SETTING THE SCENE Dr Paul Booth Technical & Development Manager, IT Faculty
The story so far • XBRL is all about tagging • … but the tags are electronic • A bit like a bar code • … for financial reporting concepts
A bit like a bar code … • But instead of tagging a tin of beans • … we’re tagging an item in a set of accounts
But what’s this ‘i’? • iXBRL = Inline eXtensible Business Reporting Language • It’s still XBRL – same tags etc • … but the ‘i’ bit means that human eyes can read it too
Lots of applications of XBRL • … but it’s HMRC’s impending requirement that is concentrating minds. • CT filings submitted after 31 March 2011 for year-ends after 31 March 2010 must be done online, using iXBRL for • Accounts • Computations • Today we’re focusing mainly on the accounts. The tax computations bit is relatively straightforward.
How do we make the iXBRL? • Wide range of methods • But many software products not yet publicly available • … in some cases, even though they are ‘recognised’ by HMRC • Which method is best depends on circumstances: who you are, what you do, existing methodology, business priorities, etc.
Year-end Accounts Production and Filing Bookkeeping Year-endaccounts Filing
Some scenarios … … but they come with a health warning I’m not necessarily describing anyone who’s here … and not pretending to be comprehensive The ‘best’ solution for your practice/business could depend on many factors
Scenario 1: just one simple filing • One single, simple business. Just one filing per year. (Or possibly a practice with a very small number of client filings.) Possible solution: HMRC’s free product Likely • Does the whole filing: accounts, comps, CT600 • But it’s limited: suitable only for ‘smaller companies … with less complex tax affairs • A bit slow and clunky.
HMRC’s free product Type into a form iXBRL filing Incl.CT600 and comps Bookkeeping Year-endaccounts Filing
Scenario 2: already using AP software • Practice doing filings for several clients and using established accounts production software product. Possible solution: Use your AP supplier’s iXBRL-enabled product Likely • For many sets of accounts, could be as simple as clicking the new ‘iXBRL output’ button. • But make sure your supplier is releasing an upgrade, and on time. • Accounts that depart from standard template may need extra work.
Accounts Production Software …and iXBRL file Bookkeeping Year-endaccounts Filing Software adds XBRL tags + other adjustments and inputs
Scenario 3: currently use Word/Excel • Practice with several clients, or business with several subsidiaries – multiple filings to do Possible solution (a): get iXBRL-enabled AP software Likely • May be more efficient in the long term • But significant change to existing processes
Scenario 3: currently use Word/Excel • Practice with several clients, or business with several subsidiaries – multiple filings to do Possible solution (b): use post-production converter/tagger or outsourced iXBRL service Likely • No disruption to your existing processes • But you have an extra task at the end of those processes • … or you have an extra expense and supplier to manage
Post-production tagging …and outputs iXBRL file Bookkeeping Year-endaccounts Filing Software adds XBRL tags
Scenario 4: currently do both book-keeping and accounts prep/tax filing • … whether in business or in practice Possible solution: use ‘end-to-end’ software that does it all, or two closely integrated products Likely • Probably the greatest potential efficiency gains • But probably the biggest disruption to existing processes
‘End to end’ software …and outputs iXBRL file Bookkeeping Year-endaccounts Filing Single software product does both bookkeeping and AP
Scenario 5: currently do tax filings but not final accounts preparation • … taking the final accounts as a ‘given’, from the client or from client’s other adviser Possible solutions (a) get A N Other to supply an iXBRL file; (b) get them to supply a Word file and use post-production converter or outsource Likely • Not necessarily your problem • Make sure you are given the correct accounts
HMRC say ‘sympathetic approach’ to penalties in first two years Reasonable Excuse Reasonable Care In the first two years, we can use a smaller ‘dictionary’ of tags Not everything in accounts will need to be tagged. The ‘soft landing’
Don’t panic! Further information available • XBRL page: www.icaew.com/xbrl • HMRC’s ‘recognised’ list: www.hmrc.gov.uk/efiling/ctsoft_dev.htm • Implementing XBRL publication soon on www.ion.icaew.com/itcounts Paul Booth IT Faculty 020 7920 8476 firstname.lastname@example.org