BackDeadline for new reporting platform nears, glitches remain
Deadline for new reporting platform nears, glitches remain
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New Delhi: The ministry of corporate affairs (MCA) is set to launch by the end of the month, a live platform for a computer language in which companies will have to report their financial statements, but analysts and technology companies say there are still some issues that need to be addressed.
There is no updated validation tool that will test the XBRL (eXtensible Business Reporting Language) software developed by various vendors, the project lacks extensions to the glossary of financial terms—known as taxonomy—and analysts and investors are not allowed to download the data in the XBRL format, they add.
By 30 November, around 30,000 companies with a paid-up capital of ₹ 5 crore and more, or a turnover of at least ₹ 100 crore, have to file their profit and loss account and balance sheet for the year ended 31 March in XBRL. The ministry missed a deadline of 30 September of implementing the project because both the taxonomy and the validation tool had to be revised. While an updated taxonomy without extensions has been put up by the ministry on its website, it is still working on the validation tools. “Most of these issues have been addressed, revised validation tools will be up this week and the platform will go live by the end of this month," said a ministry official closely monitoring the project. “By 30 November, most companies falling in the first category will be able to file their financial statements," added this person who did not want to be identified. MCA wants to switch to XBRL as data representation in that format is more precise and gives companies less scope to manipulate numbers.
However, the ministry is not allowing extension or tagging of items which essentially mean the same and are, therefore, used interchangeably. For instance, sales, turnover, income or revenue. “This is to avoid confusion when the computer is picking data. In the case of SEC (market regulator Securities Exchange Commission) in the US this has been allowed but is creating problems," the ministry official said. It will be quite a task for MCA to do data analytics, but extensions are desirable, said Arun Bhatnagar, chief executive officer, SoftPark 21 (India), which provides XBRL solutions.
MCA’s attempt of putting up statements filed by companies in PDF (Portable Document Format) form and not XBRL form for public viewing will defeat the purpose of adopting XBRL and will disallow analysis and comparison, said Vinod Kashyap, director, NextGen Knowledge Solutions Pvt. Ltd, a company that trains professionals in XBRL.
“There is a need to convert huge data into meaningful information by automatically extracting XBRL data from financial statements in XBRL format," Kashyap said. “XBRL US has released a tool to show how data reported in XBRL format can be compiled within minutes of being posted on EDGAR and then presented in a way that makes analysis possible."
EDGAR Online provides company related information in XBRL, including SEC filings, custom data and analytical tools.
The ministry official said confidentiality of some data has led to taking this decision. “For instance, profit and loss figures for any private company are not revealed to public. Similarly, there sensitive sectors such as defence, services and exports, when data has to be kept confidential," he said.
There are and will be issues, said Aman Puri, head-IT Solutions, Fujitsu Consulting India, another XBRL vendor. “But what is important is that MCA gets started on the project."
sangeeta.s@livemint.com
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