Looking Back at the CIPC iXBRL format Mandate
On 1st July 2018, the Companies and Intellectual Property Commission in South Africa mandated preparing and filing Annual Financial Statements (AFS) in an Inline eXtensible Business Reporting Language (iXBRL). The transition from a PDF form to an iXBRL format aimed to simplify and standardize the financial reporting system for South African companies.
It is safe to say that with the help of digital reporting in the form of iXBRL format, businesses can prepare, analyze, and compare their annual financial statements better. Following is a refresher on everything you need to know about the iXBRL mandate by CIPC.
What is iXBRL?
Inline XBRL or iXBRL format is an open standard of financial reporting that allows a single document to provide both human-readable and machine-readable data. Companies in South Africa use this format to prepare financial statements that provide structured data to regulators and analysts and allow the preparers to retain full control over the layout of their reports.
What are the Benefits of the CIPC iXBRL Format?
According to an article in Accountancy SA, “As more regulators adopt iXBRL reporting for statutory submissions, a single set of data can potentially be prepared and uploaded to comply with multiple statutory reporting requirements, resulting in a reduction in the cost and time associated with compliance.”
Preparing and filing financial statements in the iXBRL format has the following benefits:-
- Offers transparency in business information to investors
- Improves efficiency and accuracy in decision-making
- Reduces cost and time associated with compliance
- Build upon more meaningful data
- Saves multiple submissions
- Improves the efficiency of regulators when dealing with several reports
What is a PI Score?
The Public Interest Score or the PI score is the interest of the public or the investors in the company. South African companies must calculate this score at the end of each financial year. Why? Because the score, along with the company’s financial statements, is submitted to the CIPC. The PI score is calculated based on some financial and non-financial parameters, which include:-
- The average number of employees
- Third-party liability
- Beneficial interest
You can calculate the PI score of your company here.
Who Needs to File AFS in iXBRL Format With CIPC?
After you have calculated the PI score for your company, you need to determine the format of reporting the company’s financial information. Companies have two ways of filing their financial information.
- Annual Financial Statements (AFS) in iXBRL format
- Financial Accountability Supplement (FAS), a short questionnaire to determine the person responsible for accounting records, financial statements, and other roles in the company
Your company is required to prepare audited AFS if:-
- It is a public company
- Its Memorandum of Incorporation (MOI) states that it needs to undergo a voluntary or mandatory audit of AFS
- It holds assets for unrelated persons of more than R5 million in the given financial year
- Its PI score is 350 or more
However, if the PI score of the company is 100 or more, you can:-
- Submit AFS in iXBRL format when internally compiled
- Submit AFS when voluntarily audited or independently reviewed
The Road Ahead
iXBRL mandate has been a huge step taken by CIPC to standardize the financial reporting process. If your company is mandated to file AFS in the iXBRL format, you must obtain professional services to ensure error-free preparation of financial reports.
A trusted partner like DataTracks can help you prepare quality reports without any hassle. What’s more? With experience of 17+ years and 2,20,000 compliance reports, DataTracks has the expertise you need in filing your AFS with CIPC. To know more about the CIPC requirements and your company’s PI score, get in touch with an iXBRL expert TODAY @+27-10-446-9061 or email at firstname.lastname@example.org.