XBRL Applicability on Filing Annual Accounts

Introduction to XBRL

eXtensible Business Reporting Language (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. The use of XBRL has resulted in cost savings and greater efficiency to all those involved in supplying or using financial data. XBRL is simply a language for information. It must accurately reflect data reported under different standards - it does not change them.

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:

1. To create awareness about XBRL in India
2. To develop and maintain Indian Taxonomies
3. To help companies, adopt and implement XBRL

Applicability to Companies to File in XBRL Mode

Under Companies Act, 2013, ("the Act"), as per Rule 3 of Companies (Filing of Documents and Forms in XBRL) Rules, 2015, the following class of companies shall file their financial statement with the Registrar in e-form AOC-4 XBRL:

1. Companies listed on any stock exchange(s) and their subsidiaries
2. Companies having paid up capital of Rs. 5 crores or above
3. Companies having turnover of Rs. 100 crores or above
4. All Companies which are required to prepare their financial statements in accordance with Companies (Indian Accounting Standard) Rules, 2015

Exemptions to Filing Accounts in XBRL Mode

However, the abovementioned provision has certain exemptions. The following companies are exempted from Rule 3 of Companies (Filing of Documents and Forms in XBRL) Rules, 2015 and are consequently not required to file their annual accounts in XBRL mode:

1. Non-Banking Financial Companies
2. Insurance Companies
3. Banking Companies
4. Housing Finance Companies

Applicability of XBRL to Cost Audit Report

A company required to furnish cost audit report and other documents to the Central Government under Section 148(6) of the Act and Rule 6(6) of the Companies (Cost Records and Audit) Rules, 2014 made there under, shall file such report and other documents using the costing taxonomy for the financial years commencing on or after 1st April, 2014 in Form CRA-4.

Process of Filing through XBRL Mode

The following is a process of how a typical XBRL filing is done, step-by-step:

1. Creation of XBRL instance document
2. Download XBRL validation tool from the MCA portal
3. Use the tool to validate the instance document
4. Perform pre-scrutiny of the validated instance document through the tool
5. Attach instance document to the Form AOC-4 XBRL
6. Upload the Form AOC-4 XBRL on the MCA portal

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.

A company is required to file annual accounts in XBRL mode in succeeding years even if they don't fall under the prescribed criteria of a class of companies mentioned above.

Disclaimer: The above-mentioned information has been based on current law in force. This does not constitute professional advice or guidance. The same is only for knowledge and academic purpose and should not be considered as an invitation to offer professional services or solicitation of any nature of professional work.

Courtesy: CS Akshita Surana and CS Rajat Agrawal

The author can also be reached at csrajatagrawal@gmail.com. The authors are partners at Atticus Legal LLP, an associate firm of Rajat Agrawal & Co.