Only 7% cos shift to new reporting format

Govt sends reminder to ICAI as only 7% cos shift to new reporting format.

The government has asked the accounting regulator to remind companies that they have only a week left for switchover to the new financial reporting format, after data showed less than 7% of companies had complied till a week ago.

 All listed companies and some unlisted ones are required to file their financial statements for the year ended March 31 in the XBRL format by November 30, the third revised deadline this year.

 Regulators hope to use this new format as a tool to check accounting frauds. "We are very worried about this abysmal turnout. MCA needs to report back to the secretariat with a report of progress within a month," a ministry official said.

 The conversion to XBRL (eXtensible Business Reporting Language), a global standard for exchanging business information introduced by the ministry of corporate affairs (MCA) earlier this year, is being closely monitored by the Prime Minister's Office after the country was hit by a spate of scams, including the country's biggest accounting fraud at software services firm Satyam Computers in 2009.

 "Some of the big companies have been slack in complying with the procedures," a senior MCA official told ET, adding that the ministry will not give any leeway to any company and the deadline will not be extended.

 Of the nearly 30,000 companies expected to file in the first phase of XBRL conversions this year, only about 2,000 firms have so far come on board and filed with the ministry.

 According to sources, among those yet to file in XBRL format are most of the top BSE-Sensex companies that are audited by the big four accounting firms. "We are writing to accountants across companies to sensitise them and prod them to comply with the new format as soon as possible," Institute of Chartered accountants of India president G Ramaswamy said.

 Industry sources said that many of the big accounting companies lack the knowhow to meet the requirements and have been outsourcing their work to smaller players. Some of them have even sought a six-month extension.

 "Companies as well as accountants need to realise that XBRL is not as trivial as an excel file. It requires domain knowledge," said S Swaminathan, CEO of IRIS Business Services Ltd, one of the first few firms to have filed. XBRL uses an electronic glossary of business and financial terms known as taxonomy.

 Under this, companies report their financial statements using XBRL syntax as an .xml file instead of uploading their balance sheets in .doc or .pdf format.


Source : Economic Times