CIPC implements XBRL – Accounting Labs
XBRL is a technology standard that enables the implementation of Digital Financial Reporting.
XBRL revolutionizes the way reporting entities submit Annual Financial Statements (AFSs) to the CIPC. The CIPC is the central government agency in South Africa. They are responsible for both registration and regulation of companies and close corporations. The scope of XBRL reporting applies to a sub-set of around 100 000 qualifying entities.
XBRL is gaining momentum worldwide as a best practice standard for electronic data exchange amongst organizations.
According to CIPC the following reasons lead to the adoption of XBRL:
- Improved efficiency for dealing with high volumes of reports. Manual analysis of large numbers of AFS’s will be replaced with automated analysis and validation of reporting criteria.
- Improved regulatory effectiveness. Business Intelligence (BI) technology used for analysis on consolidated statements per industry will only replace the limitations of manual sample analysis on individual statements. Therefore XBRL enables improved high-level understanding of business in South Africa.
- By implementing XBRL the CIPC hopes to pioneer the eventual roll-out of Standard Business Reporting (SBR) in South Africa. Various regulators will then be able to share data. The principle of “report-once-share-many” will eliminate the need for businesses to report different formats of financial statements to multiple regulators.
- Sharing data with other government agencies can be used for economic policy formulation. The economy as a whole can therefore be impacted in a positive way. Potential data sharing with private investment companies can also assist with better investment advice and decision making.
Every reporting entity will be required to have XBRL capable software in place for compiling of AFS data in XBRL format.
The CIPC has established a Software Service Provider (SSP) to assist client entities with their selection of software solutions to facilitate interfacing with the CIPC. A number of SSPs have been assessed in terms of their software solutions and services they offer to reporting entities.
A list of recommended SSPs has been published on the CIPCs website. Reporting entities are encouraged to engage with the recommended SSPs for provisioning of client-side solutions. Client entities are under no obligation to use software and services provided by panel members. However the panel members recommend use as they demonstrate adherence to the minimum technical requirements of the CIPC.
The CIPC selected and notified around 100 large JSE listed companies to be part of a pilot test phase starting in February 2018.
The purpose of pilot testing is to test functionality of the CIPCs portal. The CIPC published a list of pilot companies on the website. Companies not part of the official list, are welcome to participate on a voluntary basis.
All qualifying entities will be required to submit their latest approved/audited statements from 1 July 2018. The anniversary date of a incorporation determines the first date for XBRL submissions. The calculation of the first date of submission of a particular entity is different for close corporations and companies. The CIPC website has published the exact regulations that apply to each entity.
The Accounting Lab is now an authorized reseller of the XBRL software.
We pride ourselves in staying up to date with what is happening in the financial world. We can now assist companies with the conversion of data and software license requirements. XBRL will make it easier for Companies to report their financial information in an electronic format. The Commission has mandated submission of AFSs for qualifying reporting entities via XBRL as from 1 July 2018 and a notice in this regard has been published on the CIPC website.
The CIPC website provides more information under the “XBRL Programme” menu.
These documents include clarification on:
- The entities required to comply to the XBRL mechanism of submission.
- The exact reporting requirements in terms of statements, disclosures, mandatory data elements and validation rules.
- Technical requirements.