What you need to know about iXBRL

For close to a decade, financial reporting technology nerds have been investing a lot of time and intellectual activity in XBRL, the eXtensible business reporting language. After years of indifference from accountants, XBRL leapt to the top of the UK profession’s agenda when HMRC set 1 April 2011 as the date from which companies will have to file their Corporation Tax computations and supporting accounts electronically using the data exchange standard.

If you are not fully up to speed with iXBRL, you now have just over a year to get your processes and systems ready for the switch. This article sets out some background information about XBRL and iXBRL and presents a range of scenarios to help you plan your preparations.

Countdown to iXBRL
 

Now - HMRC CT Online software with CT600s with iXBRL accounts & computations capability available.

Mar-Sept 2010 - Some software packages recognised by HMRC for online filing. More products will follow.

1 Apr 2010 – CT returns relating to financial years ending after this date should be filed with accompanying accounts and computations in iXBRL, but you can buy extra time by filing accounts early before the 31 March 2011 deadline.

Summer 2010 - Companies House plans to open voluntary iXBRL filing mechanism for abbreviated accounts.

31 Mar 2011 – Final date for which non-electronic CT600s and PDF computations & accounts will be accepted.

Summer 2011 - voluntary iXBRL extended to all accounts.

What is XBRL & how does it affect you?
XBRL was originally devised as a means to transfer accounts and financial data between electronic systems. Based on XML (eXtensible Mark-up Language), XBRL is similar to the HTML tags that is used to define web page layouts. Rather than defining formatting options such as <title> or <font> , XBRL tags have been extended to cover common financial data elements such as <ifrs-gpAssetsHeldSale> and <ifrs-gp:CurrentTaxReceivables>.

XBRL has been around for more than a decade and was initially championed by financial analysts, who saw it as a means to automate the collection and comparison of data on company performance. This use of “interactive data” has been embraced by the US Securities and Exchange Commission, which now requires companies listed on the exchanges it regulates to file their quarterly and annual accounts using XBRL.

While conceptually simple, XBRL is complicated by the variety of data elements that can appear in financial statements, with separate data maps (or taxonomies) catering for different financial reporting regimes and company types. By way of example, the full UK IFRS taxonomy includes 3,725 separate tags; UK GAAP has 5,292. Specialist taxonomies exist for banking, extractive industry and work is underway on equivalent data dictionaries for charities and other entities.

When HMRC jumped aboard the XBRL bandwagon, its Corporation Tax taxonomy required 4,561 XBRL tags. It also ran into the thorny problem of presentation. Company law requires accountants to submit an exact copy to Companies House of the financial statements they prepared. There is no way a page of raw XML data tags could reflect the formatting and layout of those statements.

The mechanics of iXBRL CT computations and accounts
HMRC’s solution to this problem is iXBRL, a hybrid that combines the XBRL data tags with HTML formatting that make it possible to view an accurate reproduction of the accounts in a web browser. Making the format mandatory for CT accounts/computations and setting 2011 as the deadline provoked outrage from the profession and a few pained whimpers from the tax software industry, but there is no turning back.

What will be expected from companies that pay Corporation Tax from 31 March next year will be an annual CT600 return filed online, accompanied by supporting computations and accounts in the mandated iXBRL format. There are still some grey areas around what to do with additional information – the sort of explanations contained in the personal tax return’s “white space” boxes – and the current advice is to continue submitting this as PDF files, and then chase your HMRC contacts to ensure they make a note of it.

If you’d like to be a pioneer, HMRC’s CT Online portal is open for business now to accept your submissions via a PDF form that, like the Companies House mechanism for abbreviated accounts, will convert the information into iXBRL for you. The mechanism is a one-shot data entry process, based around the current Short Company Tax Return. It will accommodate most types of trading loss, but will not be suitable for companies with more complex tax affairs, nor is it recommended for those who prepare returns for multiple companies. These cases would be better handled by a commercial CT application; five systems have already passed HMRC’s submission testing and more are on their way.

 

Continued...

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Comments

Seahorse for small businesses

Cantankerous | | Permalink

Hi, 

I produce my accounts as a word document, looking at the CoreFiling Seahorse product it seems to be the simplest solution (just tagging my existing accounts) but do you know if it will be available to small businesses or will it just be offered to accounting firms. Will I need to go to an accounting firm or will I be able to us it myself?

rgds/alex

OpenYourDiary.com
Online Appointment Booking for Small Businesses

Beware of Tagging Products

Anonymous | | Permalink

Much is being said about 'minimum tagging' for a set of accounts, yet this is only a temporary state, full tagging (over 5000 items) becomes mandatory from 2013. 

Seahorse will be available to small businesses/end users

cmerritt42 | | Permalink

Yes, Seahorse will be available to end-users.

For further reading about iXBRL in general, please have a look at our
articles at blogs.corefiling.com/.

Regards
Cristen Merritt, CoreFiling.

Minimum tagging

plega | | Permalink

Don't be too frightened by that "5,000" figure. You will still be expected to tag only those concepts which appear in your accounts. For a small company, this may only amount to 200 or so items to tag.

Philip Allen

iXBRL and XBRL

Paulsoper | | Permalink

Going round to different firms, both large and small, with in-house tax updates, when they began to realise that HMRC was going to make this mandatory I found a lot of confusion and resentment.  So I dug into the details of XBRL and discovered that it is extensively used as a financial analysis tool in the states, has now been adopted by the SEC, has been used extensively in the Peoples Republic of China as well, and although it's use in accounts submission is clear from the perspective of the regulatory body, it seems that businesses have in the main adopted it as a financial tool first and then submitted using it as well.  Of course in the UK HMRC go about this the wrong way - here it is, it's going to be mandatory, so get used to it, etc etc - surely it would have made more sense to say here is a grewat financial analysis tool which you can adopt and get significant benefits from, oh, and by the way, when your're used to using it you can submit accounts using it (I believe UK Companies House has been accepting this on a voluntary basis since 2006?) and use it for tax return compliance.

More details from here (and no I don't get a commission!): http://www.xbrl.org/Home/ and http://www.xbrl.org/uk/ and then http://www.xbrlplanet.org/planet/snapshot.php?iso3166=gb&FeedID=38&gmapID=1

Using HMRC CT online filing

springacweb | | Permalink

I atempted to use HMRC's online CT filing software last month. An enormous Pdf file which caused my computer to crash. I downloaded as required the latest version of Adobe to run the software and after some four hours to complete the fields for a simple owner manged company, current year plus comparatives and all the statutory accounts notes the sytem would not file the form. I finally gave up and posted the Return, computations and accounts.  This system is unworkable.   

daveforbes's picture

Post production tagging

daveforbes | | Permalink

I think 200 tags (or 400 including comparatives) is not far off from our experience. Whether picking your those from list of 1200 or 5000 does not make that much difference.

However - I would not underestimate how time consuming post production tagging can be. If your AP software is producing ready tagged data this clearly the most efficient.  Unlike our AP software that takes a TB and produces a fully tagged set of accounts, our post production tagging software is currently only available via an offshore outsourcing operation.

Post production tagging software can be quite clever, but if it were good enough to fully automate the process it would surely remove the need for XBRL submission in the first place and we all be able to send in pdfs !

Further info on products is available from HMRC website http://www.hmrc.gov.uk/efiling/ctsoft_dev.htm

David Forbes

Forbes Computer Systems Ltd

 

 

 

De-Mystifying ???????

Anonymous | | Permalink

Call me a technological dinosaur but I came to this page following a link that said something like "XBRL de-mystified". What do I find in the third paragraph ........ "Based on XML (eXtensible Mark-up Language), XBRL is similar to the HTML tags that is used to define web page layouts. Rather than defining formatting options such as <title> or <font> , XBRL tags have been extended to cover common financial data elements such as <ifrs-gpAssetsHeldSale> and <ifrs-gp:CurrentTaxReceivables>."

Frankly if this sort of techno-babble is meant to de-mystify the subject then God help us if somebody should try to make it difficult!  

daveforbes's picture

Level of information

daveforbes | | Permalink

It would be a short article if it just said tick the "use XBRL" option in your software

Simple explanation of iXBRL

vtsoftware | | Permalink

The explanation of iXBRL at http://www.vtsoftware.co.uk/support/on-linefiling.htm is a little simpler.

Philip Hodgson

shurst's picture

Another attempt at a 'simple' explanation

shurst | | Permalink

I attempted a simple explanation over at IT Counts involving the Rolling Stones. Failing this, there's a much older explanation based on Liz Hurley's socks.

hmrc ct600 online

Anonymous | | Permalink

I tried this for a small investment company and after much time with a lengthy and difficult to navigate system filed the return with accounts and computations (that only needed a few lines). It was not possible to enter management expenses(as done in previous years) in the input screens for accounts and computations although there is a box on the ct600 and these showed as trading losses. Hmrc online(tardy and unhelpful helpdesk)did not appear to recognise the problem and advised adding a note(that needed pdf and said there was a free download for this??) and the 'local'office suggested writing in separately in the old fashioned way to mention the point. I did the latter and asked for acknowledgement that the return was accepted but do not hold much hope of a reply, at least not in the short term. Hopefully they will have improved the system by next year?

An iXBRL enabled version of VT Final Accounts will be released i

Anonymous | | Permalink

As a VT user I am very dissapointed.  March 2011 is too late. VT needs to get its act together and release the new version this year!

Otherwise it means that we have to wait for the new version of VT final accounts for all accounting year ending before March 2011, ie say Oct, Nov Dec 2009, onwards ( where CT 600 will be filed online after March 2010)  before we can prepare the accounts.

VT

Anonymous | | Permalink

Regarding my previous post.

I ment to say 'ie say Oct, Nov, Dec 2010, onwards,' not 2009.

VT

vtsoftware | | Permalink

In view of the above comments, we have brought our release date forward to December 2010.

Philip Hodgson
VT Software

Philip Hodgson-Vt software

Anonymous | | Permalink

As VT user, this is an importnat question for me.

Say we have prepared a set of accounts in October 2010. Then when VT has released the IXBRL version in December 2010, am i correct that we update our Vt software ( as we do annually when you release the latest version) and then when we go back and produce the above October 2010 accounts again, they will be IXBRl version?

Or will we have to start a new workbook form scratch in the new version of VT and input all the data again?

Its practical points like these have you need to metion on your website.

Look forward to your response?

 

 

From VT to Anonymous

vtsoftware | | Permalink

You will need to start a new workbook, or alternatively select the tag for each cell from a list (which would be very time consuming).

You can now copy all the data in one go from an old workbook to a new one using the Copy Accounts Data and Paste Accounts Data commands, so this should not be a problem. Click here for more info on this.

I must get on with writing the iXBRL code now. Bye...

Philip Hodgson
VT Software

daveforbes's picture

Sage release date

daveforbes | | Permalink

I thought Sage were planning to release the iXBRL accounts in July 2010.

http://www.xbrlwithsage.com/pdf/company_statement.pdf seems to say November 2010.

Is this a change or was I mistaken ?

You could always outsource

sandeepjohn | | Permalink

You could always outsource your work.

At DataTracks, we offer a pay-as-you-go web based service to convert your financial statements and tax computations to the iXBRL format.

Do visit www.datatracks.co.uk for more information.