XBRL Tagging & Filing 

Introduction

XBRL (eXtensible Business Reporting Language) tagging and filing is a regulatory requirement mandated by the Ministry of Corporate Affairs (MCA) for certain categories of companies in India. ComplyQuick offers specialized services to facilitate accurate and compliant XBRL tagging and filing, ensuring adherence to MCA guidelines. This detailed service description explores the significance, regulatory framework, process, and penalties associated with XBRL tagging and filing.

Significance of XBRL Tagging & Filing

XBRL is a standardized language for the electronic communication of business and financial data. The tagging and filing of financial statements in XBRL format offer several advantages:

1. Standardization: Ensures consistency and comparability of financial data across different companies and sectors.
2. Efficiency: Facilitates automated data collection, analysis, and reporting, reducing manual errors and processing time.
3. Transparency: Enhances transparency by providing stakeholders, regulators, and investors with easy access to accurate financial information.
4. Regulatory Compliance: MCA mandates certain categories of companies to file their financial statements in XBRL format, ensuring compliance with statutory requirements.

Regulatory Framework and Compliance

The XBRL tagging and filing process is governed by specific regulations and guidelines, including:

• Companies Act, 2013: Provides the legal framework for financial reporting and disclosure requirements.
• MCA Notifications: Specific directives and notifications issued by the MCA regarding XBRL filing requirements for different classes of companies.
• XBRL Taxonomy: Prescribed taxonomy (or dictionary) by the MCA for tagging financial data elements.

Types of Companies Required to File XBRL

As per MCA guidelines, the following categories of companies are required to file their financial statements in XBRL format:

1. Listed Companies: Companies listed on stock exchanges in India.
2. Companies with Paid-up Capital: Companies with specified thresholds of paid-up capital and turnover as per MCA notifications.
3. Banking and Insurance Companies: Companies engaged in banking and insurance sectors.

Process of XBRL Tagging & Filing

The XBRL tagging and filing process involves several sequential steps to ensure accuracy and compliance:

1. Preparation of Financial Statements

• Conversion to XBRL: Financial statements, including Balance Sheet, Profit & Loss Account, Cash Flow Statement, and notes to accounts, are converted into XBRL format using authorized software.

2. XBRL Tagging

• Mapping to Taxonomy: Each financial data element is tagged with the appropriate XBRL tag as per the MCA taxonomy.
• Accuracy Check: Verification and validation of tagged data to ensure accuracy and completeness.

3. Generation of Instance Document

• Instance Document: Compilation of tagged financial data into an instance document (.XBRL file) ready for submission.

4. Filing with MCA

• Form AOC-4 XBRL: Companies upload the XBRL instance document along with Form AOC-4 XBRL on the MCA portal.
• Digital Signature: Authentication of filing with digital signatures of authorized signatories.

5. Acknowledgment and Compliance

• MCA Acknowledgment: Upon successful submission, MCA issues an acknowledgment confirming receipt of XBRL filings.
• Annual Compliance: Ensuring timely and accurate filing of XBRL documents as per MCA deadlines.

Responsibilities of Companies and Professionals

Both companies and XBRL professionals have specific responsibilities to ensure compliant XBRL tagging and filing:

Company Responsibilities

• Preparation of Financial Statements: Ensure accurate preparation and conversion of financial statements into XBRL format.
• Timely Filing: Adhere to prescribed timelines for filing XBRL documents with the MCA.

XBRL Professionals’ Responsibilities

• Tagging Accuracy: Ensure accurate mapping and tagging of financial data elements as per MCA taxonomy.
• Compliance Guidance: Provide guidance on XBRL filing requirements and regulatory updates to companies.

Penalties for Non-Compliance

Non-compliance with XBRL tagging and filing requirements can result in penalties and legal consequences:

• Financial Penalties: Companies and their officers in default may face penalties under the Companies Act, 2013. Penalties can range from INR 1,000 to INR 5,000 per day of default, with a maximum limit set by the MCA.
• Legal Proceedings: Non-compliance may lead to legal proceedings, regulatory sanctions, and challenges in corporate governance.

Benefits of Professional Assistance

ComplyQuick services for XBRL tagging and filing offers several benefits:

• Expertise: Experienced professionals ensure accurate XBRL tagging and compliance with regulatory requirements.
• Efficiency: ComplyQuick helps in saving time and resources for companies, allowing focus on core business activities.
• Risk Mitigation: Professionals minimize errors and ensure timely filing and reporting to regulatory authorities.

Conclusion

XBRL tagging and filing is a crucial requirement for companies mandated by the MCA to ensure transparency, accountability, and regulatory compliance in financial reporting. At ComplyQuick, we provide specialized services to facilitate accurate and compliant XBRL tagging and filing, leveraging our expertise in MCA regulations and XBRL taxonomy.

Our commitment to accuracy, efficiency, and compliance ensures that your company’s XBRL filing obligations are met seamlessly. Contact us today to learn more about our XBRL tagging and filing services and how we can assist your company in achieving regulatory compliance and operational excellence.