What are cooperatives and what are their categories?
Before we look at the CIPC iXBRL Mandate for South African cooperatives. Let’s look at what a cooperative is. A cooperative is a group of people doing business together to meet their collective economic or social objectives. In South Africa, cooperatives are registered under and governed by the Cooperatives Amendment Act of 2013, which amends the Cooperatives Act of 2005.
Cooperatives are divided into categories A, B, and C based on their annual revenues. They are also divided as primary, secondary, tertiary, or national apex – where all other divisions apart from ‘primary’ belong to category ‘C’.
Category ‘A’ cooperatives are further subdivided as A1 and A2 – where the annual revenue of A1 cooperatives is less than R1 million and that of A2 cooperatives is at least R1 million but less than R10 million. Category ‘B’ cooperatives have annual revenue of at least R10 million but less than R25 million. Category ‘C’ cooperatives have annual revenue of R25 million or more.
Primary, Secondary, Tertiary, And National Apex Cooperatives
In order to be registered as a Primary Cooperative, a cooperative must comprise either five natural persons, two juristic persons, or a combination of any five persons. A Secondary Cooperative, on the other hand, needs to comprise two or more operational primary cooperatives.
The meaning of ‘operational’, in this context, would mean that a cooperative has held an annual general meeting and submitted an audited or independently reviewed annual report to the registrar in a financial year.
A Tertiary Cooperative must comprise two or more operational secondary cooperatives.
Finally, a National Apex cooperative needs to have three operational sectoral tertiary cooperatives that operate on a national level and five operational multi-sectoral tertiary cooperatives that operate on a provincial, district, or local level. An operational secondary co-operative may join the apex in case there is no sectoral or multi-sectoral tertiary that can represent the secondary cooperatives.
What Is The CIPC iXBRL Mandate For Cooperatives All About?
Starting April 2022, the Companies and Intellectual Property Commission (CIPC) requires cooperatives that are audited, namely those in category C, to submit their annual financial statements (AFS) in the Inline XBRL format. Companies whose AFS are independently reviewed – category B cooperatives – have the option of submitting the statement in iXBRL. However, compliance with the mandate is not compulsory for category B cooperatives. As mentioned earlier, category C cooperatives include secondary, tertiary, and national apex cooperatives.
Cooperatives also need to pay a fee in order to file their annual reports to the CIPC.
- Cooperatives in categories A1 and A2 need to pay R50 if they submit their annual returns within 30 days of the due date and R100 if they submit them more than 30 days after the due date
- Category B cooperatives need to pay R450 if their submission is within 30 days of the due date and R600 if it is filed more than 30 days after the due date
- Category C cooperatives will have to pay R3000 if their submission is within 30 days of the due date and R4000 if it is filed more than 30 days after the due date
- For Secondary, Tertiary, and National Apex cooperatives with revenues less than R25 million, the fee is R450 if the submission is made within 30 days of the due date and R600 if it is filed more than 30 days after the due date
- For Secondary, Tertiary, and National Apex cooperatives with revenues more than R25 million or more, the fee is R3000 if their annual return submission is within 30 days of the due date and R4000 if it is more than 30 days after the due date
Moving on to a brief history of the CIPC iXBRL Mandate.
The CIPC iXBRL Mandate So Far
The CIPC iXBRL mandate was introduced in July 2018. A year later, the regulator kicked in Phase 2 of the mandate which was focused on better enforcement and updating the reference taxonomy.
While the first phase of iXBRL implementation was based on the IFRS 2016 taxonomy, the second phase included 2017, 2018, and 2019 updates to the taxonomy. Thereafter, the CIPC has been regular with its XBRL taxonomy updates – the latest one being the 2021 update.
In October 2020, the CIPC included the Generally Recognized Account Practice (GRAP) standards within its XBRL taxonomy. South African state-owned use the GRAP standards, issued by the Accounting Standards Board (ASB), to prepare their financial statements. Accordingly, the CIPC allowed the state-owned entities to voluntarily file their AFS using the new XBRL taxonomy until September 2021. Thereafter, filing in the iXBRL format became mandatory for these entities.
In the first half of 2021, the CIPC developed a Data Quality Management (DQM) framework with the aim of improving the quality of financial data. The Inline XBRL filings facilitated by software service providers (SSPs) will be evaluated for their Completeness, Correctness, Accuracy, and Consistency on a quarterly basis using a set of specific metrics under the DQM.
CIPC iXBRL Mandate Compliance For The Cooperatives
Cooperatives under the scope of the latest CIPC iXBRL mandate will need software that facilitates the conversion of a PDF AFS into the required format. The right kind of software is one that facilitates a smooth conversion into an error-free and high-quality iXBRL report that meets CIPC specifications. What software would serve the purpose better than one that the CIPC itself trusts?
IRIS is CIPC’s Trusted Technology Provider for iXBRL
IRIS CARBON® – a SaaS disclosure management and XBRL | iXBRL reporting solution – comes to you from the creators of the CIPC’s report collection system – IRIS iFile. IRIS CARBON® has an XBRL validator called IRIS Bushchat® integrated. The validator helps ensure that your reports are free from XBRL errors and meet CIPC iXBRL mandate specifications. In fact, the CIPC also uses IRIS Bushchat® at its end.