National Scenario

As relates the Scenario of implementation of XBRL in India is concerned, financial reporting using XBRL along the lines of filing with the SEC is yet to come up into effect. However a few of the regulators have initiated with the XBRL filings.

The Reserve Bank of India (RBI) is the Central Bank of India, established on 1 April 1935 in accordance with the provisions of the RBI Act, 1934. As a part of online filing of returns, the RBI also felt the need for adoption of best international technology solution, such as XBRL, which attempts standardization of business reporting especially financial reporting. The RBI embarked on a plan to migrate the entire bank regulatory reporting into an XBRL framework in a phased manner. The capital adequacy returns based on Basel II norms was the first return to be XBRLised. With the aim of keeping the reporting simpler for banks and at the same time leveraging the benefits of XBRL reporting, it was decided to develop a user friendly software (that does not expose the XBRL tags), which would be supplied by RBI itself, and used by the banks to file information. On October 6, 2008, RBI launched the XBRL based reporting system for Capital Adequacy returns.

The XBRL reporting framework is now steadily being extended to encompass other returns. Some of the forms which are XBRLised are Form-RCA 2 (Liquidity Returns) and GPB Return (Gap Position and Balances).

As per the RBI press release dated August 14, 2008 and December 17, 2008, the RBI stated that it could bring down the number of returns from 291 to 225 with the use of XBRL. The taxonomies used for these returns have the core taxonomy as C&I developed by ICAI, which has been extended appropriately. Further the RCA – 2 taxonomy is broadly based on Co rep taxonomy of the European Union and is also in line with C&I taxonomy.

Both the leading stock exchanges of India, BSE and NSE have migrated to XBRL from paper based model and offer a unified electronic platform, popularly known as ‘Corpfiling’ system, which enables the Companies listed in either or both of the exchanges to electronically file their disclosures. The system helps the investors get real-time access.

SEBI is putting in place a unified regulatory filing system for all listed companies and market entities in a standardised format to enable dissection of bulky documents for relevant information without any delay. Besides disseminating the information on real-time basis to investors and others, the XBRL technology-based new system will also help SEBI itself as also other regulatory and investigative agencies in monitoring any irregularities in the affairs of companies and market intermediaries. In addition to mandatory regulatory filings to be made under listing agreements and other regulations, the entities would have to use the new XBRL-based platform for all their reporting purposes to the regulator. It is currently in the process of finalizing the technology provider for the system. It is also in the process of developing taxonomy for Mutual Fund

The Ministry of Corporate Affairs (MCA) in India has made it mandatory for certain class of companies (Phase 1) to file balance sheets and profit and loss accounts for the year 2010-11 onwards by using XBRL. The financial statements required to be filed in XBRL format will be based upon the taxonomy on XBRL developed for the existing Schedule VI and non-converged accounting standards notified under the Companies (Accounting Standards) Rules, 2006.

Coverage in Phase I to file the Financial Statements for year 2010-2011 in XBRL form would be for the class of companies  who are listed in India and their subsidiaries, including overseas subsidiaries and all companies having a paid up capital of Rs. 5 Crore and above or a Turnover of Rs 100 crore or above . These companies are permitted to file upto 30-09-2011 without any additional filing fee.

This represents a significant change in the manner in which companies are required to share financial information with regulatory authorities. XBRL will facilitate the transmission of data in electronic form between companies and different regulatory agencies in India, and has the potential to increase comparability and transparency of financial information.

The versatility of the XBRL framework provides significant opportunities in the area of regulatory filings. In India, in particular, there is a considerable scope for reducing overlaps in filing information, which today is span a number of regulatory agencies viz the ROC, Stock Market Regulators, RBI, Stock Exchange, IT department, Excise, Custom & Sales Tax department, etc.

Regulators are taking steps to make entities under their domain to get XBRL compliant. The aim is to make data about fund movements within available at a single place in electronic format so as to make multiple analysis and forecast. This kind of information pool would also come in handy for regularities in making market forecast and taking presumptive measures in case of any unfavorable trend.