Has anyone found the HMRC iXBRL Helpbox?  The cynical amongst this audience might be led to believe that it’s dearth of uses is due to an inability to find the `Helpbox` rather than a lack of issues with the service!

I thought that I’d help out by putting a couple of snags here, and letting other practitioners add to the list for general community assistance

– Update –
I’ve had quite a few email responses to this already, so am going to update the below to also include some process issues as well as snags, plus some questions in case other individuals know the answers to these already.

Snag #001 – Dates – posted 5th July
Currently there is a `feature` in the HMRC validation routines for submitted iXBRL Accounts which fails to validate a Date where the month is in CAPITALS. So 31 December 2010 is a valid date when submitting to HMRC, but 31 DECEMBER 2010 will cause your Accounts and hence your Tax Filing to be rejected.
If you have signed off accounts with dates in a capitalised formet, you will need to over-ride them by creating a manual/hidden tag instead with a date in a format the HMRC systems can cope with.

Snag #002 – Subsidiary Companies – posted 5th July
Currently there is an issue on Accounts where a generic dimension memeber is used in some situations (technically where it is related to both a primary item and a hypercube & where the generic dimension also appears in a secondary dimension). This manifests currently in the IFRS Related Parties note and also the UK-GAAP Consolidation notes. The only work-around for this is to not tag the information.

Both these are known issues that HMRC should be dealing with, but currently there is no communications and no advised resolution date. My informal expectation is that it may get resolved in Q4 2011, but as there is not even official HMRC acknowledgement of the issues to date, any fix timeline that even I’m speculating on must be treated as not probable.

Snag #003 – Branches – posted 6th July
What happens when you have branch data for an overseas corporate with a UK tax filing requirement? Originally the indications were that you provide the overseas XBRL for the group if it is on the `white list`, or else the branch accounts should be tagged in isolation. Currently though only US-GAAP is on the `white list` and most Branch Accounts do not include data required for mandatory tags; e.g. Director signing off the accounts. Possibly HMRC are now encouraging PDFs instead?…

Validations #001 – Accounts and Tax – posted 5th July
A big process delay appears when the cross-check of the accounts and tax data fails. This is usually due to minor variations in the spelling of the Company Name between the Tax Return and the Accounts, and also minor variations in the Companies House Registration Number (CoHo RegNo) which are usually caused by omission of leading zeros in one product but not the other. Also shown as Error 1606 on the ChRIS error report.

Questions #001 – Glossy Accounts – posted 5th July
How exact a representation is necessary when tagging the Parent Company elements of a set of glossy group accounts? Does HMRC just accept a cut down P&L and B/S?

Questions #002 – Comparative Data – posted 6th July
Do you have to tag the prior year / comparative values in the P&L or B/S? Revenue guidance at events seems to have moved between yes and no several times, along with a concession for year one to not tag the comparatives. We think the current positions is that they are optional but cannot find an authorative source.

Please do comment to add other items that you are experiencing or send me an email. I will update this page when HMRC provides their own official statements or other iXBRL community members provide their own response.

OK, so it’s a long time since I wrote on this subject but I was compelled by the document I am currently reading. This week HMRC / Companies House emailed out a Detailed Tagging Information Document aimed at expanding upon the original Preparers and Developers Guide.

The paragraph that struck me is item 4.4 on page 5 out of 41 – it is the explanation of tagging choices when using the minimum tagging list. The point reads as follows

The use of minimum tagging should NOT be allowed to distort the choice of tags for particular data items. In other words, if a preparer is following minimum rather than full tagging, this should NOT lead to a different tag being chosen for an item under minimum tagging than would be chosen under full tagging.

For example, if a preparer following minimum tagging believes tag X is the correct tag for a particular item under full tagging, but tag X is not in the minimum tagging list, then the preparer may leave the item untagged. The preparer should not choose tag Y which is in the minimum list but is less appropriate for the data item, just to try to achieve tagging. (Clearly, if tag Y is equally appropriate, then it may be chosen.)

Preparers following minimum tagging MUST make their tagging choices when viewing the full taxonomy. Viewing the minimum tagging list in isolation from the full taxonomy is likely to lead to misunderstandings over the meaning of tags.

Whilst conceptually I understand the point being made and can agree with it as a theoretical point, the practicallities make it seem bizarre. Surely the point of the MTL was to save the preparer effort in tagging their accounts. They could compare their own accounts with a list of circa 1500 items rather than circa 4500 items. However this revised guidance suggests that they will have to look at potentially 6000 items now to make the correct decision?

Maybe I’ve missed something (happy to be corrected Peter) but I’m struggling at the moment. Otherwise it seems to be another push towards fully automated accounts production environments rather than using a tagging tool.

This will undoubtedly make a significant change to the strategy and timelines for UK corporates and accountancy practices as they consider how they respond to mandatory iXBRL filing of Accounts to HMRC.

With this announcment, there is the potentially that corporates will need to file `old` accounts once electronically before they are changing their GAAP under the APB announced consultation on migration to T1 & T1s (IFRS) and T2 & T2s (FRSME) as a replacement for the existing UK GAAP for large companies.

Does this prolong the shelf life of Conversion Tools and Outsourcing, or bring forward the adoption of specilaist Accounts Production? You couldmake an argument for either!

After two decades of being inside a Top Accounting Firm, the Abacus software group (henceforth to become ONESource Corporation Tax UK) in joining Thomson Reuters finally has access to other Large Firms.

They have now landed the UK business of PwC to supply them with UK CT Compliance software, but a quick google search barely turns anything up. A couple of newswire services picked up the press release and a quote from MD Mike Roberts, see here, but otherwise it seems to have gone unnoticed by the trade press!

Come on guys – this is NEWS surely …

Simon has succesfully placed an article (double paged) in Taxation 2, and I’m quoted in it talking about the future of Tax Technology. Probably available online somewhere, including Mr Godley’s blog (see links).

If you want to see the article, feel free to access it via my own Website (see links) or go here to access it directly.

The APB defines all of the following as non-Audit services:-
Performing the tagging exercise;
 Providing a service to the directors of the company as to accuracy of the tagging performed by management (e.g. by undertaking an agreed upon procedures engagement);
 Providing advice on the selection of individual tags;
 Supplying accounts preparation software that automates the tagging;
 Training management in XBRL tagging.
It then goes on to remind us that the auditor must consider possible threats to independence and objectivity if it pursues these non-Audit services and whether it is therefore appropriate to accept the engagement.

Examining the Ethical Standards in ES5, they highlight that “some non-audit services related to XBRL may give rise to a management threat. In particular performing the XBRL tagging can involve judgements”. Furthermore “A selfreview threat exists when the results of a non-audit service are reflected in the amounts
included or disclosed in the financial statements that are subject to audit”. Whilst in Year One tagging will almost certainly occur post production of the financial statements, “tagging performed in ‘year one’ may provide the basis for the tagging in future years. If an audit requirement is established at some stage in the future a self-review threat may exist”.

Lastly, they conclude that “if XBRL becomes integrated into accounting systems it may be difficult to separate XBRL tagging from accounting services. In such circumstances the provisions of ES 5 in relation to accounting services are likely to apply, including the prohibition in paragraph 127 that accounting services are not provided by audit firms to audited entities that are listed companies or significant affiliates of listed companies.”

Does this mean that by engaging in apparantly non-Audit related work in 2011, a Large Audit Firm could accidentally end up in the position where it would be forced to resign a very high fee Audit in a couple of years time because of a low value piece of Tax work. Worse still, is that set in stone now? Usually a big firm could step back from the tax work to retain the audit, but in this istuation it appears that the Tax work could not be undone.

All in all, it makes iXBRL services in the UK seem a very tricky decision to opt into.

So what can I say from months of client meetings, and from the feedback received after the HMRC event at Chelsea?

Firstly, people are still in shock. Every chance possible people keep on asking `is it really going to happen?`. All last year (2009) clients were just assuming that the project would be pushed back. In January 2010 there was a brief flurry after the regulations were officially laid, but it didn’t last. People were then anticipating a change of government, and were convinced that a new administration would alter things. In fact, I still think some people still harbour hopes that iXBRL filing will somehow just go away. To those people I always refer them to the back of the Carter report (page 37) where they can see a projected cost saving approaching half a billion pounds. I cannot see any goverment of any flavour removing that kind of cost saving from their budgets – it’s here to stay!

So then it’s down to how people react to the issues. There are some broad splits still based on organisation type and appetite for change, that also interacts with the uncertainty on Accounting Standards. Firstly, take the Top Accounting Firms. For the Big 4 certainly, and possibly others in the Top 10, Conversion is there primary focus. For them there is a large supply of Tax Only engagements that preclude an Accounts Production process change, and so an iXBRL document generation from Word, Excel or PDF is paramount.

Other Accounting Firms may have a small amount of Conversion work, but primarily their engagements are integrated Accounting and Tax engagements & an altered Accounts Production process is the key. For Large corporates Accounts Production is probaly the end game, but in the short term there is an even split between those gearing up to change process, and those embracing Conversion as a short term option.

The last influence on all of this is the demise, or otherwise, of UK GAAP. With an expected change over in as little as two years, some Corporates were inclined to look at outsourcing `whilst the dust settled` and to then think about in house solutions after converting from UK GAAP to IFRS (or variant). With that probably being pushed out to three years, and now with speculation of a need to pass a cost benefit analysis before it is phased out (see article here at AA), perhaps the balance will swing back again.

Of course, the last thiing to note is that for the majority of clients, this is still being seen as a Tax initiative. With no iXBRL filing of Full Stat Accounts to Companies House, and no mandation on the horizon short term, Finance Departments can be loathed to engage which is making take up very slow going in many Organisations. It is only the far-sighted few that are taking the visionary approach of end-to-end joined up compliance. Who is right, only time will tell.

Back to the sample tagging. This is actually a pair of accounts which have been layed out in Excel to show likely accounts entries, and then have columns to the side that show the likely/expected tag that the data item would be tagged against. It is not a `tagged document` nor an iXBRL file.

The first file, AAAAA Limited, shows just short of 800 rows of data in my spreadsheet editor (Open Office, since you ask). It is colour coded by HMRC to make life simpler for the person reviewing the document to match data to tags, and minimum tagging vs full tagging is identified by italics. I thought I wouldgive you an indication of how complex this appears to be, but the task of counting data points / tagging tasks is not as simple as I may have hoped withouth the actual instance document.

Some of the early information, such as company registration number, registered offices, directors & auditors have a one-to-one `mapping` from the data to a taxonomy tag – e.g. company registration number is `tagged` as uk-bus:UKCompaniesHouseRegisteredNumber. But it is never quite that simple. The registered office address is mapped into `tags` for address line 1, town & postcode but then has to have the further `dimensionality` data of uk-bus:EntityContactTypeDimension=uk-bus:RegisteredOffice added to identify which sort of address it is.

I also noticed that skipping fown to the income statement area that whilst we have a two column layout for the P&L and the B/S, the sample `tagging` only indicates the tags, not other attributes of the data. For instance, Cost of Sales in the P&L is shown next to uk-gaap:CostSales, but the need to select Current Period or Prior Period as an attribute is not highlighted in the document.

All these caveats on one side (and I haven’t even gone into the tuple column yet), I can tell you that the total number of `tags` and `dimensions` referred to in the example doc is 266. How does this sit with the HMRC estimate that a manual tagging approach will take `a day or two`?

Well some parts of manual tagging look straight forward enough, so long as your tool has a text search. Work through the directors report and you will find paragraphs headed up `Principal Activities and Business Review` and `Credit Risk` for example. These have to be `tagged` against the taxonomy items uk-bus:DescriptionPrincipalActivities and uk-gaap:DescriptionCreditRiskExposureManagement. A simple tagging like this cannot surely take more than a minute? Highlight the block of text, open a taxonomy browser window, search for the key words or browse through the taxonomy Directors Report secton.

If it was all that straight forward, then 266 minutes would same fair – less than 5 hours and not far off the lower estimate from HMRC. One could even argue that once you get proficient using a tagging tool, that a whole minute may be over generous for the simple tagging of a block of text. However, it is not all that simple.

Take the P&L and B/S. For each of those items, you have to tag 2 data points not 1 – both the current period and the prior period against the appropriate taxonomy item. In AAAAA Ltd, that’s 28 extra data points to add in; another half an hour. And once you continue into the notes section you’ll find plenty more 2 column sets of information that push the tagging total up – by another 105 extra data points, adding the best part of a further 2 hours.

My total is now up to 399 `tagging acts`, and therefore stands at 6 hours 39 minutes by my rule-of-thumb mechanism. One to two day per set of basic accounts does therefore sound like a reasonable estimate. The question is, at what point does the effort and risk become too great & a software solution to either pre-tag or to generate your stat accounts from scratch, become appealing?

I) XBRL is a Global Standard for applying structure to data to convey machine readable meaning to electonic information. iXBRL is a way of applying cosmetic information to XBRL data so that it becomes human readable too, without destroying the machine readable information.

II) iXBRL is a bit like a piece of paper, and XBRL is like using a magic highlighter to identify bits of information for the computer

III) iXBRL is just another format you have to use to submit to HMRC. What it is, is irrelevant. It’s just a way of submitting your tax return calculation & supporting accounts