Transcript Connecting with XBRL

Enhanced Business Reporting
Al Anderson,
Senior Vice President, Member and Public Interests
AICPA
AGENDA
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Why Enhance Business Reporting?
Elements of Enhanced Business Reporting
Conceptual Framework
Special Committee On Enhanced Business Reporting
Mission
Collaborative Consortium Approach
Desired Consortium Representation
Draft Consortium Structure
Consortium Strategy: Leveraging Existing Structures
VMRC Structure and how VMRC will Contribute to
Enhanced Business Reporting
How XBRL will Contribute to Enhanced Business
Reporting and the Role of XRBL in the Corporate
Reporting Supply Chain
High-Level Timeline
WHY ENHANCE BUSINESS REPORTING?
 Current reporting model no longer sufficient
 Not timely -- it’s after-the-fact information
 Not informative enough
 Ignores many factors of performance
 To date -- calls for change and some action
 Time is NOW for coordinated action
WHY ENHANCE BUSINESS REPORTING?
Business Reporting: A Changing Dynamic
Historical Financial
Statements
Past
Lagging indicators…
 One size fits all
(GAAP)
 Ignores nonfinancial measures
 Reports results of
past decisions
Enhanced Business
Reporting
Present
Future
Leading indicators…
 Tied to mission,
vision and values
 Tied to factors
critical to success
 Moves decision
criteria to forefront
WHY ENHANCE BUSINESS REPORTING?
Business Reporting: A Changing Dynamic
Historical Financial
Statements
Past
Lagging indicators…
 Periodic
 Historical
 Cost-basis
 Financial only
 Statements
 Looking backward
Enhanced Business
Reporting
Present
Future
Leading indicators…
 On-demand
 Real-time/future
 Value-basis
 Comprehensive
 Custom reports
 Looking forward
ELEMENTS OF ENHANCED BUSINESS REPORTING
CONVERGENCE
TO “NEAR
REAL-TIME”
SCALABLE
System
Reliability
Corporate
Accountability
Understandable
Disclosures
Financial
and NonFinancial
Measures
Information
Dissemination
CONCEPTUAL FRAMEWORK
5 Elements
Technology
Business
Information
Information
Dissemination
XBRL
Financial &
Non-Financial
Measures
VMRC
Understandable
Disclosures
Foundational
Concepts
Deployment
System
Reliability
Corporate
Accountability
•Standards Setters
VMRC
•SEC Plain English
•FASB Projects
•Continuous Audit
•Trust Services
•COSO ERM
•OCEG
•GRI
SPECIAL COMMITTEE ON
ENHANCED BUSINESS REPORTING MISSION
I: Identification
of key
stakeholders
whose
collaborative
involvement is
critical to
successful
development &
implementation
MISSION:
To establish a
consortium of
investors,
creditors,
regulators,
management, &
other stakeholders
to improve the
quality &
transparency of
information used
for decision-making
II: Overarching
goal of making
better
information
available to
investors &
creditors,
helping them to
see
organizations
through the eyes
of management
COLLABORATIVE CONSORTIUM APPROACH
 Work collaboratively
 Consortium-based
 Globally focused
 Comprised of key stakeholders of enhanced business reporting
 Build consensus
 Help define migration paths to drive adoption by
participants in the corporate reporting supply chain
DESIRED CONSORTIUM REPRESENTATION
IMPLEMENTATION of enhanced business reporting
can only be achieved through a collaborative effort
including the following stakeholder groups:
 Government/Regulatory Agencies
 Investment and Lending Community
 Public and Private Companies and Industry
Associations
 Accounting Firms and Associations
 Technology and Software Enablers
 Academia and Researchers (Think Tanks)
DRAFT CONSORTIUM STRUCTURE
Operating Committee
Advisory Board
(Champions/Visionaries)
EBR
Management
Supply Chain
Communities
Producers
Industry
EBR Framework
Deployment
Groups
Private Companies (1)
Info. Dissemination
Industry Assns. (3), FEI
Standards Process
(To be Organized by
Industry Sectors)
Public Companies (4)
System Reliability
Corp. Accountability
Und. Disclosures
Consumers
Regulators (4)
Investmt. Community (5+)
Fin. & Non-Fin. Meas.
Lending Community (1-2)
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Rating Agencies (1)
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Enablers
Accounting Profession (5)
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Technology Enablers (2)
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Other Enablers (2)
CONSORTIUM STRATEGY:
LEVERAGING EXISTING STRUCTURES
Deployment
Groups
Information
Dissemination
System
Reliability
Continuous Assurance Lab
Corporate
Accountability
Understandable
Disclosures
Financial & NonFinancial Measures
…
Value Measurement & Reporting Collaborative
VMRC CONSORTIUM STRUCTURE
VMRC Board of Directors
VMRC Members
Accounting Institutes
Research Working
Group
Framework Working
Group
SAICA
Research is Being
Conducted in Each of
the Areas Below
Across Multiple
Industry Sectors:
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Innovation
Pharmaceuticals
Human Capital
Natural Resources
Customers/Clients
Telecom
…
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AICPA
CICA
Accounting Firms
Grant Thornton
D&T
McGladrey & Pullen
…
Business Community
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The Framework will
be Customized by
Industry Sectors,
Including the
Following & Others:
HOW VMRC WILL CONTRIBUTE TO
ENHANCED BUSINESS REPORTING
 Goals:
 Identify best practices.
 Debate existing concepts.
 Test existing and new
concepts.
 Modify concepts, as
necessary.
 Develop framework to allow
for comparability between:
 Organizations.
 Within Industries
 Create:
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Comparability
Consistency
Transparency
Principles/Criteria
HOW XBRL WILL CONTRIBUTE TO
ENHANCED BUSINESS REPORTING
 Enables custom reporting
 More precise, clear, consistent reporting
 More timely, accurate, useful data for decisions
 Less burden on companies
 Greater interoperability of data
 Accelerates adoption of enhanced reporting
HOW XBRL WILL CONTRIBUTE TO
ENHANCED BUSINESS REPORTING
 Lowers cost of e-filing initiatives
 Enhanced functionality of processes
 Validation
 Compliance with business rules
 Linkage from reports to other resources
THE ROLE OF XBRL IN THE
CORPORATE REPORTING SUPPLY CHAIN
New
Processes
Today
XBRL for Financial
Statements
XBRL for G/L
Journal Entry
Reporting
Business
Operations
XBRL for Business
Event Reporting
Internal
Financial
Reporting
XBRL for Audit
Schedules
External
Financial
Reporting
Trading
Partners
Investment
and Lending
Analysis
XBRL for
Credit Filings
Financial
Publishers
and Data
Aggregators
Companies
Participants
XBRL for
Regulatory Filings
Management
Accountants
Auditors
Software Vendors
Regulators
Investors/
Creditors
HIGH-LEVEL TIMELINE
Develop conceptual framework
for enhanced business
reporting and prototype report
Strategic
Planning
First meeting of
Special Committee on
Enhanced Business
Reporting
Invitations extended
to desired consortium
participants: sales &
negotiation phase
June
2003
September
2002
January
2004
January
2003
Special Committee on
Enhanced Business
Reporting approved
by AICPA BOD
Consortiu
m
launched
June
2004
Champions
identified,
contacts
initiated
Communications
plan launched
Consortium
Launch
Planning
QUESTIONS?