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XBRL: Implementing XBRL in the international environment Daniel Roberts National Director of Assurance Innovation Chair, XBRL-US Steering Committee May 9, 2006 Agenda • What is XBRL, and Why does XBRL matter • What is happening Internationally? – Investment markets – Governmental activity • Fundamentals for identifying an XBRL project • Implementing an XBRL project/environment – Regulator – Internal reporting – NGO / Funding Agency 2 What is XBRL XBRL is to the printed annual report, what the internet is to the printed Yellow Pages. 3 What is XBRL? • An industry standard for the publishing, exchange and analysis of financial reports and data. – Information is entered only once using an Internet-based tool for preparing and publishing all financial documents with automatic conversion to various formats – Information may be reliably extracted and analyzed across companies with no manual intervention – Supports current accounting standards 4 What is XBRL? Processes Processes Business Operations Internal XBRL Financial Ledger Reporting External Investment XBRL Financial and Lending External Reporting Reporting Analysis Financial Publishers and Data Aggregators Companies Participants Participants Trading Partners Management Accountants Auditors Software Vendors 5 Regulators Investors Academics What is XBRL? XBRL adds to XML: Multi dimensional financial Definitions data representations cashCashEquivalentsAndShortTermInvestments Financial reporting vocabularies (taxonomies) Aliases and other definition relationships Presentation References Receivables / Les créances/… GAAP I.2.(a) Instructions Ad Hoc disclosures Mathematical relationships between concepts Flexibility about how to present items to users Structure for authoritative policies and guidance Label XBRL Item “200” US $ FY2004 Budgeted Formulas Cash ≥ 0 Calculations Reporting apps need these even when using XML Cash = Currency + Deposits 6 The Gartner Hype Cycle: 2004 7 The Gartner Hype Cycle: 2005 8 XBRL Taxonomy Growth Public Taxonomies February, 2005 US GAAP C&I This does not include any US GAAP Bank private taxonomies such as US GAAP Ins those prepared for statutory SEC Certification purposes. Mgmt Report Accountants Report MD&A Nov, 2005 June, 2004 General Ledger IFRS GAAP NZ GAAP July, 2005 UK GAAP China Framework January, 2004 IFRS GAAP UK GAAP 2.0 June, 2001 US GAAP Invest Mgt Canada GAAP General Ledger Time 2000 2001 2002 2003 2004 2005 2006 9 XBRL Tools Growth (Representative Listing) Tools FDIC Vendors DBI Financial Systems, Inc. FinArch FRS Global Financial Reporting & Analytics IDOM, Inc. Information Technology, Inc. Fidelity Regulatory Solutions Jack Henry & Associates Inc. Semansys Integrator Core Filings Semansys Analyzer Microsoft Business Solutions Snappy Reports FR Solutions J2R Batavia Data Driver Carthesis Semansys Metapraxis Adobe Deployment Manager DecisionSoft True North UBMatrix Automator Pro High Ridge Technologies IBS Open Digital Reporting Ipedo EII Software AG Covarity Hyperion Fujitsu XWand Fujitsu Oracle XBI Software IBMatrix SAP UBMatrix Converter Rivet Software XBRL Solutions UBMatrix Tool Kit SavaNet DynAccSys Xabra Caseware Semansys Composer Hitachi CBRP Hitachi Ximba Allocation Solutions Navision Creative Solutions Hitachi XiRute Edgar-Online IMetrix Time 2000 2001 2002 2003 2004 2005 2006 10 Agenda • What is XBRL, and Why does XBRL matter • What is happening Internationally? – Investment markets – Governmental activity • Fundamentals for identifying an XBRL project • Implementing an XBRL project/environment – Regulator – Internal reporting – NGO / Funding Agency 11 XBRL Jurisdictions DK S E NO FI BE NL RU IASB FR CA US IE U K S P IT D E C H I N KR HK PT CO JP CN BR SG AU AR SA NZ XBRL International Governance Board of Advisors Thomas Krantz (5 to 19 members) Being Established appoints Executive Committee* (7 members) International Steering Committee Chair: Kurt Ramin elects ISC chair after term expires member of 2nd Vice Chair Walter Hamscher Immediate Past ISC Chair Vacant Established Jurisdiction Representatives At Large EC Representation from ISC At Large Representatives CA Bill Swirsky DE Norbert Flickinger Vincent Bert Makoto Koizumi Executive Director Currently Vacant IASB Kurt Ramin JP Eiichi Watanabe NL Jan Pasmooij Walter Hamscher Michael Ohata John Turner NZ Mark Hucklesby UK Chris Rodgers US Daniel Roberts Olivier Servais Mike Willis Currently Vacant IR Conor O’Kelly SP Federico Florez Korea Key Provisional Jurisdictions UAE Belgium ISC Representatives AU Paul Phenix Denmark Sweden 14 France ISC Seat No Seat on ISC XBRL in Europe Jurisdictions Established Ireland Germany Spain The Netherlands United Kingdom Provisional Sweden Belgium Denmark France In construction Czech Republic Finland Hungary Poland Portugal Luxembourg In project Slovenia, Austria, Italy, Greece, Estonia, Switzerland, Norway, Malta + Turkey Tax Authorities CA IRS NO UK NL IE DE JP CN Tax XML Technical Committee recommends use of XBRL (Oasis-OECD) 29 Tax authorities AU NZ Pilot Committed 16 Financial Banking Regulators SE UK DK BE EU CEBS FR NL Portugal US ES DE LuX CN JP KR SG AU ZA Pilot NZ Committed 17 Exchanges & Equity Regulators OBX CSE LSE TSX EuroNext SEC KOSDAQ Deutsche Börse Lux Shanghai SWX Shenzen Tokyo Kore a Taipei Singapore Sao Paulo Johannesburg ASX NZSE Eval Pilot Live 18 Agenda • What is XBRL, and Why does XBRL matter • What is happening Internationally? – Investment markets – Governmental activity • Fundamentals for identifying an XBRL project • Implementing an XBRL project/environment – Regulator – Internal reporting – NGO / Funding Agency 19 Project Disciplines Project disciplines: – What do you want to accomplish – Who are the major stakeholders – Who is / are the champions at very senior levels – Professional disciplined project management is critical – XBRL is not a quick / easy fix Start with a couple of data streams – reports that are provided or required. Look for common information that is used or provided to multiple users. Look at processes that repeated. 20 Agenda • What is XBRL, and Why does XBRL matter • What is happening Internationally? – Investment markets – Governmental activity • Fundamentals for identifying an XBRL project • Implementing an XBRL project/environment – Regulator – Internal reporting – NGO / Funding Agency 21 Project Disciplines What do you want to accomplish • Stop duplication of reporting (Look for common information that is used or provided to multiple users) • Received data sooner • Publish data earlier • Improved data quality • All validity edits are met • Staff work per bank decreased • Financial Analysts finish assignments faster 22 Project Disciplines Who are the major stakeholders – FDIC/FFIEC/OCC – CEBS (COREP) Who is / are the champions at very senior levels 23 Project Disciplines Professional disciplined project management is critical XBRL is not a quick / easy fix – FDIC took 3+ years – COREP underway for 2 years – SEC expressed interest in September 2004 24 Agenda • What is XBRL, and Why does XBRL matter • What is happening Internationally? – Investment markets – Governmental activity • Fundamentals for identifying an XBRL project • Implementing an XBRL project/environment – Regulator – Internal reporting – NGO / Funding Agency 25 The world is getting smaller IFRSs Around the World RED = IFRS Approved ORANGE = Stated move to adoption YELLOW = Adapting to IFRSs 26 92 countries have approved IFRS Russia, Australia, EU are in Coming soon - Canada, Chile, China, … - India, Latin America, … Converging with USA and Japan FDIC / FFIEC / OCC • Three banking agencies developed the Central Data Repository (CDR) – Using XBRL to define and transport data – Receives, validates, stores – Distributes financial information • CDR launched on October 1, 2005 – Receive data sooner – Publish data one day after receipt – Improved data quality – Improved data validity – Staff work per bank decreased 27 XBRL at FDIC The CDR (Central Data Repository) Project FDIC / FFIEC / OCC • Three banking agencies developed the Central Data Repository (CDR) – Using XBRL to define and transport data – Receives, validates, stores – Distributes financial information • CDR launched on October 1, 2005 – Receive data sooner – Publish data one day after receipt – Improved data quality – Improved data validity – Staff work per bank decreased 29 FDIC / FFIEC / OCC How Does FDIC Measure Success? • Improved data quality – Legacy: 66% clean coming in – CDR: 95% of data ‘clean’, some accepted with explanations - banks include written explanations with submitted to explain data nuances – Result: Expectations of data are documented, required, and met • All validity edits are met – Legacy: 70% – CDR: 100% – Result: All data adds up accurately 30 FDIC / FFIEC / OCC 31 Other Public Sector (US) • August 2005: Established the Public Sector Adoption Working Group – Leanne Travers (Chair) • XBRL-US Public Sector Pilot Project Objectives: To identify public sector XBRL pilot projects To establish pilots throughout federal, state, local public sectors To establish pilots that reflect diverse use case examples of XBRL To establish pilots that are replicable across public sector spectrum To conduct an open, transparent pilot process 32 Other Public Sector (US) • May 2006: 5 Pilots in planning or underway (some pre-date August 2005), others in planning – – – – – U. S. Department of Treasury Pilot Project US Department of Interior, National Park Service Pilot Project US Department of Commerce, US Census Bureau Pilot Project Additional FDIC Projects (post-CDR project) Department of Housing and Urban Development, Office of Housing/Federal Housing Administration Pilot Project 33 CEBS & COREP • Building an XBRL Solvency Ratio taxonomy • Sponsored by the Committee of European Banking Supervisors • COREP: defining a COmmon REPorting framework around the solvency ratio (Based on Basel II, Pillar I) for credit institutions and investment firms under the European Union Capital Requirements. 34 CEBS & COREP Basel II European Law 9X,XX% Basel II compatible Directives 2000/12 & 93/6 Country 1 Country 2 Country 3 Transposition into national Legislation Country 25 National Regulation FSA 1 FSA 2 FSA 3 FSA 25 National Implementation Report 1 ---------------------------------- Report 2 Report 3 Report 25 ------------------------------------------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------- 35 XBRL challenge! CEBS & COREP Supervisor Bank Bank operations, controls…. Presentation, Analysis… IS Supervisory Risk Management Report Aggregator Operations Counterparties Collateral … ---------------------------- XBRL instance 36 Reception Reports Other data … … Dutch National Taxonomy Project • The Ministry of Justice and the Ministry of Finance in a joint effort intend to reduce the administrative burden of businesses by using XBRL to make the composing of reports and exchange of financial data easier. • Focuses on three important reporting chains: – Reporting of taxes; for instance profits tax, wage taxes, value added taxes (VAT) and Income taxes – Reporting of annual accounts – Reporting of economic statistics • Projected Savings to Dutch Business: 350 million euro 37 Agenda • Let’s Imagine: 38 Agenda World Bank USAID Aid project AusAID Custom reports are: • Expensive • Time consuming • Repetitive • Distracting from the real mission 39 ..other donors Custom reports are: • “easy to consume” Agenda World Bank USAID Aid project AusAID XBRL is: • Easy to “tag” • Cheap to produce • Keeps the focus on the real mission 40 ..other donors XBRL is: • “Heavier initial investment” XBRL is here, who knows where it will go XBRL is to the printed annual report, what the internet is to the printed Yellow Pages. 41