Preparations for iXBRL
In September, I talked to Ben Bishop, head of R&D in the Sage Accountants Division about the company's preparations for the new CT Online filing regime - which will require mandatory filing of accounts and computations in the inline XBRL format (iXBRL). We were talking just after Thomson Reuters agreed to buy the Abacus software development team from Deloitte - this is the same bunch who develop the engine for Sage's Corporation Tax module. Here is an edited transcript of what Bishop told me:
The iXBRL implementation project is “on track” and will not be disrupted by the change in ownership. Early work to prove the concept is viable has been completed, and the underlying framework is in place for the application to handle XBRL. Sage and Abacus are confident they can ready an iXBRL compliant CT application for user testing by the middle of 2010.
However, he points out that there is less onus on the CT application to deal with iXBRL, because all it has to do is output the appropriately tagged XBRL file when the computations are complete. The greater challenge for Sage is to handle the electronic filing format within its Accounts Production modules, which will not only have to file iXBRL files to Companies House, but be able to feed the data through to Sage Corporation Tax.
To further complicate the picture, Sage is exploring the possibilities of taking the data tagging method back into Sage 50, which would then support a single data environment from the bookkeeper to the tax man.
“The technical challenge is really around the ‘i’ in iXBRL,” says Bishop. “We know accountants need to have control over how the information is presented to match practice style and to stamp the firm’s professional brand on it.
“iXBRL allows them to do that while embedding code that makes the accounts machine readable. We’ve got to adjust our rendering engine within Sage Accounts Production Advanced so that it can output direct to iXBRL.”
SAPA can already outputs accounts as PDF and Word-compatible files and already supports the current Companies House taxonomy for XBRL. But with as Companies House is now moving towards a common approach with HMRC to online filing, there will be a transitional period while the existing taxonomy is merged into a new standard. Bishop expects to see a subset of this new structure to appear by the end of the year - when HMRC brings its new online CT filing mechanism on stream (scheduled for 23 November).
HMRC’s data scheme has been a long time coming, and developers like Sage are aware that the department’s information needs can change year-on-year. “That’s always a risk as it is driven by legislation,” says Bishop. “We’ve taken that risk into our design by making sure that our taxonomy will be accounting-year specific.”
As a software R&D person, Bishop focuses on the technical challenges involved in staying compliant, rather than joining the chorus of disapproval that has met HMRC’s online filing plans for accounts data.
“If we are going to file online, you need to get behind one standard or another. XBRL is XML with a taxonomy attached. XML is well defined and understood and from a technical point of view, we know where it’s coming from. We’ve taken it forward and have a strategy to build that into our products to support our customers.
“Ultimately HMRC has put this out as a mandate, so it’s a compliance requirement - accountants and software have to file online. Our view is that software is a compliance service and we have to be custodians of the software so users will be compliant and can file accordingly.
“With mandation looming there is understandably a fear of the unknown and XBRL is something accountants may not have been aware of. But the pieces are available to give them compliance through software solutions.”
John Stokdyk, Technology editor