How did it start?

The Companies and Intellectual Property Commission of South Africa (CIPC), has launched a Programme in 2016 to introduce eXtensible Business Reporting Language (XBRL). XBRL is a technology standard that enables the implementation of Digital Financial Reporting, by revolutionizing the way reporting entities submit Annual Financial Statements (AFSs) to the CIPC. The CIPC is the central government agency in South Africa responsible for both registration and regulation of companies and close corporations.

The scope of XBRL reporting applies to a sub-set of around 100 000 qualifying entities, out of a total of around 1.8 million entities registered with the CIPC.

The Commission has mandated submission of AFSs for qualifying reporting entities via XBRL as from 1 July 2018, and a notice in this regard has been published on the CIPC website.

Why XBRL?

"XBRL is gaining momentum worldwide as a best-practise standard for electronic data exchange amongst organizations.

In the case of the CIPC, the following reasons lead to the adoption of XBRL:

Improved efficiency for dealing with high volumes of reports – manual analysis of large numbers of AFSs will be replaced by automated analysis and validation of reporting criteria;

Improved regulatory effectiveness – analysis on consolidated statements per industry via Business Intelligence (BI) technology, will replace the limitations of manual sample analysis on individual statements only. XBRL therefore enables improved high-level understanding of business in South Africa;

By implementing XBRL, the CIPC hopes to pioneer the eventual roll-out of Standard Business Reporting (SBR) in South Africa, where various regulators can share data – the principle of “report-once-share-many”. This will eliminate the need for businesses to report different formats of financial statements to multiple regulators;

Sharing data with other government agencies can be used for economic policy formulation. The economy as a whole can therefore be impacted in a positive way. Potential data sharing with private investment companies can also assist with better investment advice and decision- making.

Incorporating Account Standards

The CIPCs reporting requirements, as built into the CIPCs XBRL taxonomy (dictionary of financial facts) will be based on the International Financial Reporting Standard (IFRS), pertaining to the format of AFSs. In addition to best-practise technology standards, the CIPC therefore also implements best-practise standards from an accounting point of view.

How is the Programme Progressing?

The Programme is currently in the development phase of the technical reporting platform. This will entail a web portal on the CIPCs website for uploading of XBRL data files. Progress is on track according to planned timelines and deliverables.

Client Interfaces with the CIPC

Every reporting entity will be required to have XBRL-capable software in place for compiling of AFS data in XBRL format, according to the CIPCs published taxonomy.

The CIPC has established a Software Service Provider (SSP) Panel to assist client entities with their selection of software solutions to facilitate interfacing with the CIPC. A number of SSPs have been assessed in terms of their software solutions and services they offer to reporting entities.

A list of recommended SSPs has been published on the CIPCs website. Reporting entities are encouraged to engage with the recommended SSPs for provisioning of client-side solutions. Client entities are under no obligation to only use software and services provided by panel members, but the panel members are recommended, because they demonstrated adherence to the minimum technical requirements of the CIPC.

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