XBRL filing applicability
XBRL Filing Applicability: Who Needs to File and Why?
In this post, We will discuss XBRL filing, its application, and its benefits. XBRL is a standardized format for reporting financial accounts that ensures data integrity and efficiency. We’ll talk about which companies must file in XBRL, what exemptions exist, and how it simplifies financial reporting.
Let’s look at each section in detail:
What is XBRL?
XBRL, or eXtensible Business Reporting Language, is a digital format used worldwide for sending financial and business information. It enables organizations to efficiently organize, analyze, and present financial information.
In India, the Ministry of Corporate Affairs (MCA) has implemented XBRL filing for financial statements through the MCA portal. Certain companies are supposed to submit their profit and loss statements and balance sheets to the Registrar of Corporations (ROC) in the XBRL format under the Companies (Filing of Documents and Forms in XBRL) Rules, 2011.
Applicability of XBRL Filing
Some companies must file their balance sheets, profit and loss statements, and eForm AOC-4 XBRL with the ROC in XBRL format. This includes:
- Public companies listed on the Indian stock exchange, including their Indian subsidiaries
- Companies with ₹100 crore or more in profit
- Companies with ₹100 crore or more in profit
- Companies must prepare financial statements under the Companies (Indian Accounting Standards) Rules, 2015.
However, certain companies are exempt from filing in XBRL format, such as:
- Non-banking financial firms (NBFCs)
- Housing finance firms
- Companies in the insurance and banking
Once a firm files its financial statements in XBRL under Section 137 of the Companies Act, it must continue to do so even if it no longer meets the initial requirements.
Benefits of XBRL Filing
One of XBRL’s main benefits is its ability to maintain data consistency using vertical and horizontal controls. This guarantees that reports fulfil quality standards and comply with specified conditions and criteria.
Key Benefits of XBRL are:
- Data consistency (vertical and horizontal control)
- Automating operations to improve efficiency
- Cost savings by reducing manual labour
- Data transparency leads to greater insights
- More straightforward data comparison and analysis
- Reliable and quicker processing
- Improved reporting quality
- Financial data that is accurate and free of errors
- Time-saving and cost-effective
- Safe data handling
- Improved decision-making with organized reports
- Smooth data extraction and analysis
XBRL enables companies to shift from manual, time-consuming processes to automated, efficient reporting. It reduces data re-entry, making it simpler to convert financial reports to formats such as SQL or Excel. This helps data analysis and allows investors to easily compare financial statements.
And with that, we conclude this post. Please leave any questions or comments in the space provided below; we are happy to answer them.
FAQs
1. What are some of the limitations of XBRL?
Ans: Xbrl has some limitations, including size and specs. In XBRL, dimension-related calculations are complicated.
2. Can XBRL be opened in Excel?
Ans: XBRL uses a variety of features that are required to modify the forms of XBRL reports. It makes it easier to see and add the same XBRL document and reports directly into Excel.
3. How do companies prepare XBRL statements?
Ans: Companies can develop their XBRL papers internally or hire a third-party service. Furthermore, XBRL-aware accounting software solutions are available to enable data export in XBRL format.
