ICAI and XBRL

While many countries were exploring XBRL and benefiting from its use, India has not far behind. In 2007, ICAI, being the National Standards setter had constituted a Group for promotion and development of XBRL in India for undertaking the development and promotion of XBRL in India. The Group comprised representatives from Securities and Exchange Board of India (SEBI), Ministry of Corporate Affairs (MCA), Reserve Bank of India (RBI), Insurance Regulatory and Development Authority (IRDA), National Stock Exchange (NSE), Bombay Stock Exchange (BSE), Infosys and others who are supporting ICAI in its XBRL endeavours. In December 2008, spearheaded by the Institute of Chartered Accountants of India (ICAI), the Indian XBRL Jurisdiction, i.e., XBRL India of XBRL International (XII) has been constituted. It was thought that XBRL India, facilitated and established by ICAI would help in building a formal forum for encouraging the adoption of XBRL in India as the standard for electronic business reporting in India, shall develop and manage XBRL taxonomies, and facilitate education and training of XBRL. To govern XBRL India Jurisdiction, a Steering Committee out of the members of the XBRL Group had also been constituted, as per the requirements of XII. The XBRL Group continued as a General Body of members of XBRL India Jurisdiction. Now a section 25 company has been floated for managing the affairs of XBRL India jurisdiction. The company also has support from all the regulators. Moving one step further XBRL, India has also applied for the status of Permanent Jurisdiction to XBRL, International. The Institute of Chartered Accountants of India (ICAI) had been keeping track of the developments in the area of XBRL particularly formulation of taxonomies which form the basis for XBRL reporting.

As mentioned earlier, Taxonomies are dictionaries used by XBRL. These taxonomies are based on accounting standards and other pronouncements on accounting including those contained in relevant legislations. The taxonomies are developed by the standard-setters. For instance, the International Accounting Standard Board (IASB), which issues International Financial Reporting Standards (IFRS), develops taxonomy based on IFRS.

As of now in India, two taxonomies have been developed by ICAI,viz., the C&I Taxonomy and the Banking Taxonomy. Taxonomy on NBFCs is also under development.

The Commercial & Industrial (C&I) Taxonomy is general purpose taxonomy (core taxonomy) and can be used by the entire Commercial & Industrial companies. This taxonomy has been developed to enable companies prepare their financial statements, viz., Profit and Loss statement, Balance Sheet and Cash Flow statement in XBRL format, based on the requirements of the Accounting Standards and Indian company law while adopting the architectural features of the IFRS general purpose Taxonomy 2006. This taxonomy had been exposed for public comments and upon the suggestion of the Reserve Bank of India, had been revised to include the requirements under Clause 41 of the Listing Agreement. This taxonomy has also been acknowledged by XBRL International.

Banking Taxonomy is an extension to the core Indian XBRL C&I taxonomy. The banking specific elements have been added to the core schema. The schema file contains all the element declarations along with there XBRL properties (including the elements of C&I taxonomy). The references for authorative texts for the banking elements are maintained separately. Around 1200 elements (including abstract elements) have been additionally defined for banks. An Expert Group under the convenorship of the member from RBI on the Steering Committee was constituted to develop and review the taxonomy for Banks.

The XBRL International has acknowledged XBRL banking taxonomy. This taxonomy also covers the Financial Statements, viz., Balance Sheet, Statement of Profit and Loss, Cash Flow Statement, accounting policies and disclosure requirements. The taxonomy has been developed conforming to Indian Accounting Standards, requirements of Clause 41 of Listing Agreement, Banking Regulation Act and other RBI Circulars.

Extended links (logical groups of information elements) have been defined separately for banks, to meet the reporting structure of banks. For Balance Sheet itself there are four different extended links for defining the calculation relationships. The first extended link defines the overall calculation relationship, while the other three model the alternative calculations of certain elements. (These are the areas wherein ‘dimensions’ as a data model approach could have been used, but have been currently handled using extended links). For statement of profit and loss and Cash Flow Statement there is only one extended link each. There is a separate extended link for the Quarterly reporting adhering to the requirements of Clause 41 of Listing Agreement.

In case of non-GAAP elements, there are two extended links. One extended link describes the general accounting policies and disclosures required as per accounting standards or other statute. For the disclosure as particularly specified by Banking Regulation Act and other RBI circulars, a separate extended link has been defined as well.

In order to provide access to the industry specific requirements, an entry point is created in the taxonomy. This enables the user to access to the points which are relevant to ones area. For example, for SMC’s a specific entry point is has been created in C&I Taxonomy. This means that the user shall go through the elements applicable to SMC’s only rather than going through the whole taxonomy.

The role of ICAI as a neutral facilitator of XBRL India Jurisdiction in India shall be to assist the regulators and users of the financial statements by:

• Developments of XBRL taxonomies.
• Maintenance and updation of the XBRL Taxonomies from time to time as per the requirements and any revisions in the Accounting Standards.
• Ensure Compliance of taxonomies with Companies Act 1956.
• ICAI shall also update the existing taxonomies as per the requirements of the IFRSs on implementation of IFRSs in India. Now since India is moving towards convergence to IFRS from the year 2011.