inputs shall be
required from the client and at what stages?
The amount of additional information required for accurate conversion and filing varies
from company to company; it could include information other than that provided in the
Annual Report.
Blue Consulting Pvt. Ltd.www.xbrlconsulting.co.inIndex
…contd. (How to decide a service provider?)
14
XBRL Team
Enquire about the following from a prospective service provider:
No. of people in XBRL team
Their qualifications
Do they have prior experience on the XBRL conversion process
Is there a separate team or person for review of tagging quality?
This information will help you to assess whether a particular service provider can handle
volumes or not.
Blue Consulting Pvt. Ltd.www.xbrlconsulting.co.inIndex
…contd. (How to decide a service provider?)
15
Clients references
Ask about the service providers’ existing client list.
Ask for at least two reference for whom the service provider has converted financial
reports into XBRL. One phone call can provide you an assurance about the competence
and quality of an XBRL service provider.
Confidentiality of information
A client should enquire about the data handling process at service the provider’s office.
Does the service provider have a policy of signing a confidentiality agreement or an NDA
(non-disclosure agreement)?
Blue Consulting Pvt. Ltd.www.xbrlconsulting.co.inIndex
11. Interesting facts about XBRL in India
16
To convert Financial Statements in XBRL format, one needs to have a professional
understanding of Financial Statements and Business Rules defined for Taxonomy.
Software is just an enabler. It cannot replace or replicate domain knowledge.
Presently, there is no software available in the market which can tag
automatically.
XBRL software prices range from Rs. 5,400 to Rs. 400,000.
Similarly, conversion fees range from Rs. 9,000 per company to Rs. 45,000 per
company and Rs. 300 per page to Rs. 3,000 per page.
Presently, there is not much difference in the effort involved in tagging a listed
company and an unlisted company.
Blue Consulting Pvt. Ltd.www.xbrlconsulting.co.inIndex
…contd. (Interesting facts…)
17
There are service providers who quote their fee over the phone without
ascertaining the nature and complexity of Financial Statements involved.
The quality of tagging (i.e., choosing a particular tag) plays an important role in
making tagged Financial Statements useful for analysis. However, this area is
normally overlooked by clients while engaging any service provider for conversion
service.
Blue Consulting Pvt. Ltd.www.xbrlconsulting.co.inIndex
12. About us18
Blue Consulting Pvt. Ltd. (BC) is a listed service provider for XBRL conversion by MCA.
BC, has its roots in a well established, four decade old chartered accountants firm.
BC provides value added and high quality services in the domain of Finance &
Accounts:
Consulting services
Finance & Accounts Outsourcing Services
Internal Audits
We have a separate division for XBRL conversion services.
We specialize in statutory compliance outsourcing services.
Blue Consulting Pvt. Ltd.www.xbrlconsulting.co.inIndex
…contd. (About us)
19
Key associates at BC have rich experience in the area of Finance, Taxation,
Accounts, Management and Information Technology. Our XBRL team
members also have experience of XBRL filing for UK and US companies as
well.
Utilizing forty years of industry experience and functional expertise, BC looks
innovatively beyond standard solutions to develop new insights, drive
tangible results, and empower clients to achieve greater results.
Providing quality service with complete responsibility is natural to our
corporate culture.
Blue Consulting Pvt. Ltd.www.xbrlconsulting.co.inIndex
13. Contact us Blue Consulting provides value added and high
quality Finance & Accounts related services through
its vast pool of experienced professionals. Our goal
is to be a trusted partner in your business by
bringing value and serving as an integral part of
your set up.
Blue Consulting, or BC, has its roots in a well
established, four decade old chartered accountants
firm. Utilizing forty years of industry experience and
functional expertise, BC looks innovatively beyond
standard solutions to develop new insights, drive
tangible results, and empower clients to achieve
greater results.
For further detail, please log on to:
www.blueconsulting.co.in
20
Chandan Goyal
Chief Executive Officer
chandan.goyal@blueconsulting.co.in
+91 98104 10421
+91 120 4230649
Delhi Pune
“A dream is not thatwhich you see in sleep
A dream is thatwhich does not let you sleep”
Index
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