1 / 14

XBRL Simplifies Financial Statement and Tax Filing Process

Learn how XBRL streamlines the compilation and preparation of financial statements and tax filings, making them easier, cheaper, and more efficient. This article discusses the development and implementation of XBRL in the Netherlands, the advantages of using XBRL for financial statements and tax returns, and recommendations for integrated software and electronic working processes.

bishopj
Download Presentation

XBRL Simplifies Financial Statement and Tax Filing Process

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. How XBRL makes compilation and preparing financial statements / tax filings easier and cheaper A new role for the intermediairThursday, 25 June 2009 Drs H.W. Knoop RA

  2. Introduction • Developments in the Netherlands • Covenants • Control Methodology • Working processes within GT • Some recommendations

  3. Financial Statements (filing) 2007 Dutch Statistic Reports Tax return VAT Tax return Pay-roll taxes 2008 Financial Statements on tax principles Tax return corporate income tax • 2009/ Banking taxonomy (extension) • 2010 Tax return income tax DTP XBRL for ALL companies in the Netherlands Developments in the Netherlands

  4. Former situation: more differences than similarities • Principles based on tax principles • Prudence • Influenced by politics • Additional tax disclosures • Tax formalities Financial Statements Tax return corporate income tax • Principles based on Dutch GAAP • True and fair view • Disclosure requirements • Models for financial statements • Requirements by law (e.g. filing)

  5. Desired situation: Same principles and requirements - 1 Tax return corporate income tax Financial statements Which changes are required by government: • Authoritative taxonomy • Minimum position for financial statements included • Both commercial and tax accounting principles included • Not in taxonomy: then not required • Dutch law was changed • FS on tax accounting principles possible • Filing of instance documents possible • Guidance on tax accounting principles • Style sheet

  6. Desired situation: Same principles and requirements - 2 Balance sheet (filing) (Short) Tax return Banking FS on tax principles = Balance sheet (filing) = (short) Tax Return Corporate Income Tax = Financial Statements on tax principles = Banking reporting = Total integration

  7. More developments: covenants Covenants between several audit firms/software companies and Ministries: • Financial statements (filing)  Ministry of Justice • Short tax return (corporate  Ministry of Finance/ income tax) tax authorities

  8. (Dis)Advantages covenants with XBRL Final tax assessment when filed 70% less than normal tax return No inspection at client No differences FS and tax return Potential efficiency benefits NO GO • Restructuring and reimplementation of financial system • Confidentiality rules • Liability (client versus audit firm) • Expectations client benefits GO 8

  9. Requirements included in covenants • Good quality procedures within audit firm • Meta-supervision by tax authorities • Determination of the profit (read: financial statements) is based on ISA's (principle based) • No additional tax procedures are instructed • All tax issues are upfront proactive discussed with tax authorities • Confidentiality issue • Materiality issue

  10. Desired situation: Control Methodology 1. Publication / implementation new taxonomy Send control 9. Receive confirmation 2. Extend taxonomy Mapping control 8. Send XBRL doc Quality assurance 3. Mapping to taxonomy 7. Validate XBRL doc 4. Adjust data and aggregate in source system Validation control 6. Generate XBRL doc 5. Check data in source system Data consistency control 10

  11. A number of Control measures Step 3 Step 5 Step 6 Step 7 Step 8 Mapping to the taxonomy Check data in source system Generate XBRL doc Validate XBRL doc Send XBRL doc Control measures • Reporting all non-mapped accounts • All non-mapped accounts are highlighted in red • Change management procedure for chart of accounts • Audit trail visible (edit/ approval/ submit) • Segregation of duties (data entry/ review/send) • No manual changes in instance document • Inconsistency in reports (presentation) • Validations (e.g. Roll-up, zero-balancing, reconciliations etc.) • Blocking trans-mission in case of inconsistencies • Error reporting • Right version of taxonomy used • Right context • Status versions (draft – final) • Encrypted saved and sent 11

  12. Working processes within GT? Client G/L Statutory Financial statements C L I E N T P O R T A L Electronic working processes Financial statements (filed) (short) Tax return Financial system Report generator Tax software Banking reports Dutch Statistics

  13. Some recommendations Integrated software: • Financial accounting, report generator and tax software integrated in one system • Link with latest version of taxonomy • Import and export features of XBRL • Only extensions on taxonomy possible • Validation rules in software • Consolidation rules Electronic working programs Client portal • Data sharing with client • Authorization process of documents included

  14. Questions? Hanneke Knoop Email: hanneke.knoop@gt.nl

More Related