Tracey Glacken from Glacken Accountants discusses the impact of iXBRL on the work of an accountant in association with Sage.
Phase 1 of iXBRL has been in place since 1st October. This phase applies to customers of Revenue’s large cases division filing their corporation tax returns. By 31st May 2014 customers of this division will have to file their corporation tax returns using this method where their accounting period ends on or after 31st July 2013.
Phase 2 will be introduced on 1st October 2014 and all corporation tax customers (bar those with an exemption) will have to file their corporation tax returns using iXBRL for accounting periods ending on or after 31st December 2013.
To be considered for an exemption a company must meet all three of the following criteria:
(1) The balance sheet value of the company does not exceed €4.4 million
(2) Turnover of the company does not exceed €8.8 million
(3) The average number of persons employed by the company does not exceed 50.
The next phase of iXBRL will be introduced in 2015 and it is expected all corporation tax cases will be included in this phase.
What does iXBRL mean for the accountant?
As an accountant filing a tax return on behalf of a client, iXBRL will bring some changes to filing a return on ROS. The accounts menu pages will no longer have to be completed on Form CT1.
Also, ‘tagging’ has been introduced. Tagging involves applying computer related tags to business data. This allows the data to be analysed and automatically reanalysed by software. Tags such as stock, creditors, gross profit, etc can be identified. Tagging can be done manually or there are specialised software programmes which allow automatic tagging. Items which need to be tagged within the financial statements include Directors Report, Auditors Report, Profit & Loss Accounts, STRGL and notes. The Revenue has stated that this list is not exhaustive.
iXBRL will not change any accounting standards and all Financial Statements will continue to be prepared under current GAAP and IFRS’s. There will be no change either in the presentation of information to the Companies Registration Office.
If you act as an accountant or agent for a company in the large cases division (LCD) then they should have received correspondence from the Revenue advising them of their obligation to file using iXBRL. If you are unsure whether a client falls into this net then you can contact the support section at 01- 8972801 and quote your TAIN number. Revenue will then confirm your client’s obligations.
Only time will tell whether iXBRL is another administration exercise imposed on accountants or whether the information gathered from it can be used by Revenue in a meaningful manner. For those accountants who have previously used manual accounting systems they may find that the new ‘tagging’ system is a time consuming exercise. For others they may have the added expense of investing in a software package which will assist them with automatic tagging. I’m sure we’ll all be eagerly awaiting Revenue’s report on how the system is operating.