Paul Braden - KPMG

iXBRL7 September 2017

• What is iXBRL?

• Why do Revenue want iXBRL financials?

• When is an iXBRL filing required for Revenue?

• What does a Revenue iXBRL filing consist of?

• What needs tagged?

• Available Taxonomies

• Overview of New Taxonomies

• Detailed Profit & Loss Account

• iXBRL Filing Deadline

• Accounts Production Software

• Recap and Summary

• Questions

Overview

XBRL: eXtensible Business Reporting Language

– computer readable

iXBRL: inline eXtensible Business Reporting Language

– human and computer readable

What is iXBRL?

• Build REAP rules to compare key accounting ratios across industry, identify industry risks and perform inter-company and industrial comparisons with information contained in Financial Statements and presented on CT1 form

• Automatically prepare profile for each company

• Auto generate statistical information for management purposes

• Perform basic audit checks / reconciliations (e.g. reconciling loss relief/claims within a group)

• Electronic Financial Statements submitted - ITS and auditors can use them to support their interventions

• Predictive analytical models to identify risk of:

I. Payment non -compliance

II. Liquidation/receivership.

Why do Revenue want iXBRL financials?

• Phase I: Large Case Division and S110 securitisation companies

• Phase II: Companies have filing obligation where:

– Turnover exceeds €8.8m; or– Balance sheet total (i.e. aggregate of assets without deduction of

liabilities) exceeds €4.4m; or– The average no of persons employed by company exceeds 50.

• Waivers available for companies caught under Phase I and II for:I. Inactivity: no P&L movement & balance sheet movement of < €500II. Liquidation:

I. Not voluntary: no net assets for distributionII. Voluntary: net assets < €25k – apply to Revenue District case

manager• Phase III: will be advised at a later time

When is an iXBRL filing required for Revenue?

What does a Revenue iXBRL filing consist of?

Company Category Auditors Report

DirectorsReport

DPL BS Notes

Preparation & publication of financial statements required under RoI Co Act –subject to audit

Yes Yes Yes Yes Yes

Preparation & publication of financial statements required under RoI Co Act – not subject to audit

Yes Yes Yes Yes

Preparation & publication of financial statements required under RoI legislation other than Co Act

Yes* Yes* Yes Yes Yes*

*If applicable

What does a Revenue iXBRL filing consist of? Cont.

Company Category Auditors Report

DirectorsReport

DPL BS Notes

Tax resident in RoI – not required to prepare and publish financial statements under legislation in country of incorporation or in RoI

Yes Yes

Tax resident in RoI – preparation and publication of financial statements required under legislation in another jurisdiction

Yes* Yes* Yes Yes Yes*

Not tax resident in RoI –a branch or agency in RoI

Yes Yes*

Group Holding Co (Consolidated FS prepared & published)

Yes Yes

* If applicable

• Revenue has mandated the full tagging of financial statements

• Detailed Pension Notes & Detailed Financial Instrument notes do nothave to be tagged

• With exception of above exclusions, all data items presented must be tagged including comparators (previous accounting period figures)

• If a data item appears more than once then it must be tagged each time

• Where a financial report data item/concept does not have matching tag in taxonomy used to create iXBRL return, data concerned should be left as plain text

What needs tagged?

• Data listed in financial statement but not reported, i.e. dash, zero or a blank in a table, does not require to be tagged (caveat mandatory tags)

• As a guide, Revenue expect data tagged on Director's Report to include:– Description of principle activities of the company, – List of directors and Secretary, – Purchase of own shares, – Directors remuneration, – Directors acknowledging their responsibilities under the

Companies Act and the Directors signing the report and date of signing.

• Similarly the Name of Auditor(s), Emphasis of matter statement, Statement on reasons for any qualification of opinion and Date of Auditor’s Report are expected to be tagged in respect of the Auditors Report.

What needs tagged?

Taxonomy Taxonomy Version Schema Reference Applies to

IE GAAP Candidate Release ie-gaap-ful-2012-12-01 Periods commencing 2014 and after

IE IFRS Public Working Draft ie-ifrs-ful-2012-12-01 Periods commencing 2014 and after

FRS-101 Public Working Draft FRS-101-ie-2016-12-01 Periods commencing 2015 and after

FRS-102 Public Working Draft FRS-102-ie-2016-12-01 Periods commencing 2015 and after

EU-IFRS Public Working Draft IFRS-ie-2016-12-01 Periods commencing 2015 and after

Available taxonomies

Taxonomy objectives

a) Clearly and accurately define the XBRL tags needed to identify specific information

b) Cover the data in financial statements which is useful for analysis, comparison or review by existing and potential consumers of XBRL reports

c) Are easy and efficient to use

d) Provide clear and consistent tagged information which can be used effectively by consumers of XBRL information

Overview of New Taxonomies

General scope

• Taxonomies should support:

– Complete tagging of main financial schedules, key monetary & numeric data

– Tagging of textual info. important to interpretation & meaning of annual reports. This means high-level tagging to indicate presence & scope of textual statements, not granular tagging of detailed components.

• Not practical to define tags to cover every eventuality therefore appropriate techniques, such as use of analysis tags, enable comprehensive tagging of financial schedules in accounts without large number of tags in taxonomies.

• Areas of reporting not in scope for detailed tagging :

i. Very varied in content and form across companies

ii. Highly specialised – either in general or for sector concerned

iii. Not expected to be a high priority for analysis by likely users of accounts

Overview of New Taxonomies

• Revenue require all iXBRL files from 1 Dec 2015 to include a Detailed Profit & Loss account (DPL) but has not prescribed what should be included.

• Revenue’s DPL requirement should be met if a business fully breaks down income & expenditure items using relevant DPL tags in accepted taxonomies.

• At present new suite of taxonomies do not contain a separate DPL section therefore taxpayer must identify most relevant tag from elsewhere in taxonomy.

• In absence of specific tag or DPL section in taxonomy, three “further item” income statement typed dimension tags should be applied:

• “Further item of operating income / gain [income statement item, component of operating profit (loss)]”;

• “Further item of operating expense / loss [income statement item, component of operating profit (loss)]”; and

• “Further item of non-operating gain (loss) before tax [income statement item, component of profit or loss before tax]”.

• Revenue in process of creating a DPL taxonomy for new taxonomies

Detailed Profit & Loss account

• For accounting periods ending 31 December 2015 and after, there is a 3 month filing period from their CT submission deadline to make their iXBRL filing

• Irrespective of the iXBRL filing deadline being 3 months after the CT submission deadline, Revenue do not consider the CT return complete until a valid iXBRL filing has been submitted.

• Revenue have advised that 'draft' financial statements should not be submitted to Revenue in iXBRL without their prior approval, with an exception allowed where the only issue pending is that the director(s) have not yet signed the draft financial statements.

iXBRL Filing Deadline

• For finance teams preparing in excess of ten sets of financial statements, accounts production software should be seriously considered given the substantial benefits it can bring

• The majority of taxpayers continue to prepare their financial statements in Microsoft Word or Excel and then convert to iXBRL format

• If an accounts production software package is being considered, its iXBRL capabilities should be a major consideration

• There are a number of software packages in the market that promise 'automatic' tagging but it has been our experience that these software packages are aimed at very basic financial statements

• For anything that differs from the standard accounts production software's template manual intervention is required and in some case the accounts production software leaves over 50% of the financial statements untagged

Accounts Production Software

• Take iXBRL filing requirements seriously as it forms part of CT return with significant potential issues arising from non-compliance

• CT return is considered incomplete until a valid iXBRL submission filed with Revenue. Could have a real cash flow or operational impact as there is an additional three months from the CT submission deadline to make the iXBRL filing

• iXBRL is considered the financial reporting tool of the future so Revenue's iXBRL filing requirements are here to stay

• All Revenue iXBRL filings should be tagged using the most appropriate taxonomy from the new Irish suite, finalised in June 2017. This will result in additional work, time and potentially cost

• It is mandatory for all iXBRL filings to contain a fully tagged DPL account

• If contemplating investing in accounts production software, ensure that the iXBRL capabilities are considered as part of the decision

• when in doubt, speak to an iXBRL specialist

Recap and summary