Xbrl conversion services blue consulting

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

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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

http://www.xbrlconsulting.co.in/�


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.

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2. Need for XBRL

No standard format of reporting

Language dependency

Extensive manual efforts on data analysis

Foundation for IFRS implementation

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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.

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http://www.corpfiling.co.in/home/homePage.aspx�


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.

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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.

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…..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.

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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



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

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http://bigfoot.corefiling.com/yeti/resources/yeti-gwt/Yeti.jsp�


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



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



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.



…contd. (How to decide a service provider?)

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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.



…contd. (How to decide a service provider?)

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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)?



11. Interesting facts about XBRL in India

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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.



…contd. (Interesting facts…)

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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.



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.



…contd. (About us)

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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.



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

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Chandan Goyal

Chief Executive Officer

[email protected]

+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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