Why should you file in iXBRL format?
Why is iXBRL the format in which CIPC require financial statements as part of AFS filing?
CIPC - an early adopter of iXBRL technology
South Africa is one of the first countries on the continent to adopt eXtensible Business Reporting Language (XBRL) for qualifying reporting entities submitting their annual financial statements (AFS) to the Companies and Intellectual Property Commission of South Africa (CIPC).
The CIPC have estimated that approximately 100,000 companies will be required to submit their AFS in the XBRL format from 1 July 2018. Noncompliance could be extremely costly. Companies that fail to prepare their annual financial statements within 6 months of year-end can face penalty upto 10% of annual revenue.
The progress in implementing iXBRL in South Africa
Historically the Companies and Intellectual Property Commission (“CIPC”) accepted the latest approved annual financial statements in PDF format via email or uploaded to their website and manually analysed them. This process was extremely slow and prone to errors. Effective from 1 July 2018, CIPC has mandated that the Annual Financial Statements (“AFS”) be reported in iXBRL (inline eXtended Business Reporting Language) format which must accompany the Annual Returns of a company. XBRL will allow CIPC to obtain data that can be automatically entered into systems without the need to re-key, re-format or introduce other "translation" efforts.
Advantages of reporting in iXBRL format
The ease of doing business and particularly reducing the regulatory burden for businesses received a boost with the iXBRL reporting. Essentially, XBRL will lead to a dramatic reduction in costs by automating routine tasks; the quick and automatic identification of problems with filings; the analysis and comparing of data much more quickly, efficiently and reliably; and the monitoring of data and activities, allowing for judgements to be reached with far greater speed and confidence.
Advantages for the regulator
The new reporting system will allow the CIPC to determine industry trends and gain a high-level understanding of business in South Africa. By identifying various trends, CIPC will be able to pinpoint issues relating to the financial soundness of individual operations. CIPC will also be able to compare companies with companies and industries with industries over different periods.
Advantages for the user and consumer
The information gleaned via XBRL will be useful to private investment companies, giving them greater insight in where to invest. It could also help flag accounting irregularities and corporate fraud, potentially saving the country millions of rands and safeguarding jobs.
For more information about the mandatory disclosures required by CIPC, the iXBRL report preparers in business or accountants who prepare the iXBRL reports on behalf of their business clients can refer to to the link CIPC iXBRL Programme