New Delhi: The ministry of corporate affairs (MCA) expects most companies included in the first phase of the XBRL (eXtensible Business Reporting Language) project to file profit and loss accounts and balance sheets in the format by the year end.

Dr. M. Veerappa Moily Photo by Ramesh Pathania/Mint

MCA wants companies to switch to the format as data representation is more precise and it gives companies less scope to manipulate numbers. Financial statements are currently submitted in the form of PDF (portable document format) files.

The ministry had to extend its deadline twice (the earlier ones were in July and September) because of problems in the taxonomy, or glossary of financial terms, and a validation tool, both of which had to be revised.

While the new deadline is 30 November, companies that held their annual general body meetings in September get an extra month.

“More than 5,100 companies have already filed, and 600-700 filings are being done on a daily basis," said a senior MCA official who did not want to be identified. “By December end, we feel most companies falling in the first category will be able to file their balance sheets and profit and loss accounts in the XBRL format."

Companies with a paid-up capital of 5 crore and above, or revenue of 100 crore, are required to file statements for the year ended 31 March in the XBRL format in the first phase.

Analysts say the process is slow due to the absence of guidance on taxonomy and revisions in the validation tools.

“The filers are taking more time...since there is no taxonomy guide available," said Vinod Kashyap, director, NextGen Knowledge Solutions Pvt. Ltd, a company that provides training to professionals such as chartered and cost accountants on XBRL.

Kashyap said all published taxonomies globally have guides on how to tag information and place data in financial statements.

“Moreover, there is no error-free sample XBRL instance document available at MCA’s website for filers’ guidance," said Kashyap, who ran an online survey in which 86% of XBRL experts said the Indian taxonomy was poorly designed.

Quality of documentation is critical, said Aman Puri, head, information technology solutions, Fujitsu Consulting India, which provides software solutions for XBRL implementation.

“The XBRL documents should be free from any errors or warnings. In case of poor quality of XBRL documents due to data deficiencies or errors, the legal liability rests with the filing organization," Puri said.

The problem does not lie so much in sample documents or guidance to filers, but how to have more and specific tags, said Arun Bhatnagar, chief executive officer, SoftPark 21 (India), which provides XBRL solutions. This will be more in line with XBRL norms in the US and the UK, he said.