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 BookkeepingYear-end accountsFiling

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.) Likely Possible 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 BookkeepingYear-end accountsFiling Type into a form iXBRL filing Incl.CT600 and comps

Scenario 2: already using AP software Practice doing filings for several clients and using established accounts production software product. Likely Possible 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 BookkeepingYear-end accountsFiling …and iXBRL file + other adjustments and inputs Software adds XBRL tags

Scenario 3: currently use Word/Excel Practice with several clients, or business with several subsidiaries – multiple filings to do Likely Possible 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 Likely Possible 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 BookkeepingYear-end accountsFiling Software adds XBRL tags …and outputs iXBRL file

Scenario 4: currently do both book- keeping and accounts prep/tax filing … whether in business or in practice Likely Possible 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 BookkeepingYear-end accountsFiling Single software product does both bookkeeping and AP …and outputs iXBRL file

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 Likely Possible 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: HMRC’s ‘recognised’ list: Implementing XBRL publication soon on Paul Booth IT Faculty Further information available