Some cool facts about XBRL

1.      No certification of software vendors - There is no guidance available for end users of the software offerings, or, on how to select a particular software.¨ As on date, there are 27 software vendors listed on MCA’s website (http://www.mca.gov.in/XBRL/software_vendor.html) and MCA has categorically mentioned that MCA does not certify or authenticate the validity of the software/services offered by any of these vendors. This list is only for awareness of stakeholders for their XBRL initiative.

2.     Huge variation in prices -       (a)   Similarly, conversion fees range from Rs. 9,000 per company to Rs. 45,000 per company and Rs. 300 per page to Rs. 3,000 per page. XBRL software prices range from Rs. 5,400 to Rs. 400,000. There is a huge variation in the prices of XBRL software and XBRL conversion services. This price variation is not just on the MCA listed software and services - the variation among non-listed vendors and service providers is even larger.

    (b)  Similarly, conversion fees range from Rs. 9,000 per company to Rs. 45,000 per company and Rs. 300 per page to Rs. 3,000 per page. XBRL software prices range from Rs. 5,400 to Rs. 400,000. There is a huge variation in the prices of XBRL software and XBRL conversion services. This price variation is not just on the MCA listed software and services - the variation among non-listed vendors and service providers is even larger.

3.           Preparedness: After implementing XBRL by Circular dated 31.03.2011 (http://www.mca.gov.in/XBRL/pdf/xbrl_31mar2011.pdf), by the middle of Oct’11, the Financial Statements of only 9 companies were filed in XBRL format, which shows the state of preparedness of service providers/companies awareness in this domain. (Source: an article in Economic Times, click here to access the article ). In the absence of any accreditation or certification by a responsible authority, most service providers claim to have been working in the XBRL space even before the introduction of XBRL regulation by MCA in March’11 which, barring a few service providers is dubious, creates where to go position.

4.           Lack of awareness among companies Companies (even renowned business houses) are deciding on XBRL service providers on just the basis of lowest fee without enquiring about basic information about a service provider, i.e., team size, experience, etc. There is a large gap in understanding about XBRL, its concept and implications among the companies who are required to file financial statements in XBRL format.

5.           XBRL conversion is a specialized service for which experience in handling of Financial Statements across various Industries is a basic requirement. Secondly, familiarity with mandatory business rules of taxonomy is a pre-requisite to effectively handle the errors during validation phase. People have misunderstood the role of software in the XBRL conversion process at this initial stage in India. Software is just an enabler; nothing more than that.