Dr Paul Booth

Technical & Development Manager, IT Faculty

SETTING THE SCENE

The story so far

• XBRL is all about tagging

• … but the tags are electronic

• A bit like a bar code

• … for financial reporting concepts

A bit like a bar code …

• But instead of tagging a tin of beans

• … we’re tagging an item in a set of accounts

But what’s this ‘i’?

• iXBRL = Inline eXtensible Business Reporting Language

• It’s still XBRL – same tags etc

• … but the ‘i’ bit means that human eyes can read it too

Lots of applications of XBRL

• … but it’s HMRC’s impending requirement that is concentrating minds.

• CT filings submitted after 31 March 2011 for year-ends after 31 March 2010 must be done online, using iXBRL for

– Accounts

– Computations

• Today we’re focusing mainly on the accounts. The tax computations bit is relatively straightforward.

How do we make the iXBRL?

• Wide range of methods

• But many software products not yet publicly available

• … in some cases, even though they are ‘recognised’ by HMRC

• Which method is best depends on circumstances: who you are, what you do, existing methodology, business priorities, etc.

Year-end Accounts Production and Filing

Bookkeeping Year-end accounts Filing

Some scenarios …

… but they come with a health warning

… and not pretending to be

comprehensive

I’m not necessarily describing anyone

who’s here

The ‘best’ solution for your practice/business

could depend on many factors

Scenario 1: just one simple filing

• One single, simple business. Just one filing per year. (Or possibly a practice with a very small number of client filings.)

LikelyPossible solution: HMRC’s free product

• Does the whole filing: accounts, comps, CT600

• But it’s limited: suitable only for ‘smaller companies … with less complex tax affairs

• A bit slow and clunky.

HMRC’s free product

Bookkeeping

Type into a form

iXBRL filing

accts

comps

CT600

Scenario 2: already using AP software

• Practice doing filings for several clients and using established accounts production software product.

LikelyPossible solution: Use your AP supplier’s iXBRL-enabled product• For many sets of accounts, could be as simple as clicking the new ‘iXBRL output’ button.

• But make sure your supplier is releasing an upgrade, and on time.

• Accounts that depart from standard template may need extra work.

Accounts Production Software

Bookkeeping Year-end accounts

+ other adjustments and inputs

Software adds XBRL tags

Taggedaccounts

Scenario 3: currently use Word/Excel

• Practice with several clients, or business with several subsidiaries – multiple filings to do

LikelyPossible solution (a): get iXBRL-enabled AP software• May be more efficient in the long term

• But significant change to existing processes

Scenario 3: currently use Word/Excel

• Practice with several clients, or business with several subsidiaries – multiple filings to do

LikelyPossible solution (b): use post-production converter/tagger or outsourced iXBRL service• No disruption to your existing processes

• But you have an extra task at the end of those processes

• … or you have an extra expense and supplier to manage

Post-production tagging

Bookkeeping Year-end accounts

No change in present process

Extra process

Extra process

Taggedaccounts

Software adds XBRL tags

Scenario 4: currently do both book-keeping and accounts prep/tax filing• … whether in business or in practice

LikelyPossible solution: use ‘end-to-end’ software that does it all, or two closely integrated products

• Probably the greatest potential efficiency gains

• But probably the biggest disruption to existing processes

‘End to end’ software

Bookkeeping Year-end accounts

Single software product does both bookkeeping and AP

Taggedaccounts

… and adds XBRL tags

Scenario 5: currently do tax filings but not final accounts preparation• … taking the final accounts as a ‘given’, from the client or

from client’s other adviser

LikelyPossible solutions (a) get A N Other to supply an iXBRL file; (b) get them to supply a Word file and use post-production converter or outsource

• Not necessarily your problem

• Make sure you are given the correct accounts

The ‘soft landing’• HMRC say ‘sympathetic

approach’ to penalties in first two years

– Reasonable Excuse

– Reasonable Care

• In the first two years, we can use a smaller ‘dictionary’ of tags

– Not everything in accounts will need to be tagged.

Don’t panic!

• XBRL page: www.icaew.com/xbrl• HMRC’s ‘recognised’ list: www.hmrc.gov.uk/efiling/ctsoft_dev.htm• Implementing XBRL publication soon on www.ion.icaew.com/itcounts

Paul BoothIT Faculty020 7920 8476paul.booth@icaew.com

Further information available