XBRL-US

XBRL-IAS

Internet World, December 2001 Internet World 12-2001 XBRL Neal Hannon, XBRL.org

Bryant College XBRL Educational Resource Center

What Does XBRL Do?

The purpose of XBRL is

“to enhance the flow of financial information through the creation of a globally useful language in which to describe financial facts and concepts.”

David vun Kannon XBRL is uniquely positioned to provide mobility and transportability to financial and business facts.

Financial Professionals involved in Auditing, Consolidations, Mergers, Tax, Not-for-Profit, internal And business reporting will all be affected by XBRL.

Why is the Finance Profession Involved in XBRL?

XBRL will soon become a dominant method of handling business reporting Other areas of business are also moving to XML enabled information. (HR, CRM, ERP, Insurance, etc.)

CORPORATIONS

need to understand how business changes with the introduction of XML, Web Services and the rapid movement of information from computer to computer

The Case for XML..

 XML - a computer markup language that is extensible (flexible … can be added to)  XML is actually a bare-bones set of syntax rules to markup any kind of text and data  XML provides the structure of the text or data  XML describes to humans & to computers what the data is … not how to display it XML has become the fastest growing technology for information transportation and exchange the world of computing has ever seen.

Business Integrator Magazine

says that nearly nine out of every ten enterprises claim that XML will be an important technology for their IT strategies in 2002.

The Case for XBRL…

Arthur Levitt, Former Chairman, SEC “

I would like to see you take your XBRL project a step further , providing account classifications for companies in Common industries. In short, I challenge you to turn all of this data into meaningful information for investors.”

The Case for XBRL…

Business Week, November 5, 2001

SEC Chairman Pitt complains that financial Reports are backward-looking, hard to understand, and don't highlight the Information investors need. Some of the improvements he is considering:

SLICE `N' DICE Accountants are developing XBRL , a way of coding financial reports on the Internet, that will let investors download and manipulate companies' numbers any way they like

The Case for XBRL

Financial Professionals will need to collect, interpret and report data in many different XML dialects XBRL provides a bridge not only to financial statements, but to all business reporting.

The Case for XBRL

“Do your main job first; get the financial statements right, then tackle enterprise data integration. But not until the integrity of the financial statements are at the highest level possible. The SEC is a strong supporter of increasing financial statement transparency.” Lynn Turner, former chief accountant for the SEC

How XBRL Works

Improves the way companies -- and applications -- share business reporting information

1. Client Specific Data 3. XBRL information flows freely across the Internet or VPN, LAN and WAN 5. XBRL data can be used in applications B or other comparable applications

Financial data

XML/XBRL translator Common XBRL Vocabulary XML/XBRL translator

Loan Analyzer

Client COA to Bank Taxonomy 2. Application data is converted into a common XBRL vocabulary Bank Taxonomy 4. XBRL-tagged data is mapped into applications specific data

What software ‘sees’ is the differentiator and drives benefits

XBRL Business Uses

Internal Uses include:

Account analysis Balanced Scorecard Automated exception reporting Wireless, PDA Cell Phone

The internal use of XBRL is just beginning to be explored, brought on by XBRL for General Ledger in public beta. New XBRL releases are compliant with the latest version of W3C’s XML Schema

Consider External Financial Reporting

How much of this painting would be needed to represent $$ spent on external financial reporting for a major US corporation last year compared to total spending?

Maybe 1%???

Can you guess why some companies are not thrilled with using XBRL for external reporting?

XBRL Business Uses

External Uses include:

SEC Filings IRS and State Tax Filing Annual Reports

Creditor Reports

Wireless, PDA Cell Phone Externally, XBRL focuses on the production of GAAP financial statements for the business financial reporting supply chain. The external focus of XBRL is evident by the heavy participation in XBRL.org by the AICPA and Big 5 Accounting firms

XBRL International

International Accounting Standards and Major Countries are changing the way Accounting is conducted world-wide Hot spots of development include Australia, Singapore, Germany, Japan, followed by Canada, the Netherlands, Spain, South Africa, Hong Kong, Great Britain, and the Scandinavian countries.

“ “

Stig Enevoldsen

single world-wide accounting language.”

Sir David Tweedie (current IASB Chairman) The mission of the newly-created IASB …is to increase the transparency of financial reporting by achieving a single, global method of accounting for transactions -- whether in Stuttgart, Sydney, Seattle or Singapore.

The Vision

To produce High quality, Transparent, Comparable, General Purpose Financial Reporting to International Accounting Standards Using one accounting language One transaction methodology Which are useful for making economic decisions.

The Vision for XBRL Just do it Electronically in a binary environment With the Seamless Transfer Of Financial Information In a known state Without Human Intervention

Many Human Presentations One Fact

in XBRL one fact with many labels For example profit / non profit organizations

John Turner Senior Project Manager

Australian Prudential Regulation Authority

XBRL@APRA: Data collection, management, exchange and dissemination using the XBRL e-standard

Why XBRL?

• Build once - use many times • Encourage end-to-end integrity • Universal exchange format • Standards

always

beat proprietary development!

Background

•

Initial problems in our organisation:

– –

New agency inherited multiple legacy systems Information poor - data rich

–

Very complex data structures

• –

Heavy dependence on a small number of staff

–

Poor form design

–

High provider burden - overlap between government agencies Led to the “Statistics Project”

Project Objectives

•

APRA will provide its staff with accurate, timely and relevant information about regulated entities; and

•

APRA will act as the central repository of financial information about regulated entities

Institutions Modernised, harmonised collections Supervisors receive standard reports and powerful ad-hoc analysis tools RBA ABS Central Collections with Secure Electronic Feeds Benchmark data for regulated institutions Aggregate data for community External Access

The old way...

Trial Balance Cash 100 Bills 9893 Bonds 982 1. Attempt to reconcile 15 different reports from 9 different sources...

2. Use a different data entry (or hard copy) mechanism for each user APRA, ABS, RBA, Auditors, Stock Exchange etc etc Repeat for each user of the data 3. Place results on a diskette and mail off to appropriate user… hope that they don’t find the internal inconsistencies

The new way, today...

1. Financial data is sucked out of the General Ledger and Risk Management Data Warehouse….

3…that document can be imported into APRA’s D2A application, validated, encrypted and...

GL DW 2…and dumped into an XBRL document in accordance with the accounting standards and prudential standards...

The new way, today...

4…securely transmitted to APRA via the web, e-mail or disk...

APRA Analysts Management Publications 5…and then passed on in XBRL form to the RBA and ABS.

GL DW

What about tomorrow?

• APRA/ABS/RBA • ASIC?

• ATO?

• ASX?

• S&P?

• US FDIC • UK FSA?

• Own Web pages

Business Payoffs

• • Immediate

: avoid overlap between collections of three agencies that use these data

• Longer term

: build once, use many times based on single industry standard. This means that:

– – – – – –

Stock Exchanges Market Analysts Securities Regulators Tax Authorities Ratings Agencies and other users of financial disclosures all reap the benefits.

Importance of Standards

•

The APRA/ABS/RBA agreed data requirements cover prudential data, macro prudential data, monetary aggregates and data from financial institutions for development of financial and national accounts

•

Many of these data items will be covered by the forthcoming official Australian XBRL accounting taxonomies.

•

This will mean they can be extracted directly from institutional general ledgers or other similar systems

Do You Need to Understand XML?

Yes

No

• Basics of XML are needed to understand how business events are captured and stored • XML basics will be a core business skill soon. • XBRL is valid XML • This is Accounting, not computer science • I don’t have the time to fool with XML, I need to learn it first.

• XBRL will soon go “under the covers” so I can ignore it.

XBRL Market Activities

• MSDW SEC EDGAR filing • Singapore and Australia (APRA) efforts • XBRL Academic Competition • “XBRL Essentials” and “Introducing XBRL: Decision Making in a Digital Economy” • Vendor support for XBRL • Jurisdictional Activity/Status

Vendor Implementations

• • • • •

ACCPAC CaseWare Creative Solutions e-Numerate eKeeper

•KPMG’s

“Columbus”

•KPMG Consulting •Navision •Newtec •PPC •XBRL Solutions •SAP •FRS (South Africa) •

FRx (Microsoft)

•

Hyperion

•

IBMATRIX

•

Syspro

XBRL Media Summary

 213 articles for 12 months ended August 31, 2001 generating over 36 million impressions 1  Equivalent to over $6.1 million in annual advertising 2  Generated stories in major financial publications: CFO, American Banker, Times of London, Barron’s, Financial Executive, Financial Times, Financial Director, Securities Industry News, Securities Week, Wall Street + Technology, Pensions & Investments  Secured major wire stories: Dow Jones, Bloomberg, Reuters, Newsbytes News, ABIX  24 total news releases issued by Consortium and AICPA

1-Does not include wire stories or Web stories which have virtually limitless impressions. 2-Based upon ad dollar equivalents extrapolated for a one-year period; does not include ad dollar equivalents for wire stories or Web stories.

Books, Articles, Videos

• XBRL Essentials, Hoffman and Strand, June 2001 • Introducing XBRL, Hannon and Coffin, January 2002.

• AICPA E-business Update Video and Workbook, 2001.

• IMA National Conference Video • Over 300 Articles, Special Section in Strategic Finance Magazine (June 2001), Monthly XBRL Column • SoftwareAG XML video

www.softwareag.com

Neal Hannon

[email protected]

XBRL Education Work Group chair IMA IT Chair Photo and Creative Credit to Dave Garbutt, FRS, SA