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SUBMITTING YOUR AFS TO CIPC IN AN XBRL COMPLIANT FORMAT

The Companies and Intellectual Property Commission (“CIPC”) will introduce digital financial reporting via the internationally acknowledged best-practise technology standard of XBRL on 1 July 2018. This new reporting methodology is a new and innovative way of lodging the financial statements which must accompany the Annual Returns of a company.

What is XBRL?

XBRL is an Extensible Business Reporting Language, which is a technology language for the electronic communication of business or financial information and the internet. XBRL provides an identifying tag for each individual item of data or information, such as company net profit or net current assets, and each unique tag is understandable to computers. These tags are then grouped together into a collection of financial and business reporting terms known as a ‘taxonomy’. XBRL is also “extensible”, which means that the terms available for use can be customized so that companies using XBRL can create their own elements (called “extensions”) to describe a unique reporting situation, for example, taxonomies can be created for the JSE Listings Requirements, which are reporting requirements specific to South Africa.

In lay-man’s terms, XBRL can be described as a change from film photography to digital photography, paper books to digital books.

XBRL will not change what is reported, only how it is reported. The CIPC has a legislative mandate from the Companies Act, 2008 to establish a system, which may use any means of electronic communication, to facilitate the filing of information required by that Act to review such information with the objective of monitoring compliance with that Act. Using this system, the CIPC also aims to create a platform that would enable information exchange amongst regulators in South Africa (and ultimately reduce the burden of multiple submissions to different regulators).

Who must submit in XBRL format?

The initial implementation phase, which is due to start on 1 July 2018, requires the following types of companies to submit their financial statements in an XBRL format:

  • Public listed companies;
  • State owned companies;
  • Private companies with a Public Interest Score of 350 or more; and
  • Companies whose Memorandum of Incorporation (MOI) requires the auditing of their financial statements.

After this first phase all companies with a Public Interest Score of over 100 will also be required to submit their financial statements in the XBRL format however this date is still to be determined.

How to obtain XBRL format

Data can be transformed into XBRL by suitable mapping tools or it can be generated in XBRL by appropriate software that can be purchased.

Benefits of XBRL

Computers can recognise the information in an XBRL document, select it, analyse it, store it, exchange it with other computers, and present it automatically in a variety of ways for users. This reduces the often laborious and costly exercise of manual re-entry and comparison. Further, XBRL reduces the possibilities of error and permits the automatic checking of information.

Consumers of financial data such as investors, analysts, financial institutions and regulators, can receive, find, compare and analyse data much more rapidly and efficiently if it is in XBRL format. Companies can use XBRL to save costs and streamline their processes for collecting and reporting financial information.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

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