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Transcript of © Grant Thornton International. All rights reserved. How XBRL makes compilation and preparing...
© Grant Thornton International. All rights reserved.
How XBRL makes compilation and preparing financial statements / tax filings easier and cheaper
A new role for the intermediair
Thursday, 25 June 2009
Drs H.W. Knoop RA
© Grant Thornton International. All rights reserved.
Introduction
– Developments in the Netherlands– Covenants– Control Methodology– Working processes within GT– Some recommendations
© Grant Thornton International. All rights reserved.
Developments in the Netherlands
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
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Former situation: more differences than similarities
Financial Statements
• Principles based on Dutch GAAP• True and fair view• Disclosure requirements• Models for financial statements• Requirements by law (e.g. filing)
Tax return corporate income
tax
• Principles based on tax principles• Prudence• Influenced by politics• Additional tax disclosures• Tax formalities
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Desired situation: Same principles and requirements - 1
Financial statements
Tax return
corporate income tax
• 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
Which changes are required by government:
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Desired situation: Same principles and requirements - 2
Balance sheet (filing)
Banking(Short)
Tax return
FS on taxprinciples
= Balance sheet (filing)
= (short) Tax Return Corporate Income Tax
= Financial Statementson tax principles
= Banking reporting
= Total integration
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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
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(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
Restructuring and reimplementation of financial system
Confidentiality rules
Liability (client versus audit firm)
Expectations client benefits
GO
NO GO
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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
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Desired situation: Control Methodology
9. Receive
confirmation
8. Send XBRL doc
7. Validate XBRL doc
6. Generate XBRL doc 5. Check data
insource system
4. Adjust data and
aggregate in source system
3. Mapping to taxonomy
2. Extend taxonomy
1. Publication / implementationnew taxonomy
Qualityassurance
Mapping control
Data consistency control
Validation control
Send control
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A number of Control measures
Control measures
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
Reporting all non-mapped accounts
All non-mapped accounts are highlighted in red
Change management procedure for chart of accounts
Step 6 Step 7Step 5
Send XBRL doc
Step 8Step 3
Validate XBRL doc
GenerateXBRL doc
Check data in source system
Mapping to the taxonomy
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Working processes within GT?
ClientG/L
Financial system
Report generator
Tax software
StatutoryFinancial
statementsFinancial
statements (filed)
(short)Tax return
Banking reports
Dutch Statistics
CLIENT
PORTAL
Electronic working processes
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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
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Questions?
Hanneke KnoopEmail: [email protected]