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Jul 10, 2012

MCA Update on XBRL Filing

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MCA Update on XBRL Filing
MCA vide General Circular No. 16/2012 dated July 06, 2012 has further prescribed certain conditions w.r.t filing of Balance Sheet and Profit & Loss Account and other documents as required u/s 220 of the Companies Act,1956 in XBRL mode for the financial year commencing on or after April 1,2011.

Highlights of the Circular are as follows:

A. Class of Companies required to file accounts in XBRL mode:

It is to be noted that Central Government vide GSR No. 748E dated October 5th, 2011 notified Companies (Filing of documents and forms in Extensible Business Reporting Language) Rules, 2011, and Rule 3 of the said rule prescribes, certain class of companies which are required to do XBRL filing for the financial year ending on or after 31st March, 2011. Rule 3 has been reproduced as follows:
  Rule 3: Filing of Balance Sheet and Profit and Loss Account with Registrar

  1. all Companies listed with any Stock Exchange(s) in India and their Indian subsidiaries; or
  2. all Companies having paid up capital of rupees five crore or above; or
  3. all companies having turnover of rupees hundred crore or above.

  Provided that the companies in Banking, Insurance, Power Sectors and Non-Banking Financial companies are exempted for Extensible Business Reporting Language (XBRL) filing for the financial year 2010-11.
  In reference to the aforesaid rules, the new circular now prescribes the following class of companies to file financial statements for the financial year commencing on or after 1.4.2011:

  1. all companies listed with any Stock Exchange(s) in India and their Indian subsidiaries; or
  2. all companies having paid up capital of Rupees five crore and above; or
  3. all companies having turnover of Rupees one hundred crore and above; or
  4. all companies who were required to file their financial statements for FY 2010-11, using XBRL mode.

  However, banking companies, insurance companies, power companies and Non-Banking Financial Companies (NBFCs) are exempted from XBRL filing till further orders.
  As a result, it is understood that following class of companies are required to do XBRL filing for the financial year commencing on or after 1.4.2011:

  • The first three categories of companies which are required to do filing are same as provided in the Rules.
  • The fourth category inserted in the Circular, requires that every company which had filed financial statements in XBRL for the financial year ending 2010-11, pursuant to the conditions stated in Companies (Filing of documents and forms in Extensible Business Reporting Language) Rules, 2011, has to mandatorily file financial statements in XBRL mode for the financial year commencing on or after 1.4.2011 also. This may be better explained with the help of following example:
    1. Company Name: XYZ Ltd
      Financial Year ending: March 31st, 2011
      Turnover for Financial Year ending 2010-11: Rs. 100 crores
      The company filed the financial statements through XBRL for the Financial Year ending on March 31st, 2011, as per the requirement of Companies (Filing of documents and forms in Extensible Business Reporting Language) Rules, 2011.

      Turnover for Financial Year ending 2011-12: Rs. 98 crores
      Please note that although the turnover has fallen below Rs. 100 crores, and as per the first three conditions, the company is not required to do XBRL filing but the newly inserted fourth point in the circular mandates this company to do XBRL filing for every financial year commencing 01.04.2011. If the condition had not been inserted, then company would not have been required to do the filing in XBRL mode. This example explains the importance of the fourth condition. The same example may be quoted w.r.t paid up capital and listing status of the company.
  Though the notification seems to clearly apply in respect of the Companies , which have already filed their financial statement in XBRL since they satisfy the eligibility in terms of figures like capital or turnover. The rationale behind this financial figures like turnover are subject to change frequently and it will be difficult for MCA to take filing in XBRL in year and then in Non-XBRL in second year. But what about the subsidiaries of listed companies, who have ceased to be subsidiaries or where the entire holdings have been disposed off. Whether same rationale holds good in this case is question of debate.

B. Banking companies, Insurance companies, Power companies and Non-Banking Financial Companies (NBFCs) which were exempted from XBRL filing for the financial year ending March 31st, 2011 will continue to remain exempted till further orders.
C. It has further been informed that the Business Rules, validation tools, etc. required for preparing the financial statements in XBRL format, as per the revised Schedule-VI and Accounting Standards, are under preparation and would soon be made available by the Ministry and the actual date for enabling XBRL filing will be intimated separately.
D. All companies referred to in the Circular, will be allowed to file their financial statements in XBRL mode without any additional fee/ penalty up to 15th November, 2012 or within 30 days from the date of their AGM, whichever is later.


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