XBRL (eXtensible Business Reporting Language) is an internationally established, flexible, Web-based computer language for the electronic transmission of business reports with focus on financial reports. It allows companies to generate their financial reports in a structured and in machine-readable form for efficient comparison across the industry. In India the Ministry of Corporate Affairs (MCA) has made it compulsory for certain classes of companies to file the annual financial statements in XBRL to improve the quality of financial reporting.

The XBRL classification used here consists of the following entities, which are required to file their financial statements, statements of profit and loss and eForm AOC-4 in XBRL format with the Registrar of Companies (ROC):

• All public listed companies on Indian stock exchanges, including their Indian subsidiaries.

• Organizations with an annual turnover of Rs. 100 crore or above. 

• Companies with capital not less than Rs. 5 million;

• Business enterprises that needed to present financial statements under the Companies (Indian Accounting Standards) Rules, 2015.

The following companies are exempt from filing their financial statements in XBRL format with the ROC:

• Other NBFC namelyfalse

• Housing finance companies

• Businesses that are in the process of offering insurance as well as in banking.

Note: The Companies that have filed their Financial Statements in XBRL format with the ROC under section 137 of the Companies Act, 2013 shall continue to file their Statements, AOC-4 and such other documents in XBRL format notwithstanding the above provisions of this rule, if they are not falling within the above stated categories.

XBRL filing offers several advantages for analysis and business reporting, including:

• Automated data collection

• True information

• Saves the amount of time spent in reporting of the information

• Enhances data analysis

• Improves reporting quality

• Ensures data security

• Cost-effective solution

• It helps to support better decisions making

XBRL taxonomy consists of simple XBRL properties, data definitions and links between the concepts.Taxonomies can represent hundreds or thousands of business reporting concepts, along with their mathematical and definitional relationships. They also provide text labels in various languages.

Companies must use the taxonomy provided by regulators to map their financial reports and generate a valid XBRL instance document. This mapping involves matching the company’s reported financial data to the appropriate elements in the taxonomy. Additional information like the reporting period, unit of measurement, and reporting scale must also be included when assigning XBRL tags in the instance document.

An XBRL instance document is an electronic business report created following XBRL rules. It contains facts defined by taxonomy elements, with explanations and values based on the context in which they are used. The instance document is linked to at least one taxonomy, which defines labels, contexts, and references.

In 2012, the MCA mandated that companies and cost auditors must file cost audit reports and compliance reports in XBRL format starting from the financial year 2011-12, based on the XBRL taxonomy. 

If the activities or products of a company fall under the Cost (Accounting Records) Rules, 2011 and are included in the cost audit, a separate compliance report is not needed. However, the corporations, which meet the thresholds prescribed under the Cost (Accounting Records) Rules, 2011 are required to prepare the compliance report in XBRL format.

The compliance report has to be certified by a member of the Institute of Cost Accountants of India practicing full-time with the company or may be practicing in his independent capacity holding a full-time Certificate of Practice. The cost auditor is responsible for digitally signing and filing the company's cost audit report.

While it is the company’s duty to prepare the cost audit report in XBRL format and get it certified by the cost auditor and approved by the Board, the cost auditor is responsible for filing the report in XBRL format with the Central Government. The cost auditor must also ensure that all data and information in the XBRL document are accurate.

When filing mgt-7 form AOC-4 XBRL, the following documents must be attached:

• Consolidated Profit and Loss Account

• Consolidated Balance Sheet

• Consolidated Cash Flow Statement

• Schedules which are Profits and Loss Account and Balance sheet.

• Consolidated Statement of subsidiaries being part of Annual Accounts as per section 129 of Companies Act, 2013

• Consolidated Directors’ Report

• Consolidated Auditors’ Report & Consolidated Accounts

• Consolidated Income and Expenditure Account

• Details of Comments from the Comptroller and Auditor General (CAG) of India

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