04 Jun COMPANIES: “XBRL” IS COMING SOON. WHAT IS IT AND ARE YOU AFFECTED?
The Companies and Intellectual Property Commission (CIPC) will from 1 July 2018 require that all Annual Financial Statements (AFS) submitted to the CIPC be in eXtensible Business Reporting Language (XBRL) format.
What is XBRL and what are its benefits?
It is a global standard for digital reporting. It uses a tagging software system whereby data can be used across many platforms without needing to recapture it.
This means it saves time, is more accurate and can be used as an analytic tool. For example, CIPC will be able to meaningfully compare AFS from different organisations which will be of value to users such as investors.
In addition, XBRL quickly identifies submission problems (making them quick to correct) and is extremely cost effective.
It is widely used overseas – for example, people submit their income tax returns in the UK using XBRL.
Who has to submit annual financials to CIPC?
Basically, any entity which is required by the Companies Act to have their AFS audited. These include:
- Public companies and State Owned Enterprises such as Eskom,
- Companies holding fiduciary assets of R5 million or more (estate agents’ trust accounts for example),
- Non–profit companies carrying out activities which are in the public interest, such as a wetlands reserve,
- Non-profit companies created by the State,
- Companies whose public interest score is 350 or more,
- Any company whose public interest score is at least 100 and compiles its AFS in-house.
If you fall into one of these categories speak to your accountant who will guide you through the process of creating your AFS in XBRL. Remember the implementation date is 1 July this year.