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Africa|Business|Financial|Service|Services|System
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africa|business|financial|service|services|system

CIPC to implement key iXBRL Phase 2 changes by Oct 1

17th July 2019

By: Nadine James

Features Deputy Editor

     

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It has been about a year since the Companies and Intellectual Property Commission (CIPC) rolled out an automated mechanism to regulate financial reporting disclosures and compliance, becoming the first regulator to do a full-scale implementation of inLine eXtensible Business Reporting Language (iXBRL) in Africa.

The organisation notes that, in trying to maintain its momentum, having successfully completed the implementation of Phase 1, the CIPC has set itself a new target date of implementation for key Phase 2 activities by October 1, 2019.

Chief among these activities will be to update the current CIPC 2016 taxonomy to incorporate the 2017, 2018 and 2019 International Financial Reporting Standards (IFRS) changes.

The CIPC explains that iXBRL, developed in the late 1990s, was invented as a result of the need to report financial information in an electronic format for easier consumption and analysis. The language has since developed into a global standard.

The ultimate trigger for the CIPC to implement iXBRL was a need to ensure compliance with Sections 30, 33 and 187(3) of the Companies Act.

The Act in Section (6)13 also empowers the commission to establish a system to facilitate the filing of any information contemplated by this Act.

The CIPC’s journey involved the development of a CIPC taxonomy in line with both the Companies Act and IFRS, and the development of a Web-based iXBRL file validation service on the CIPC’s e-services portal, as well as the development of the capability to submit iXBRL files from qualifying entities.

The CIPC also needed to create an ecosystem that would reduce the burden of compliance, converting financial statements into iXBRL.

For the latter, the CIPC created a panel of software service providers that would work closely with it to assist qualifying entities in converting their financials into iXBRL.

CIPC achieved all its set objectives, which led to a successful roll-out in July 2018.

“One of the biggest challenges” was with entities that continued to file yearly returns instead of filing the appropriate documentation, the CIPC notes, adding that it responded by introducing a hard-stop functionality on March 12, this year.  

“Some of the significant gains made since the implementation of the iXBRL solution include the fact that turnaround times in terms of investigation of cases improved drastically; and obvious noncompliance is detected immediately upon filing, which allows for the back office team to focus on substantive analysis of the financial information presented,” the organisation reports.

The CIPC regularly maintains a “bird’s eye view” in terms of international developments on the evolution of iXBRL.

“It is interesting to note that key jurisdictions leading the iXBRL evolution such as the European Securities and Markets Authority and US Securities and Exchange Commission are focused predominantly on improving data quality, quantity, availability and standardisation.”

The CIPC notes that this has set the tone for what XBRL South Africa and CIPC have decided to focus on as key objectives going forward.

It will also focus on instilling standard business reporting, and is currently leading discussions with the South African Revenue Service, the Financial Sector Conduct Authority, the South African Reserve Bank and Statistics South Africa.

There is also a planned international XBRL conference hosted by XBRL South Africa and its members from August 14 to 16, where the CIPC will be providing a contextual overview of the implementation of iXBRL.

Global trends like improving data quality and achieving standardisation in terms of reporting will form the backbone of the CIPC’s strategy to ensure it continues to align with global best practice.

“The filing community can also expect a heightened focus on enforcement of the Companies Act and appropriate sanctions for those qualifying entities that are found to not have complied with the requirement to submit annual financial statements [through] iXBRL,” the CIPC concluded.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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