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Posted by John Stokdyk in Tax, Technology on Mon, 17/01/2011 - Printer friendly
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It’s been said before, and we’ll say it again – the most
efficient way to create a set of iXBRL-format accounts for Username:

filing with HMRC’s Corporation Tax return is to use an Password:


accounts production tool that assigns the correct tags Log in
when the final accounts are generated. Forgotten your password?

This is the route most accountancy practices are likely to


take and by now accounts preparers should have
consulted with the people responsible for filing Corporation Tax returns to ensure that
the right systems are in place, the processes for getting the accounts data ready for Related content
submission to HMRC have been agreed and that staff have been assigned responsibility
What you need to know about iXBRL tagging
and adequately trained for the task
Smartphone apps for accountants
But with the mandatory requirement to file CT returns electronically due to kick in on 1 Tablet war breaks out at CES
April for years ending on/after 31 March 2009, many companies may not be in a position
Accountants warned not to be cost ‘outliers’
to go the accounts production route, for a variety of reasons:
HMRC and Companies House open for joint filing
The tools weren’t available to test and put in place before the iXBRL accounts will be What we learnt about social media in 2010
required. The switch to automated accounts production is a major undertaking which
@hmrcgovuk: Welcome to Twitter
cannot be rushed.
AccountingWEB’s 2010 technology review
The organisation only produces a small number of final accounts each year and
Christmas Gadget Countdown 2010
cannot justify the expense or disruption of installing specialist accounts production
software. More iXBRL tools come to market

Complex consolidation processes mean the entity will continue to produce the final
accounts in Excel or Word, and they cannot be easily replicated with a commercial Download library
accounts production application. Many accountancy firms working with such clients
will need to tag up the accounts supplied by clients before submitting them to HMRC Free
as part of the CT600 package. downloads
Nobody really took much notice of the iXBRL requirement until too late and it is not Check out

possible to install a new system in the time available. our library of


podcasts and tutorials.
If any of these situations apply to your organisation, the options facing you are simple:

1. File any statutory accounts due after 1 April 2009 early and submit a paper CT600
pack, or an electronic version with accompanying accounts in PDF.
2. Use iXBRL tagging tools to map your final accounts to one of the accepted iXBRL
taxonomies (ie UK GAAP or IFRS) and submit the iXBRL final accounts file you
produce.
3. Use HMRC’s Corporation Tax Online software system to submit your accounts
service. Note however that the department advises that it is designed for
companies with simple tax affairs.

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4. Enlist the help of a managed tagging service to do the project for you: this could
be done by several of the software suppliers listed here, a specialist outsourcer,
or your accountant.

This article looks at the second option – iXBRL tagging software. Drawing on previous
research on AccountingWEB.co.uk, information from HRMC’s CT Software pages and the
tagging service providers themselves, it will give you an idea of what’s available and
what’s involved in the tagging process. If that is not your preferred solution, another
guide will be published shortly looking at iXBRL outsourcing providers.

The software suppliers serving both the business


The iXBRL tagging process
and practice markets are aware of the factors
pushing both companies and their accountants 1. Prepare your final accounts and
output them in an electronic
towards the tagging option. CCH, Digita (Thomson
format, as a PDF, Word, Excel or
Reuters), IRIS (including PTP) and Sage - which all DTP file
offer integrated tax/accounts tools to practitioners
2 Import the final accounts file to
– have responded to demand with additional a tagging program, either desktop
offerings to tag accounts produced in Microsoft applications like those from TCSL,
CCH, IRIS, Digita or Sage. Or use
Word or Excel, and even DTP packages like Adobe’s
a web-based tool such as
InDesign. Seahorse from Corefiling, or the
TaxCalc/Arkk service.
“Putting together a set of statutory accounts for a
3. Review the iXBRL output file for
larger company requires a lot of skill and diligence,
accuracy and compliance with
and finance directors do not like to outsource it,” HMRC’s minimum tagging list and
explained Ernst & Young director Kevin Huby. adjust – only if absolutely
necessary
“Looking at it as a 2-3 year objective, they
recognise they will need a tactical solution to 4. Submit the iXBRL file to HMRC
comply in year one, and then switch to automated alongside the CT600 and tax
computations iXBRL file. The CT
accounts production,” he said. software used to work out the tax
liability should be equipped to file
The tagging process online, so all a tax team or adviser
HMRC has put a lot of effort into explaining what’s would need is the iXBRL accounts
file to add into the pack – check
required (see right) provides detailed guidance on
that you have all ingredients in
what it expects. If you are not yet familiar with place.
iXBRL, it is a variant of the eXtensible Business
Source: Company accounts HM
Reporting Language that is embedded within an Revenue & Customs require with a
“inline” HTML file so that the tagged accounts can Company Tax Return (32kb PDF)
be viewed in a web browser while the XBRL data
can be retrieved by HMRC or other computer
systems.

Within iXBRL, accounts data is mapped to a set of codes held in a data library known as
a “taxonomy”. Separate taxonomies have been agreed for different jurisdictions and
accounting principles, so you can map accounts prepared under UK GAAP or IFRS to the
appropriate tags.

During the first couple of years of mandatory efiling, HMRC is operating a “soft landing”
policy and has specified around a minimum list of 1,500 items that must be tagged, if
present in your accounts. That compares with the 4,000 items in the full standard
accounting taxonomies.

Tim Hervey, a business analyst responsible for Sage’s tax software, and Jeremy Rihll
from Thomson Reuters advise companies to automate accounts production by the time
the minimum tagging list is scrapped, as the extra work involved is likely to increase
tagging costs significantly.

If you are tempted to cook up your own iXBRL tagging tool, it is probably not a good
idea at this point. Excel expert Simon Hurst experimented with this approach last year
and concluded, don’t try this at home. Even using one of the commercial applications
listed below, many of which will automate and “learn” the tagging conventions you

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prefer to apply, manual tagging can be laborious and needs to be reviewed for accuracy
before submission.

Accountants can often be very particular about the way their accounts are presented –
this was one of the factors that encouraged HMRC to adopt the hybrid iXBRL approach
that allows its computers to read the data while you can see an accurate reproduction
in a Web browser. But even allowing font and other layout nuances, online filing will
push prepares towards much more standard approaches.

Once they’re mapped up and tagged to a particular taxonomy and beamed up to HMRC,
all the accounts formats are going to look indistinguishable to the HMRC computers that
store and analyse them. There will have to be very significant reasons to depart from
the standard taxonomies because of the extra effort and checks the tweaks will require
before dispatch.

In a whitepaper discussing iXBRL requirements, CCH points out that companies taking
accounts production in house, but relying on their accountants to tag and submit the
returns will alter the nature of the engagement. In order to ensure they are not faced
with a last-minute crisis when the time comes to submit the Corporation tax return, CCH
advises that the two sides need to meet to resolve these issues.

Look to the future


The reason HMRC and Companies House adopted iXBRL was to streamline the collection
of accounts data. In HMRC’s case, the XBRL files will help it compare companies against
industry benchmarks to focus its risk-based investigations efforts.

Companies and their accountants could be doing similar things too for more beneficial
purposes.

The pressure to comply with mandatory filing from the April 2011 deadline has perhaps
blinded many organisations – including software developers and tagging service
providers - to the opportunities that electronic accounts data will present. Management
reporting and business intelligence tools could benefit from automated collection, and
the UK could eventually follow the example of the Netherlands, where banks now ask
for accounts to accompany loan applications.

As a rule, nominal ledger systems are still outside XBRL’s orbit, so the focus is primarily
on bolting the iXBRL output system on to the back of traditional accounts preparation
processes. This is likely to change once the bookkeeping software developers (including
bigger players such as Sage and IRIS) build XBRL into their accounting programs - as
Dutch developer Twinfield is already doing.

HMRC’s adoption of iXBRL is going to have longer-term ramifications for preparers. If you
are turning to tagging tools to meet the short term compliance deadline, use the
breathing space you gain through this approach to research all of the possibilities that
lie ahead.

Another caveat is in not having standards based exports from general ledger systems. A
small company may not even be using a General Ledger but may be relying upon non-
specialist software (or paper). Where it does have a specialist tool, then the exports are
not yet standardised as the mandatory XBRL filing has yet to start.
the issues of linking Accounts Production systems with Corporate Tax Compliance
systems. No-one is paying any serious attention yet to moving further back up the
sources of information into the transactional systems themselves.

TAGGING TOOLS
For those organisations whose accounts are beyond what HMRC’s online software can
cope with, the tax department maintains a list of recognised suppliers for all categories
of CT/accounts and tagging tools. Inclusion on HMRC list is not a definitive requirement
for online filing, but is a good indication that the company is committed enough to the
task to undergo HMRC’s testing (and somewhat slow-moving) recognisition process. So
you would be well advised to start your search from the suppliers here:

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Date : 18/01/2011
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Arkk Solutions – offers a downloadable add-in lets users mark up Excel and Work
documents with iXBRL tags without leaving Microsoft Office. It also operates a web-
based tagging service in tandem with TaxCalc.
CCH – the CCH iXBRL Tag & Review Tool allows you to tag accounts which have
been prepared using other software and converted to HTML format for viewing
within a web browser. Once you have manually tagged a set of accounts, the output
will be stored within the tool to speed the completion of subsequent sets of
accounts.
Ez-iXBRL - an integrated XBRL data conversion platform deisgned for the
multinational marketplace, Ez-iXBRL has been recognised by HMRC for iXBRL
computations and final accounts under both UK-GAAP and UK-IFRS taxonomies.
IRIS/CoreFiling Seahorse – IRIS has teamed with CoreFiling to offer customers a
“predictive” web-based iXBRL tagging system. Files produced with Microsoft Word
are uploaded to the site and analysed to identify different sections as P&Ls and
balance sheets. Based on a collection of underlying rules built up from previous
experience, the software highlights elements for tagging and offers a pull-down
menu of suggested XBRL tags. If previous year figures are included, Seahorse can
differentiate between current and prior year and tag them accordingly. An Excel
edition is in development
KPMG - the Big Four firm has devised KPMG XME, an iXBRL conversion tool that turns
Microsoft Word and Excel documents into iXBRL files ready for submission to HMRC.
The program includes a test submission feature to filter out inaccuracies.
TCSL – Catering for the corporate tax department, the Alphatax CT software
developer has also created Alphatag, a program for those who want to continue
with their existing final accounts process. Alphatag is a desktop application designed
to handle up to 40 sets of accounts. A product demonstration of a relatively complex
22-page set of accounts was automatically tagged in a matter of minutes, with
additional prompts for ambiguous items such as third party transactions that might
need additional tagging. The system tags the statutory accounts prepared to either
the UK GAAP or the UK IFRS accounting standards using the appropriate XBRL
taxonomies, and will accept additional user-defined XBRL tag. The software learns
from previous choices and applies this knowledge when tagging other companies in
the group and later periods.
Sage - In addition to its integrated CT/accounts production software, Sage offers an
iXBRL converter sourced from its Corporation Tax partner Abacus, owned by
Thomson Reuters (see below ).
Thomson Reuters – as part of its three-prong strategy, the Digita and Abacus group
is offering users access to the same converter tool it will use in its iXBRL managed
service. The software will take files set out in Microsoft Word and convert them into
the iXBRL format required by HMRC. It supports both UK GAAP and IFRS taxonomies
and includes intelligent rules to remember the decisions made by the user on
previous files. The same Abacus tool is now available in three different guises: the
ONESOURCE brand marketed by Thomson Reuters to its corporate client; exactly the
same tool is marketed to practitioners by Thomson’s Digita subsidiary.

UBMatrix – Based on its experience with XBRL filings to the US Securities Exchange
Commission, UBmatrix has tools to map Oracle databases to XBRL taxonomies and
offers a Microsoft Office Report Builder that is able to prepare inline XBRL filings for
HMRC. This option may be available through suppliers of Oracle-based ERP suites
such as SAP and Oracle itself, and via the software companies’ resellers. Separate
CT software will be needed to produce tax computations and file the CT600 return.

More iXBRL resources


iXBRL coverage and expert guides on AccountingWEB.co.uk
CCH iXBRL website
Digita iXBRL website and whitepaper
IRIS iXBRL whitepaper

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Site Internet : http://www.accountingweb.co.uk
Date : 18/01/2011
Security Copy : AW_6417.pdf
Copyright : Accountingweb.co.uk

http://www.accountingweb.co.uk/topic/tax/what-you-need-know-about-ixbrl-tagging/473276

Keytime iXBRL guide - everything the practitioner needs to know


Sage iXBRL website and AccountingWEB article Preparing for iXBRL
XBRL International - UK reference site

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