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How To Ease The Process Of Converting Your Afs To Ixbrl
2019 has seen the CIPC roll out the second phase of the iXBRL mandate with the updated IFRS taxonomy. The objective of the CIPC iXBRL mandate is to accomplish the goal of gathering accurate financial data and to instill transparency and though standardized financial reporting. AFS is a comprehensive document providing crucial information on the financial status of entities. The process of converting AFS to iXBRL should thus, be well understood. The ease and success of converting AFS to iXBRL completely depends on how well you understand the iXBRL reporting guidelines.
There are various aspects of the AFS to iXBRL conversion process that you need to acquaint yourself with. These include understanding the mandate itself, keeping yourself abreast of the updates in the CIPC taxonomy, understanding the scope of tagging and knowing the different tagging approaches (On-document or template tagging). The overall process of learning and preparing your AFS to iXBRL might prove daunting. All of this especially true if your organization has decided to take the entire process in-house. In case you’re outsourcing the AFS to iXBRL conversion to a solution/service provider, then it is imperative that you at least understand the basics of all the afore-mentioned aspects, so that you can verify the work done by the service provider.
The process of conversion of AFS to iXBRL can be made easy if planned well in advance and in detail.. Having a strategy to prepare your iXBRL reports will allow you to file your reports with the CIPC without any hassles.
Here, we’ve listed a few ways in which you can ease the AFS to iXBRL conversion process.
AFS to iXBRL
Plan for a timely Submission
To ensure that your iXBRL report gets submitted without a glitch, you will need to put in prior efforts to plan the implementation of the CIPC directives. The first thing you need to do is to find out if your entity is eligible to file the AFS in iXBRL as per the CIPC mandate. The CIPC has issued a set of guideline stating that only the entities that meet a certain Public Interest (PI) score are required to file their AFS in IXBRL. Find out your eligibility through our Public Interest (PI) score calculator.
Choose between an Outsource and an In-house option
The next thing you need to ascertain, once you find out you’re eligible, is to decide if you want to undertake the conversion process in-house or outsource it to a solution/service provider. If you choose the in house process, you will need a well-qualified team with people who have an in-depth understanding of XBRL/iXBRL, CIPC taxonomy and the expertise in the tagging process. If you outsource, you need to ensure that you’ve done the due diligence on the vendor so you get an accurate, timely, valid document that you can file in time.
Either way, it is best to test run your strategy – if you are planning an in-house conversion approach, use an iXBRL tool and try part of the conversion. Or if you are planning an outsourced conversion approach, ask your shortlisted vendor to test drive you through how the process would work. Also, ask for references and speak with other users of the vendor / solution to determine the pros and cons for yourself.
Plan a Calendar
Whichever path you choose to get your final iXBRL report, it is good to have a calendar in place. In an inhouse conversion option, you will need to consider the amount of time that your team would need to train and understand the conversion process. It will also include the actual iXBRL preparation time. But if you’ve decided to outsource the conversion, have a review calendar planned and agreed upon with your service provider. As a rule of thumb, if you select an in house conversion option, try and start a month ahead of your submission deadline. And if you are outsourcing, and only need to review the final iXBRL document, set aside a week to review the final iXBRL document once it comes back from your provider. This should give you sufficient buffer to pull together what is missing, seek clarifications and make sure you have the perfect report that can be lodged smoothly with the CIPC.
Have a budget chalked out
One of the most important factors that you need to consider is your budget. When you pick an in-house option, don’t forget to add the costs of your internal resources that will need to work on your iXBRL conversion. The internal costs should include manpower, training on XBRL, and time to constantly stay abreast of the latest CIPC taxonomy and filing rules, so that your inhouse team can tag, validate and create the right document for your CIPC filing. Outsourcing your iXBRL conversion to service providers may seem like a higher cost option (or not, depending on the service providers’ pricing), but may actually result in a total cost which is less, if they don’t demand your team’s time and attention except for the final review.
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