New Delhi: The corporate affairs ministry will meet software vendors and consultancy firms on Friday to discuss the glossary of terms that will be used to file financial statements in a mandated digital format for the year ended March 2012.
Although no specific agenda note has been floated for Friday’s meeting, several people who are to attend the meeting said key problems related to the draft glossary or taxonomy structure for the eXtensible Business Reporting Language (XBRL) format that was released in April are likely to be discussed.
“We are also looking at getting some clarity on what happens to sectors that were exempted from filing their financial information in the XBRL format,” said one of them on condition of anonymity.
India wants companies to switch to the XBRL format as data representation is more precise and gives companies less scope to manipulate numbers. Financial statements are currently submitted in the form of PDF (portable document format) files.
Since there is little clarity on key issues, several companies have defaulted on the mandated deadlines for filing the financial statements in the XBRL format, said the person cited earlier. Companies are required to file returns within 30 days of holding their annual general meetings.
Power, banking, insurance and non-banking financial companies are exempt from filing in the new format as they report to domain-specific regulators or ministries.
Such companies continue filing their returns in the PDF format.
A second person who is likely to attend the meeting said that in sectors like power, companies are unlikely to begin filing in the XBRL format anytime soon as the power ministry lacks the domain expertise to supervise such a transition. This person too declined to be named.
The delay in implementing XBRL may have contributed to the mismatch of balance of payments data collected separately by the Reserve Bank of India (RBI) and the Central Statistics Office (CSO) and released in May and June.
T.C.A. Anant, the chief statistician of India, said the data collection process will become better and faster once company accounts are collected in the XBRL format.
To be sure, CSO mainly collates merchandise trade data while data with the central bank includes the value of trade in services.
Companies were to use the new taxonomy structure for filing statements for the financial year ended March.
On 28 February 2011, the corporate affairs ministry notified a revised format for Schedule VI of the Companies Act, 1956, under the Companies (Accounting Standards) Rules, 2006, that deals with how companies report on their balance sheet. Following this, on 14 April, the ministry, along with the Institute of Chartered Accountants of India, released a so-called “exposure draft” on XBRL taxonomy for “commercial and industrial” companies as per the requirements of the revised schedule.
The ministry has given all stakeholders until 14 July to file their comments on the draft taxonomy structure. Friday’s meeting is a precursor to the 14 July deadline.
Representatives of several software vendors, including Tata Consultancy Services Ltd, Fujitsu Consulting India and Iris India, along with consultants KPMG India, Deloitte, PricewaterhouseCoopers India and Ernst and Young India, among others, are likely to be present in Friday’s meeting.