XBRL (eXtensible Business Reporting Language) is primarily prepared by public companies, listed entities, and, depending on the jurisdiction, certain private companies or large enterprises to submit financial data to regulators. Key preparers include companies filing with the U.S. Securities and Exchange Commission (SEC), European firms complying with ESEF regulations, and entities filing in countries like Singapore (ACRA) and the Netherlands (KVK).
The SEC Rule—“Interactive Data to Improve Financial Reporting”—requires domestic and foreign companies using GAAP and foreign private issuers using International Financial Reporting Standards (IFRS) to provide their financial statements in the XBRL format as an exhibit to their periodic and current reports and ...
4. Directors prepare financial statements; audit committees monitor the integrity of financial information. 5. Auditors audit the financial statements and perform other procedures on other parts of the annual report.
Since most data collection formats are static and do not allow users to interact with data, the SEC in 2009 mandated XBRL as the format in which companies submit quarterly and annual financial information.
XBRL stands for eXtensible Business Reporting Language, a global standard for digital business reporting. It enables seamless data exchange between organisations and regulators, ensuring accuracy and compliance for business information.
All companies (limited or unlimited by shares), including dormant companies, are required to file XBRL FS in accordance with the filing requirements. Find out more about who needs to file financial statements.
Applicability of XBRL Filing for Companies
Every company with a turnover of or more than Rs. 100 crore. Every company with a paid-up capital of or more than Rs. 5 crore.
The following categories of entities are also not required to file XBRLs:
Businesses, regulators, governments, analysts, investors, and accountants all use XBRL. Some of the use cases for XBRL include: Businesses – To provide information to regulators, move data around, manage risk, and measure activity.
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Public companies in the U.S. are required to submit their financial statements in XBRL format as part of their periodic SEC filings. This includes key documents such as Form 10-K (annual reports) and Form 10-Q (quarterly reports).
The responsibility for preparing financial statements in accordance with generally accepted accounting principles (GAAP) lies with corporate management.
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Section 292 of the Corporations Act 2001 (Corporations Act) requires the following entities to prepare financial reports:
If a company fails to file the copy of the Financial Statements in XBRL format to MCA within prescribed time limit, it is liable to attract penalty, the provisions which are listed as follows: Company: Fine of Rs. 1,000 for everyday till default continue (maximum of Rs. 10,00,000)
Accountants who are not CPAs can prepare financial statements that may meet your business needs. However, a compilation report, review report or audit report cannot be attached to any financial statements prepared by a non-CPA. Nor can a non-CPA prepare a “Notice to Reader”.
XBRL enables preparers to utilize software to tag all financial items in their business reports to the elements within a taxonomy. This is accomplished with an Instance Document which can be electronically exchanged and validated between computers or viewed in a human readable format (this is called rendering).
Although XBRL is required by the SEC, the demographics of XBRL users is far wider than the pool of businesses that complete SEC filings. Business filers are one user group for the markup language. Analysts and investors make up additional user groups.
It provides 10 examples of financial information users: 1) management, 2) investors, 3) customers, 4) competitors, 5) government agencies, 6) employees, 7) investment analysts, 8) lenders, 9) suppliers, and 10) the general public.
The four core financial statements are the Balance Sheet (snapshot of assets, liabilities, equity), the Income Statement (revenues, expenses, profit over time), the Cash Flow Statement (cash inflows/outflows over time), and the Statement of Shareholders' Equity (changes in owner investment over time), all crucial for understanding a company's financial health.
Applicability of XBRL Filing
This includes: Public companies listed on the Indian stock exchange, including their Indian subsidiaries. Companies with ₹100 crore or more as their annual turnover. Companies having a paid-up capital of Rs 5 Crore or more.
The two-year rule. The “two-year rule” is a provision that applies when determining a company's size for corporate reporting purposes. A company qualifies as micro, small or medium-sized once it has met the size limits in its first ever financial year or otherwise in two consecutive financial years.
All entities created in the United States — including those previously known as “domestic reporting companies” — and their beneficial owners are now exempt from the requirement to report beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN) under the Corporate Transparency Act (CTA ...
XBRL can connect companies directly with data users, providing verified information for precise analysis. It also increases the speed and accuracy with which intermediaries such as data providers can consume information and offer insights.
In many countries, common users of XBRL include: regulators of stock exchanges and securities, banking regulators, business registrars, revenue reporting and tax-filing agencies, and national statistical agencies.
Exemption from Preparing Consolidated Financial Statements: