CIPC iXBRL Requirements for South African Businesses
iXBRL is a globally recognized reporting language used to report Annual Financial Statements (AFS) in a standardized format. CIPC mandated iXBRL for all qualifying entities from 1 July 2018 to ensure a smooth analysis, preparation, and communication of business information to all stakeholders in a single format.
As fancy as iXBRL sounds, how does it affect South African businesses? The iXBRL mandate has revolutionized the process of financial reporting. The data becomes readily available in a clear and concise format, helping users like investors, regulators, and financial institutions perform analysis more effectively.
Objectives of CIPC iXBRL Program in South Africa:
The CIPC introduced the iXBRL program with dual objectives, which are:
- To reduce the administrative burden on South African businesses while reporting financial information to CIPC for regulatory compliance
- To provide transparency in business and financial information to investors
According to a recent article in Accountancy SA, digital tagging of financial data using XBRL generates “richer and more meaningful financial information read and interpreted by machines for data analysis, validation, and programmed decision-making with little or no human intervention required.”
Since the mandate of iXBRL in South Africa, the question that comes across repeatedly is: “Does my business needs to file AFS in iXBRL format?” Companies required to file AFS in iXBRL format fall within the following criteria:-
- If your company is a public company
- If your company’s Memorandum of Incorporation (MOI) states that the company should undergo an audit of AFS
- If your company’s Public Interest Score (PI Score) is 350 or more
- If your company, in the ordinary course of primary activities, holds assets in a fiduciary capacity for unrelated persons with an aggregated value at any time during the financial year of not more than R5 million
If your company falls in any criteria mentioned above, you need to file your AFS and annual returns in iXBRL format with CIPC. In its recent update that came into effect from 1 October 2021, CIPC developed a new Data Quality Management (DQM) framework to help both filers and regulators better evaluate the data quality based on completeness, correctness, consistency, and accuracy.
How Does iXBRL Work?
XBRL first tags each item in the financial data by allocating a unique identification tag. Once all the items are tagged, they are grouped, and the iXBRL file is generated for submission with CIPC.
- If your financial statement issuer, either in-house or external, uses specialized accounting software with an embedded XBRL conversion tool, the issuer can tag mandatory financial items without any manual effort to generate an iXBRL file for submission.
- If your financial statement issuer, either in-house or external, does not have an embedded XBRL conversion tool, the issuer needs to obtain an XBRL ready input sheet and manually tag the mandatory items on it. Once tagged, this input sheet can be generated into an iXBRL format and submitted with CIPC.
File Your AFS the Right Way, the iXBRL Way!
By mandating iXBRL, the CIPC enabled South African companies to file their financial statements in a unified format that is effective for both companies and the government. And, by having a trusted partner like DataTracks by your side, you can get error-free, compliant iXBRL files to be submitted with CIPC. With a record of 200,000+ compliant reports for 19,900+ clients, DataTracks provides high-quality, reliable iXBRL filing services.
Speak to an iXBRL expert @ +27-10-446-9061 or email at email@example.com.