South Africa has moved from a paper-based reporting system to a structured data reporting format with Inline XBRL (iXBRL). Effective 1st July 2018, the CIPC mandated that qualifying entities file their Annual Financial Statements (AFS) in a new format named Inline XBRL (iXBRL). This new format replaces the need to file a PDF document with the CIPC. iXBRL will simplify reporting financial information electronically for companies. Here we answer all your burning questions with regard to the CIPC iXBRL Mandate.
Inline XBRL (iXBRL) specification has been made readable for both humans and machines.
What is XBRL and iXBRL?
XBRL (eXtensible Business Reporting Language) is a freely available global standard for exchanging business information that is machine-readable. XBRL can be interpreted only by machines. An XBRL instance document is composed of XML files that require a rendering engine or an XBRL instance viewer to interpret and present the data in a human-readable format. For more information, you may read our blog Why do I need to file in XBRL?
The Inline XBRL (iXBRL) specification on the other hand has been made readable for both humans and machines. The basic idea of developing iXBRL is to allow preparers to retain the original view or formatting of the source document while creating an XBRL document. The XHTML representation of the information is what aids the document to be human-readable.
The benefits of iXBRL for the filer are plenty.
Why has the reporting format changed?
The CIPC has been receiving annual reports from 1.8 million entities every year in PDF format. This humungous volume of information can neither be easily accessed nor analyzed in a timely manner to detect any early signs of inconsistencies, fraud, or mistakes in the annual report. It was important for the CIPC to implement structured data reporting in South Africa to enable easier access and analysis of data.
The benefits of iXBRL for the filer are plenty.
If you are yet to get started with the new CIPC iXBRL mandate, the first thing to check is your PI score.
Who needs to file with the CIPC?
The following entities who have been filing with the CIPC in PDF format now need to file in the Inline XBRL format.
- All public companies;
- Private companies (qualifying and currently submitting using PDF);
- State-Owned companies;
- Non-Profit entities;
- Closed Corporations (qualifying and currently submitting using PDF)
Apart from this, entities would need to check their Public Interest score to confirm if they need to file with the CIPC. If you are yet to get started with the new CIPC mandate, the first thing to check is your PI score. Use our simple and easy-to-use PI score calculator to determine your eligibility to comply with this mandate.
There are 46 mandatory elements in the CIPC iXBRL taxonomy that companies will need to report.
What is the scope of Tagging?
Companies are required to tag all disclosures in the annual report for which there is an appropriate element in the CIPC iXBRL taxonomy. Primary Financial Statements, Auditor’s reports, Director’s reports, and notes to accounts are some examples for which iXBRL tagging is needed. Also to note is that there are 46 mandatory elements in the CIPC iXBRL taxonomy that companies will need to disclose information.
As per the CIPC mandate, both the Group Company and its subsidiaries will have to individually file.
What is the right approach to iXBRL Tagging- On-Document Tagging or Template Based?
iXBRL requires tagging to be done on the annual report, in this way the readers can see the layout of the annual report and also the XBRL tagged data. This approach is called ‘On-document tagging’, which makes the entire document not only highly machine-friendly but also readable by humans, thus making it more understandable and meaningful.
There are several players in the market who claim to provide iXBRL- however, they do not use the ‘On-document tagging approach, instead use a ‘Template-based Tagging’ approach, where the user manually keys-in data for the whole document.
If you are using a Template Based tagging methodology, you are NOT fully complying with the iXBRL reporting requirements. Read more about On-Document and Template Tagging for CIPC.
If you are using a Template Based tagging methodology, you are NOT fully complying with the CIPC iXBRL reporting requirements.
If I own a Group Company that has many subsidiaries, should the filing be for just the Group Company or should each subsidiary company also file?
As per the CIPC mandate, both the Group Company and its subsidiaries will have to individually file in the iXBRL format based on certain criteria. To know if you are required to file with the CIPC, check your eligibility criteria.
All companies are required to submit their AFS 30 business days from the date of incorporation.
When to file my AFS?
All companies are required to submit their AFS 30 business days from the date of incorporation. However, Closed Corporations are allowed 60 days for the submission of the CIPC iXBRL documents. For more information, read our blog When should I file my AFS with the CIPC?
The CIPC deployed the “AR-Hard Stop” directive on September 1st, 2018
What do I file first- Annual Return or iXBRL?
All qualifying entities are required to file an iXBRL document ahead of filing the annual Returns (AR).
The CIPC deployed the “AR Hard-Stop” directive on September 1st, 2018 as there were instances when entities filed their AR without filing the AFS in iXBRL format. This prevents the submission of the AR unless either a valid set of AFS or Financial Accountability Supplements (FASs) is submitted.
Once you prepare the final iXBRL document, the XHTML file can be uploaded on the CIPCs portal.
How do I go about preparing CIPC iXBRL reports?
- Following are the two ways to approach the iXBRL creation process. Learn the standard and take the process in-house
- Outsource it to an XBRL service provider
Based on our experience serving several markets worldwide, entities who initially adopt XBRL as a standard choice outsource it to an XBRL service provider. Once filers get familiar with the reporting process, they prefer to take it in-house. Once you prepare the final iXBRL document, the XHTML file can be uploaded to the CIPCs portal.
Work with teams on a single source, cloud-based platform without worrying about losing track and accountability.
How do I choose the right CIPC iXBRL Solution Provider?
Finding the right CIPC iXBRL solution provider could take some time, but we recommend that you research well before choosing rather than burning your fingers or falling into the wrong books of the CIPC. We have made things easy for you with our 6-point checklist using which you can choose the right CIPC iXBRL solution provider.