The ministry of corporate affairs (MCA)?needs to do more to prepare for the filing of balance sheets and profit and loss accounts in the XBRL (eXtensible Business Reporting Language) format, experts said.
This includes having a taxonomy, relevant documentation, training company personnel and preparing a vendor gateway, among other things, they said.
The XBRL requirement is part of the shift to norms in line with International Financial Reporting Standards (IFRS)?notified by MCA in February.
Companies are required to file their financial statements in the XBRL format with the Registrar of Companies (RoC) for the year ended 31 March.
The taxonomy, which defines financial terms used in business reporting will become the base for XBRL filing, said Ram Iyer, director, accounting advisory services, KPMG in India. Companies need to train their professionals which will enable them to file their financial statements in XBRL format. Besides, a vendor gateway has to be created for companies to do electronic filing using XBRL.
The first phase of filing returns using XBRL will be effective 1 July for all listed companies and their units and firms with a paid-up capital of Rs.5 crore or a turnover of Rs.100 crore and above. It will later be extended to all 900,000 companies.
The ministrys 31 March circular makes no mention of the uploading process, said Vinod Kashyap, director, NextGen Knowledge Solutions Private Ltd.
Both Iyer and Kashyap, who are involved in training professionals on XBRL, said the UK and the US began their preparations well in advance of moving to the new format.
A poorly handled migration can result in the data throwing up errors, they said.
The MCA also needs to decide on an extended taxonomy that will allow for interchangeable terms, such as turnover and revenue, which US companies are free to use but are not allowed by the International Accounting Standards Board (IASB), Iyer said.
IASB has set the guidelines for the norms that India is adopting.
A senior MCA?official who did not wish to be identified said the taxonomy was ready and would be posted on its website soon. All the concerns of companies would be allayed, he said.
MCA, with the help of the Institute of Chartered Accountants of India (Icai), has developed a taxonomy so that a common database can be created for the use of all regulators and government departments, he said.
Training will not be a problem, said G. Ramaswamy, president of Icai. We (Icai) are conducting XBRL training programmes across five regions. By the end of this month a large number of CAs (chartered accountants)?will be XBRL literate, said Ramaswamy.