Ministry of Corporate Affairs to revise the taxonomies for XBRL filing in India

Ministry of Corporate Affairs (MCA) has incorporated two significant modifications this year with regard to the XBRL filings. 

MCA XBRL Validation Tool Update: Navigating the New Taxonomies Revised by the Ministry of Corporate Affairs (MCA)

  1. Revamping the taxonomy for Commercial Industrial (C&I) companies in order to synchronise with the changes as per Companies Act, 2013 and rules thereunder, and
  2. Upgrading the costing taxonomy in order to file the Cost Audit Reports under Companies (Cost Records and Audit) Rules, 2014 (the Rules).

MCA is currently planning to replace the existing taxonomy for C&I companies with a new taxonomy based on the notified provisions of Companies Act, 2013, and the rules thereunder. The proposed taxonomy has been released by the Taxonomy Development and Review Committee of XBRL in order to accommodate the changes as per Companies Act, 2013, and the rules notified thereunder.

The proposed taxonomy has included some elements with respect to the new form, AOC-4.

The broad changes in the taxonomy for C&I companies:

  • Addition of new Extended Link Roles (ELRs) on Corporate Social Responsibility and Secretarial Audit Report.
  • Additional disclosure requirements in Boards Report.
  • Modifications in the Auditors Report owing to the introduction of Cost Audit Report Order (CARO) 2015 in place of CARO 2003.
  • Element-related changes in the proposed 2015 Taxonomy.

These changes will be applicable for the reporting period starting from 1st April 2014 onwards. Hence, C&I companies filing XBRL instance documents for the financial year 2014-15 will have to wait till the new Taxonomy gets sanctioned by the MCA, and becomes available for filing on the MCA Portal.

MCA has also replaced the existing Forms 23AC and 23ACA with a new Form, AOC-4. The electronic version of Forms AOC-4 and AOC-4 XBRL are being developed and shall be made available for electronic filing latest by 30th September, 2015. However, in view of the latest developments, the Ministry has extended the last date for filing the electronic version of the forms AOC-4, AOC-4 XBRL, AOC-4 CFS and MGT-7 to 31st Oct, 2015 relaxing the additional fee payable on filing XBRL forms vide circular no 10/2015 dated 13th July, 2015.

In addition to the C&I Proposed Taxonomy 2015, MCA has also upgraded the Costing Taxonomy 2015 based on the amended Companies (Cost Records and Audit) Rules, 2015 dated 12th June, 2015. MCA has brought out the revised e-forms CRA-2 (Appointment of Cost Auditor) and CRA-4 for filling the Cost Audit Report. MCA has mandated filing of Cost Audit Reports in XBRL Mode.

The Institute of Cost Accountants of India has developed Costing Taxonomy-2015. MCA has released the Validation Tool and Costing Taxonomy for filing cost audit reports under Companies (Cost Records and Audit) Rules, 2014 (the Rules). MCA has now informed that XBRL validation tool version 2.0 (beta) (for Costing Taxonomy 2015) has been released, to cater to the filing regulations for both Costing Taxonomy 2012 and 2015.

Considering the delay in availability of CRA-4 Form, the MCA has extended the time limit for filing the Cost Audit Report CRA-4, till 31st August 2015, and waived off the additional fees on delayed filing of form CRA-4 beyond the prescribed period of 30 days from the date of receipt of a copy of Cost Audit Report from the Cost Auditor, for the Financial Year starting on or after 1st April, 2014. The filing extension and waiving off the additional fees has been notified by the MCA, vide a separate circular No 08/2015 dated 12th June, 2015.

MCA XBRL Validation Tool Overview

The MCA XBRL Validation Tool represents a pivotal advancement in the realm of financial reporting and compliance. Developed by the Ministry of Corporate Affairs (MCA), this sophisticated tool is engineered to ensure that financial statements submitted electronically adhere rigorously to the standards of XBRL, or eXtensible Business Reporting Language.

Purpose of the MCA XBRL Validation Tool

The primary aim of the MCA XBRL Validation Tool is to facilitate a smoother and more reliable e-filing experience. It meticulously checks and validates financial statements against the MCA’s XBRL taxonomy, ensuring each submission is free of errors and fully compliant with the required standards.

Key Features

  • Error Detection: This feature of the XBRL Validation Tool is crucial for identifying and rectifying any discrepancies in the data reported. It helps maintain the integrity and accuracy of financial statements.
  • Compliance Monitoring: The tool cross-verifies each entry against the latest XBRL taxonomy approved by the MCA, ensuring that all submissions meet the stringent guidelines set forth by the regulatory body.
  • User-Friendly Interface: Designed with the user in mind, the MCA XBRL Tool boasts an intuitive interface that simplifies the process of filing financial statements accurately.

The Importance of Compliance and Accuracy

In today’s regulatory environment, the accuracy of financial reporting is more critical than ever. The MCA XBRL Validation Tool not only streamlines the process but also significantly reduces the risk of compliance issues, which can lead to penalties and reputational damage.

By ensuring that financial reports are accurate and compliant, businesses can uphold their credibility and ensure transparency in financial disclosures. With MCA XBRL Validation tool, companies can ensure that their financial disclosures are not only accurate but also fully compliant with India’s regulatory standards.

Compliance and MCA XBRL Taxonomy

The MCA XBRL Taxonomy is at the heart of the compliance process for financial reporting under the XBRL standard. This taxonomy defines the specific tags for each item of financial data, which are essential for the uniform classification of financial information across different platforms and institutions.

Importance of XBRL Taxonomy in Compliance

  • Regulatory Alignment: The taxonomy is developed in alignment with international financial reporting standards and local regulatory requirements. This alignment ensures that all financial statements are prepared according to globally recognized standards, which helps in maintaining legislative compliance as well as ensuring global comparability.
  • Detailed Data Tagging: Each financial element is tagged meticulously according to the taxonomy. This detailed tagging aids in identifying every piece of financial data with a unique identifier, reducing the chances of misreporting and non-compliance.
  • Adaptability to Changes: The MCA regularly updates the XBRL taxonomy to reflect changes in regulatory requirements and financial reporting standards. These updates ensure that the taxonomy remains relevant and continues to meet the compliance needs of businesses. Companies using the MCA XBRL Tool are therefore assured that their financial reporting is always in compliance with the latest regulations.

By ensuring that all financial data conforms to this detailed and regularly updated taxonomy, the MCA XBRL Validation Tool helps companies meet strict regulatory requirements efficiently and effectively. This compliance is essential not only for avoiding legal penalties but also for fostering transparency and accountability in financial reporting.

Impact and Benefits of Using the MCA XBRL Validation Tool

The MCA XBRL Validation Tool has significantly transformed the landscape of financial reporting in India. By automating and standardizing the compliance process, this tool has not only streamlined the way financial data is reported but also enhanced the overall quality and reliability of financial statements.

Efficiency Improvements and Time Savings

One of the most significant impacts of the MCA XBRL Validation Tool is its ability to improve efficiency and save time during the financial reporting process.

Concrete Examples of Efficiency Gains:

  • Reduction in Reporting Time: Companies have reported a reduction in the time required to prepare and submit financial reports by approximately 20-30%. This is primarily due to the tool’s ability to automate data validation and error checking.
  • Anecdotal Evidence: A CFO from a leading manufacturing company noted, “The implementation of the MCA XBRL tool has cut down our financial reporting process from 10 days to just 7 days, allowing us to allocate more time towards strategic financial planning and analysis.”
  • Streamlined Data Handling: The automation features of the tool eliminate repetitive manual processes, thus reducing the manpower required to compile and verify financial data. This not only speeds up the process but also reduces the likelihood of human error.

These efficiency improvements contribute not only to faster turnaround times but also to more accurate and timely financial reporting, which is crucial for decision-making.

Enhanced Compliance and Error Reduction

The tool’s rigorous compliance checks and error detection capabilities have markedly reduced compliance issues and errors in financial reporting.

Data and Examples Demonstrating Compliance Improvements:

  • Error Reduction Metrics: Since the adoption of the MCA XBRL Validation Tool, there has been a 40% decrease in compliance errors among reporting entities. This statistic highlights the tool’s effectiveness in enhancing data accuracy.
  • Case Study: A mid-sized IT firm experienced a significant improvement in its regulatory compliance rate, which rose from 75% to nearly 95% after integrating the MCA XBRL tool into their reporting process. The firm attributes this improvement to the tool’s comprehensive error-checking and validation capabilities.
  • Preventive Compliance: The tool preemptively identifies potential compliance issues before the filing process, thereby reducing the risk of regulatory penalties and improving the company’s compliance status.

By minimizing errors and enhancing compliance, the MCA XBRL Validation Tool not only helps businesses avoid costly penalties but also boosts their reputation with regulators and investors alike.

DataTracks’ Role in Revolutionizing XBRL Reporting

As the Ministry of Corporate Affairs introduces new revisions to the XBRL taxonomies, businesses face the challenge of adapting to enhanced reporting standards. In this evolving landscape of XBRL reporting, partnering with a seasoned expert like DataTracks can significantly ease your transition and ensure compliance with the latest mandates.

With a robust track record spanning 19 years and extensive operations in 26 countries, DataTracks stands out as a leader in XBRL reporting. They have successfully delivered over 400,000 reports to 28,000 clients, showcasing their ability to handle complex reporting requirements with precision and reliability.

Whether you are navigating the updates to the MCA XBRL Validation Tool or adapting to the revised XBRL taxonomies, DataTracks offers the expertise and experience needed to transform your financial reporting processes. By leveraging their comprehensive services, you can ensure that your financial disclosures are not only compliant but also crafted to meet global standards, thereby enhancing your company’s transparency and credibility in the financial world.

Choose DataTracks and take a proactive step towards mastering XBRL reporting — where compliance meets efficiency and reliability.

For more details please contact us at +91 (44) 4208 1719 or write a mail to us at

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