The ACRA has made it compulsory that all incorporated companies except those specifically exempted from it must file their financial statements in XBRL format. It is the format in which business reporting is done around the world. There are many advantages to filing the statement in this format which we will see in this article. Most of the reputed service providers are offering the XBRL statement preparation service so that companies can do it without any problem. You can also use the XBRL financial reporting services offered as part of the accounting package and ensure that you stay compliant.
Understanding The XBRL Packages Available
There are different packages offered by the accounting services companies for XBRL reporting services. This will help you to choose the right package that is most suitable for your company. You can opt to get a complete set of all statements to be prepared in XBRL or just get the main financial statements in the format.
If there are extra elements like property, employee liabilities to be paid, machinery and plant, assets or liabilities, then there will be extra charges over and above the packages. If the statements are submitted to the service providers in any format that doesn’t comply with the BizFin requirement then also you are liable to pay more than the package fees. Please check the needs and the fees.
If you provide the financial statements in word format with BizFin compliance then the XBRL can be prepared easily. From December 2013 the earlier FS Manager was changed to BizFin and the portal for submission of the XBRL statement was changed to BizFinx Portal. The service providers will usually take about 3 to 5 days for preparing the statement in the required format.
XBRL is expanded as an eXtensible Business Reporting Language. This is normally used internationally for reporting financial statements digitally. The benefit is that this can be sent directly to the various people like auditors, financial analysts, and regulators without downloading the file. This saves you a lot of time. The ACRA originally implemented the change to this format from the earlier FS format in 2007.
What Makes XBRL Better Than Earlier Method?
There are several advantages to XBRL. ACRA has understood that filing the statements in this format enables businesses to be run in the country in a better manner. This format facilitates the provision of financial information in a better way. It improves the transparency of the process and helps in regulating the financial dealings in a better way. This makes the financial information to be available on time.
Electronic tagging is another major advantage of XBRL. By tagging electronically the information on the format is machine-readable. The companies can extract any information without copying from the format. You don’t have to download the statements. With XBRL it is possible to tag almost any information on the statements including numbers and text. The collation of data can be done in a better manner with XBRL.
Who Must Ensure Proper Filing Of Financial Statements?
This is a valid point that must be understood by the companies. The company may be getting the preparation and filing of financial statements done by other persons or agencies. But the directors of the company are responsible for making sure that the information in the statements is accurate. They must check the statements before it is being submitted to the ACRA.
Which Businesses Need To File The XBRL Format?
The rule to file using the XBRL format was introduced in 2007 and later revised in 2013. All businesses have to necessarily follow the revised regulations now. As per this regulation all companies incorporated in Singapore, except those particularly exempted, must file the financial statements in XBRL format. Companies that are either limited by shares or unlimited by shares are included in this. The Minimum Requirement List of the ACRA mandates that all these companies must file all the financial statements in XBRL format. The earlier facility to file partial XVRL is no more available.
Which Are The Companies Not Regulated By The XBRL Requirement?
Some companies have been given exemption from filing all the various financial statements in the new format. They can file the statements in PDF format. They need to use the XBRL format only to file the Financial Highlights. The exempt companies are as below.
Those companies which have their activities controlled by the Monetary Authority of Singapore, like commercial banks, finance companies, insurers, and merchant banks need to file in the XBRL format.
Some companies need not follow the International Financial Reporting System, Singapore Financial Reporting System or SFRS For Small Entities. These companies also are exempt from the regulation.
Exempt Private Companies that are still solvent need not file the financial reports with the ACRA. For those exempt private companies that are insolvent, there are two options for filing their statements with the authorities. They use the XBRL format to file all their financial statements. The other alternative is to use PDF format to file all their statements and also file the Financial Highlights in the mandated format.
Those companies that are limited by guarantee can continue the old method of filing with the ACRA in the PDF form. The PDF format can be used to file financial statements to the ACRA by the foreign establishments and their branches in Singapore.
How Do You Benefit By Voluntarily Filing XBRL?
When the ACRA started the new portal for filing financial statements BizFinx, they made available a facility of data analysis without charges. This facility is available only once in a year within 30 days of filing the annual returns with a complete set of statements in XBRL format. This can be used by the firm’s directors and officials by logging into the BizFinx portal.
This data will help the companies to compare their results with their competitors. Better analytical data will help the establishments to improve their performance. They can make the right decisions after getting themselves familiarized with the latest trends in the industry. They can reduce costs in the company as they get better business information from the analysis. This also helps in sharing the data with their subsidiaries irrespective of what accounting systems they may be using.
Do You Need To Outsource The Work?
It is not necessary to outsource the work to a service provider. You can create the financial reports in XBRL by yourself. There is a tool available on the ACRA website which will facilitate you to prepare the statement in the prescribed format yourself. The free tool BizFinx is available offline too for your convenience. it enables companies to create the financial statement in the XBRL format and also submit the same online.
The need for outsourcing comes because of the seriousness of the job. Submitting incorrect data can be a serious problem. The onus of submitting the correct information in the format is with the directors of the company. this is why the job is not often left to the other employees. It is the directors who often file the financial statements after checking them thoroughly. This will help to ensure that the right figures are appearing on the statement.
But preparing the financials statement in the XBRL format can be a daunting task even for the directors. It is also a job that will consume many hours which they don’t usually have. They can use the time for generating more business for the company. This is the reason that companies will like to spend a little money and get it done by the experts. They have the people and the knowledge to complete the job perfectly.
Once you have handed over the job to a good outsourcing company that offers accounting services, you don’t have to worry about it. You can be sure that it will be done perfectly. All you need to do is to check it before submitting it.
The service providers in Singapore have been helping many small and medium companies file their statements in XBRL format. The packages are available at very affordable prices. This will take responsibility from the hands of the companies. They don’t have to worry about submitting the correct figures. Many companies also offer XBRL service as part of their accounting packages.
When you hand over the work you must ensure that the company you hand over the work has the experience and trained staff. You must make sure that they are doing similar work for many companies. You can check with your business friends to recommend a good company that will do the job in the best manner. For small and medium companies, it is better to outsource the full accounting job to these companies and get this service along with it. That will mean fewer problems for company employees.