XBRL – Extensible Business Reporting Language

XBRL is an Extensible Business Reporting Language for electronic communication of business information providing major benefits in the preparation, analysis, communication of Annual Financial Statements.

Digital reporting in the format of XBRL will assist companies with filing their Annual Financial Statements to egress from a PDF reporting format to a more structured format. This will ultimately reduce the burden of multiple submissions to different regulators.

XBRL submissions became effective 1 July 2018

Have your clients been asking you, as the auditor/accountant, what XBRL/iXBRL is, leaving you feeling uncertain and tongue-tied?

Introducing the latest requirement for annual financial statements submission applicable to all companies that are required to be audited.

The Companies Intellectual Property Commission or “CIPC” has issued a compliance requirement that came into effect on 1 July 2018.

This entails that all entities that are required to have their annual financial statements audited, will need to submit their XBRL-compliant, audited financial statements to the CIPC as part of their annual return submission.

Furthermore, you aware that the CIPC is now empowered to enforce a 10% of revenue penalty for non-compliance with certain CIPC requirements.

• What are the benefits of using XBRL?
  – Obtain data which can be entered automatically into systems without re-keying, re-formatting  or other “translation” effort;
  – Dramatically reduce costs by automating routine tasks;
  –  Quickly and automatically identify problems with filings;
  – Analyse and compare data much more quickly, efficiently and reliably, and can benefit from the use of software in validation and analysis;
  – Monitor data and activities and reach judgements with far greater speed and confidence;
  – Focus effort on analysis, decision-making and dealing with counterparties rather than on data manipulation;
  – Provide a much faster and focused response to counterparties;
  – Will eventually provide one common standard of reporting to all regulators in South Africa, meaning the same set of annual financial statements will be re-usable. Elimination of duplications and differences in reporting to various regulators will be achieved.

 

Which Entities will be using XBRL for submission of AFS or FASs?

In terms of Section 33 of the Companies Act 71 of 2008, and regulations 28, 29 and 30 of the Companies Regulations of 2011, the following entities as they submit Annual Returns they need to also submit their AFS’s or FAS’s through XBRL as from 1 July 2018
– All public companies;
– State owned companies;
– Non-profit entities.

 

How will Close Corporations be affected by the roll-out of XBRL?

According amendment of section 58 of the Closed Corporation Act 69 of 1984 section 58, as substituted by section 12 of Act 38 of 1986 and amended by section 4 of Act 64 of 1988, the members of a corporation shall within six months after the end of every financial year of the corporation, cause annual financial statements in respect of that financial year to be made out. Insertion of subsection (2A) Section 30 (2) (b), and (3) to (6) of the Companies Act, read with the changes required by the context, apply to a corporation that is required by the Regulations made in terms of section 30 (7) of the Companies Act, to have its annual financial statements audited.,

Audit rules
Will XBRL files be required to be audited?

– The CIPC portal for uploading of AFSs or FASs in XBRL format will have a policy checkbox that will be mandatory to click by users before uploading will be allowed. The policy will declare that by uploading AFS or FAS data, the particular entity provides assurance that the AFSs or FASs have been approved and signed-off by directors and/or and auditors, even though PDFs won’t accompany the uploaded data.

– Qualifying entities will therefore still be required to maintain audit or independent review requirements as currently prescribed by the Companies Act, but only the XBRL format of AFSs or FASs will be uploaded via the CIPCs portal. Entities are however required by the Act to keep audit and independent review reports for a period of seven years, and the CIPC can at any point request access to these reports.

more information please contact us

reference: cipc.co.za