The Companies and Intellectual Property Commission (“CIPC”) has introduced a new and innovative way of lodging the financial statements which are to accompany the Annual Returns of a company.
At present CIPC receives all Annual Financial Statements in PDF format. The analyzing thereof is currently being done physically, one-by-one. By using this method, and having to complete a large number of calculations on a manual basis, the system is prone to mistakes or missing important facts within the statements. It is slow and doesn’t facilitate comparing statements between companies to determine trends within sectors, or even the economy as a whole. This has lead them to initiate a new way of lodging returns.
eXtensible Business Reporting Language (XBRL) reporting is currently being used in over 50 countries around the world and is a new way of supplying your annual returns. In lay-man terms it can be described as a change from film photography to digital photography, paper books to digital books. Having financial statements in an XBRL format means the Department of Trade and Industry, through CIPC, can use the data, share it, and also analyse it on a clearly defined digital platform.
There are currently about 1.8 million companies registered at CIPC. The initial implementation phase, which is due to start in July 2018, requires certain types of companies to submit their financial statements in an XBRL format. These entities include:
These companies are from 1 July 2018 required to have tagging software in place to produce the Annual Financial Statements in XBRL format, alternatively to have an outsourced partner who can do so on their behalf.
After this first phase all companies with a Public Interest Score of over 100 will also be required to submit their financial statements in the XBRL format however this date is still to be determined.
According to the Companies Act 71 of 2008 as amended, all entities need to submit AFS returns through a system defined by CIPC. So should you not comply you will be subjected to an investigation which will lead to an administrative fine or prosecution.
Statucor is able to assist with this process but it will entail an additional cost for submission of Annual Returns, which will be invoiced separately by Statucor. We will also be in a position to offer the XBRL tagging solution independently for those who submit their own Annual Return.
If you are unsure of whether or how this affects you, or if you would like to know more please do not hesitate to contact us on email@example.com or (011) 488 1700.