XBRL: The International Best-Practise Standard for Digital Business Reporting

About the Presentation

Contents

What is XBRL?

Legal Mandate

Current Challenges

The Programme at a Glance

o Vision

o Strategy & Requirements

o Change Management & Communication

o Technology

How will the Solution Work?

The Role of Software Service Providers

Programme Plan Stages

Qualifying Entities

Pilot Testing and Live Submissions

Road to Compliance

Conclusion

Q&A

What is XBRL?

• XBRL (eXtensible Business Reporting Language) is a digital reporting

Technology Standard specifically developed for business and financial

data exchange

• It is a freely available Standards-Based way to communicate business

information (e.g. IFRS accounting standard)

• Based on a Taxonomy (dictionary of facts)

• Managed by a Global non-profit consortium (XBRL International, more

than 50 countries) – local jurisdiction is XBRL South Africa

The CIPC Programme(Legal Mandate)

The Companies Act & Close Corporations Act

• Important: Regulation 30 (5) (a) of the Companies Act specifically prescribes the

Commission must establish a system to review AFSs and FASs with the objective of

monitoring compliance with the Act. According to Section 6 (13) (a) (iii) the system to

be established by the Commission may use any means of electronic communication,

to facilitate the automated filing of any information contemplated by the Act. This

means the Act allows implicitly that the CIPC can prescribe the use of XBRL without

the need to change any legislation.

Please refer to Notice 50 on the XBRL page of the CIPC website (www.cipc.co.za)

The CIPC Programme(Current Challenges)

Drivers for Change

• More than 1.8 million active entities registered with CIPC

• A sub-set of these entities are submitting audited or independently reviewed

AFS’s (Around 100 000)

• Entities not submitting AFSs, must submit FASs (not yet in XBRL)

• PDF as the current AFS submission format leads to limited operational

efficiencies and affects regulatory effectiveness as data is unstructured. Due to

high volumes CIPC adopted a risk-based approach

• The CIPC identified Digital Financial Reporting via the technology of

eXtensible Business Reporting Language as the solution to improve both

operational efficiency and regulatory effectiveness

The CIPC Programme (The Programme at a Glance)

High-level Concepts

• Vision (Why will XBRL be implemented by the CIPC?)

• Strategy & Minimum Requirements (What is the CIPCs

approach to implementation?)

• Change Management & Communication (Who will be

affected?)

• Technology (How will implementation be achieved?)

The CIPC Programme(Vision)

To pave the way for SA to eventually achieve Standard Business

Reporting (SBR)

• CIPC central government agency for registration of all business entities (Companies & CCs)

• Entities also report to other regulators (e.g. SARB, FSB, SARS, JSE, etc.) with additional disclosure requirements

• Shared taxonomy amongst all regulators (with possible unique extensions by regulators)

• Principle of “report-once-share-many” (CIPC may become central hub)

• Better analysis on individual AFSs

• Business Intelligence (BI) on consolidated data

• Determine trends per industry or economy as a whole for early warning and wise investment decisions

The CIPC Programme(Strategy & Requirements)

The CIPCs Approach to Implementation

• Strategy of Mandatory implementation by 1 July 2018

• The CIPC taxonomy’s scope main focus is on covering the reporting requirements of domestic entities as prescribed by Companies Act, No. 71 of 2008. Apart from the SA-specific requirements, the IFRS taxonomy (as on 31 March 2016) has been incorporated

• IMPORTANT: Minimum Tagging will comprise of individual tagging of all applicable facts of the Primary Financial Statements (PFSs) and a set of disclosures / explanatory notes. All accounting policies and notes are to be block tagged

• 61 Existence Assertion data elements (included in the minimum tagging

requirements and representing validation rules) will be mandatory. Other data elements should be tagged where applicable.

The CIPC Programme(Change Management and Communication)

Change Management & Communication is Critical

• Create awareness with entities that XBRL submissions will be mandatory as from 1 July 2018

• Guidelines published on website (www.cipc.co.za):

• Communicating regulatory requirements to entities (Business Aspects)

• Communicating technical requirements to both entities and software service

providers (Technical Aspects)

• Frequently Asked Questions (FAQ)

• Assist entities with engaging with software service providers

• Appointment of professional communications company to drive change management

The CIPC Programme(Technology)

Technical Implementation

• Development of taxonomy (dictionary of facts with context) of CIPCs reporting

requirements incorporated into IFRS

• Specific implementation of iXBRL instead of standard XBRL (both human and machine

readable) embedded in XHTML files to be submitted to CIPC

• iXBRL assists with implied audit of tagged data

• Automated validation, acceptance or rejection notification, analysis of individual AFSs

as well as BI on consolidated data

The CIPC Programme(How will the solution work?)

Solution Components

• Centrality and Purpose of Taxonomy (Definition & Validation)

• Role of Software Service Providers for Client-side Software

• CIPC Platform and Functionality Behind the Portal

The CIPC Programme(How will the solution work?) Continued

CIPC & Entity Interfaces

Client Interfaces

• Assist filers with Back-End Automation

• Investigate capabilities of existing software solutions already in place

• Custom development of back-end automation / integration

• Assist filers with Tagging of AFS data and submission of XBRL files to the CIPC

• Custom-developed software packages for manual tagging (no back-end automation / integration)

• Complete outsourcing of AFS compilation (submit spreadsheet or Word doc, receive iXBRL back)

• Software service providers not to be endorsed by CIPC, but CIPC is

assessing capability before recommendation to entities. SSP Panel

Established

The CIPC Programme (The Role of Software Service Providers)

The Programme Plan includes four Stages

1. XBRL Planning (Feb 2016 – August 2016)

• Development of business case, identifying stakeholders, establishing programme team, taxonomy

development

2. Reporting Platform and System Development (Sept 2016 – Nov 2017)

• Consolidate request for proposal, issue tender, evaluate bids, appoint service provider, develop

system

3. Pilot Measure and Maintain (Dec 2017 – Jan 2018)

• Validate milestones against plan, alignment of change management and communications plan,

skills transfer, measure results against plan

4. Official Roll-out (Jan / March 2018 – April / June 2019)

• Test interfaces between CIPC & client entities, live roll-out

The CIPC Programme (Programme Plan Stages)

Note: Some aspects of

stages 2 & 3 now

overlap, but overall plan

stays on track

The CIPC Programme (Who are the Qualifying Entities?)

Qualifying Entities

1. Profit & Non-profit Companies

A Profit Company is –

(a) a State Owned Company; or

(b) a Private Company if –

(i) it is not a State Owned Company; and (ii) its MOI –

(aa) prohibits it from offering any of its securities to the public; and

(bb) restricts the transferability of its securities;

(c) A personal liability company if – (i) It meets the criteria for a private company; and (ii) Its MOI states that it is a personal liability company; or

(d) A Public Company, in any other case

2. Close Corporations

Please refer to “Filers Guidelines: Business Aspects” on the CIPC website (www.cipc.co.za) for more details

Pilot Phase & First Live Submissions

• As per current compliance process, entities latest (irrespective of year) final approved audited or

independently reviewed Annual Financial Statements, are always to be submitted together with their

Annual Returns on first applicable date on/after 1 July 2018.

The CIPC Programme (Pilot Testing and first Live Submissions)

Who,

What, How,

Why?

The CIPC Programme(Roadmap to Compliance: What must Entities do?)

Conclusion(Final Thoughts)

CIPC Embraces…

As from 1 July 2018 …

Q&A

For more Information follow the “XBRL Programme” Menu Item on the

CIPCs Website (www.cipc.co.za)