Transcript Why XML? - Bryant University

The Next Technology Revolution
XML
XBRL
XBRL Educational Resource Center
At Bryant College
Rhode Island Society of
Certified Public
Accountants
XBRL Education Co-Chair
May 17, 2001
Neal Hannon and Saeed Roohani
E-Mail: [email protected]
Phone: 401.232.6195
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Today’s Objectives
• Overview of XML & XBRL
• Show you how this technology makes doing EBusiness:
– Faster
– Cheaper
– Better
• Conclusion
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Find the best solution to connect the nine points
together with no more than four straight lines
without lifting your writing instrument.
What
assumptions
are you making?
If you do not assume that you cannot extend your
lines beyond the imaginary square formed by the
box the puzzle becomes easier to solve.
Henry Dudeney
was born 144 years ago – 10th April 1857
Dudeney is best known for his
publications of mathematical problems and pastimes,
some of which provoked serious mathematical research
“Everything
“that can be invented
“has been invented.”
Charles H. Duell
Commissioner of U.S. Office of Patents,
urging President William McKinley
to abolish his office, 1899
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Don’t assume that the lines must pass
through the center of the dots.
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Don’t assume that the line
must be thin.
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Just to prove I can do it with two lines.
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Don’t assume that the paper must be flat.
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If you rip the paper into nine segments,
you can stack them
and poke your point through all at once.
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Don’t assume that you cannot
crease the paper.
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Don’t assume that
the lines cannot extend beyond
the edge of the paper.
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Don’t assume that you
cannot
rip the paper.
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Is There A Problem?
From Evansville Courier and Press
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Let’s move up the Value
Chain
Transactions
Data
Information
Knowledge
Decisions
Transactions
Data
Information
Knowledge
Decisions
Transactions
Data
Information
Knowledge
Decisions
Transactions
Data
Information
Knowledge
Decisions
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Content—without Context
Searching for the word “Mercury” on the Web
can provide search results such as--
Hg
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• 47, 000+ hits, No Help
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Evolution to Web Services
Program the Web
Browse the Web
Web Services
Text Files
Innovation
Web Pages
FTP, E-Mail,
Gopher
Automation
Presentation
Connectivity
TCP/IP
Technology
HTML
XML
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XML
XML stands for:
eXtensible
Markup
Language
Universally accepted method of
exchanging information
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eXtensible Markup Language
• ……is a meta markup language the
World Wide Web Consortium (W3C)
considers a universal standard for
describing both structured data and the
behavior of applications that process the
language.
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What Is XML?
• “XML is a
platform-independent,
self-describing,
expandable,
standard data exchange format
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XML is Platform Independent
•
•
•
•
•
Windows
Unix
Macintosh
Mainframe
Linux
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XML is Self-Describing
• Example:
– <DATE>July 26, 1998</DATE>
• Describes the information, not the
presentation
• Format neutral
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XML is Expandable
• Whereas HTML has a fixed set of tags
– <H1>, <B>, <PRE>
• XML lets you create your own tags
– <sugary-substance>
– <Shakespearean-character>
– <cash-equivalent>
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How does it work?
• XML gives meaning to information through
the use of tags
<Customer>
<Name>Saeed Roohani</Name>
<Company>Bryant College<Company>
<Title>Chair, Accounting</Title>
<Age>29</Age>
</Customer>
Caution.. …Just because something is <tagged>.. Does not mean it is accurate?
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The XML Puzzle
XML
Document
Core
Schema
Industry Specific
Vocabularies
Company Specific
Vocabulary
Transformatio
n
Tools
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How XML Works
How XML Works
Improves the way companies -- and applications -- share information
Enjoys strong industry and vendor support
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What is ‘XML’?
• What XML is Not
– Not a religion.
– Not the solution to all world problems.
– Not a solution for all electronic commerce
problems.
– Not a solution to all legal-technology
problems.
• XML is a Tool
– XML is a Really Cool (Powerful) Tool!
– Like all tools, XML can be used wisely and
unwisely.
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Why is XML so Important?
•
•
•
•
•
Portable
Vendor neutral
Readable data format
More flexible and easier to use than EDI
All major software products are becoming
“XML” enabled
• Defacto standards for data exchange
• Enabling new levels of interoperability
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XML
• Widely expected to reduce cost of
publishing to the Net by as much as
50%.
• And by next year …
Gartner Group prediction
70% of all B2B transactions executed on
the Web will be done using XML.
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Who defines the tags?
• Tags are defined by industry consortiums
• Each industry’s standard tags are commonly
referred to as a taxonomy
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“Content in Context” (Industry-specific)
Auto Industry
Chemical Industry
Publishing or
Mythology
Music Industry
<CAR-MODEL>
<SYMBOL>
<GOD>
<RECORDLABEL>
Aerospace
<PROGRAM>
Astronomy
<PLANET>
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Who’s Building Taxonomies?
Accounting
Advertising Architecture
Automotive Banking
Communication
Economics
Education
E-Commerce
EDI
ERP
Financial
Healthcare
HR
Insurance
Legal
Music
News
Publishing
Real Estate
Retail
Science
Software
Supply Chain
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Defines Tags
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XBRL International is gaining strength
• XBRL activities occurring in—
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–
–
–
–
–
–
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United States
Canada
Australia
China & Hong Kong
Japan
Malaysia
New Zealand
Singapore
Taiwan
Germany
India
Ireland
Netherlands
Nordic Federation (Denmark, Norway, Sweden)
South Africa
Spain
Switzerland
United Kingdom
• And on a global level through the—
– International Accounting Standards Council
– International Press Telecommunications Council
– International Standards Organization
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XBRL International is gaining
strength
•
On a Global level through
the—
–
–
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International Accounting Standards
Council
International Press
Telecommunications Council
International Standards Organization
•
On a Country Level:
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United States
Canada
Australia
China & Hong Kong
Japan
Malaysia
New Zealand
Singapore
Taiwan
Germany
India
Ireland
Netherlands
Nordic Federation (Denmark,
Norway, Sweden)
South Africa
Spain
Switzerland
United Kingdom
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How we are organized – US Jurisdictional
Working Group
Chair
Communications
Christy Reichhelm (Microsoft)
Domain
Sergio de la Fe (KPMG)
Education
Neal Hannon (IMA, Bryant College)
Jenia Gorfunkel (S&P)
Liaison
Zach Coffin (KPMG)
Liv Watson (Edgar Online Inc)
Specification
David Vun Kannon (KPMG)
Luther Hampton (e-Numerate)
Strategy
Louis Matherne (AICPA)
Mike Willis (PwC)
Tools
Eric E. Cohen (PwC)
Web site
Geni Whitehouse (Navision)
Process
Mike Willis (PWC)
Object
Gary Gannon
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XBRL Impact
"The explosive growth of the Internet
is not only changing the way
companies conduct their business,
it also promises to forever alter the
way they communicate business
performance.”
- CFO Magazine, February 2000
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XBRL Documents
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XBRL for Financial Statements
XBRL for General Ledger
XBRL for Journal Entry Reporting
XBRL for Credit Reporting
XBRL for Performance Press Releases
XBRL for Risk Reporting
XBRL for Regulatory Filings
XBRL for Tax Filings
XBRL for Assurance Schedules
XBRL for Authoritative Literature
XBRL for “Business” Reporting
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Who’s Embracing XML now?
• Software developers
Using XML as the core technology for new products
• Database developers
Building XML support into their products.
• Industry groups
Deciding how information should be shared.
• Organizations
Investigating how to tie their inter and intra company processes
together.
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XBRL Support
“I would like to see you develop valuation models that result
in consistent, comparable and fair values of assets and
liabilities. I would like to see you hone specific, but plain
English definitions for the types of information you believe
should be included in public disclosure. 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.”
- Arthur Levitt, Chairman, U.S. Securities & Exchange Commission
October 24, 2000, at the Fall Council of the AICPA (Las Vegas, Nevada)
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• XML for Financial Reporting
• Enables a dramatic improvement in the processing
of financial reports
• XBRL documents can be—
–
–
–
–
–
Prepared efficiently
Exchanged reliably
Published more easily
Analyzed quickly
Retrieved by investors simply
to enable smarter investments
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Benefits
• XBRL is:
– NOT a new accounting standards but enhances
the distribution and usability of existing
financial statement information
– Enabler and an extension for relational
database functionality for all financial
statement information
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Problems XBRL Addresses
• Ineffective communication to investors
• Inefficient aggregation and analysis
• Inefficient creation of financial
statements
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Why XBRL ?
 Enable business reporting
that leverages the Internet &
XML
 Effective access and
analysis of business reports
 Improve corporate
communications with
stakeholders
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Who benefits
Process Benefits:
Lowering Financial Reporting Cost
• Today’s external reporting processes
– Rework and delay
– Ad hoc and non repeatable
– No path forward
Printed
Financials
Regulatory
Filings
Accounting
System
Web Site
Explanatory
Text
Tax
Return
Third Party
Information
Trade
Filings
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Who benefits
Process Benefits:
Lowering Financial Reporting Cost
• Common interchange format and storage is good
information management practice
– Reduces redundancies & discrepancies
– Repeatable processes using tools
– A platform for continuous reporting
Accounting
System
Explanatory
Text
Third Party
Information
Printed
Financials
Regulatory
Filings
Web Site
XBRL
Documents
Tax
Return
Trade
Filings
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XBRL: Interoperability & Multiple Uses
G/L Package
US GAAP
Financial
Statement
In English
ERP
XBRL
US GAAP
Financial
Statement
In Dutch
Custom
Developed
Systems
XBRL
US GAAP
Financial
Statement
to Print
Other
Sources of
Information
XBRL
Other
Sources of
Information
US GAAP
Financial
Statement
to the Web
Other
Sources of
Information
US GAAP
Financial
Statement
to Cell Phone
XBRL: Interoperability & Multiple Uses
G/L Package
US GAAP
Financial
Statement
ERP
XBRL
Custom
Developed
Systems
EDGAR
Filing
XBRL
Other
Sources of
Information
Tax
Filing
Bank
Filing
XBRL
Other
Sources of
Information
Investors
&
Creditors
Other
Sources of
Information
Press
Release
XBRL
Government
News
Agencies
And
Others
Once Every Event is tagged in XBRL…
G/L Package
IAS
Financial
Statement
in German
ERP
XBRL
Custom
Developed
Systems
XBRL
French
Tax
Filing
Canadian
Banking
Filing
Other
Sources of
Information
XBRL
Other
Sources of
Information
Investors
&
Creditors
US GAAP
Financial
Statement
In English
Other
Sources of
Information
EDGAR 10k
line item via
Cell Phone
XBRL
Government
News
Agencies
And
Others
XBRL Working Model: Planned Specifications
XBRL for G/L
Journal Entry
Reporting
Processes
Business
Operations
XBRL for Financial
Statements
Internal
Financial
Reporting
XBRL for Business
Event Reporting
External
Financial
Reporting
Trading
Partners
Investment
and Lending
Analysis
XBRL for
Tax Filings
Financial
Publishers
and Data
Aggregators
Companies
Participants
XBRL for
EDGAR Filings
Management
Accountants
Auditors
Software Vendors
Regulators
Investors
XBRL: not a Transaction
Protocol
What it is
• XBRL is merely a format to serialize complex,
structured financial data: e.g., statements, G/Ls.
• Therefore, it cannot replace OFX, ebXML,
ANSI X.12 Trans Set 821, OMG G/L Spec, ...
• Future message sets in those protocols could
include XBRL tagged data if they need to send
financial statements in the message body.
• XBRL provides a framework and an AICPA
approved vocabulary that can be extended to
many other reporting frameworks.
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XBRL: not an
accounting standard
• Means of communicating
– Current GAAP
– Current practice
• Flexible standard
– Future standards
– Future general practice
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XBRL Impact
"Coming down the road are standards like
XML and XBRL that take data handling
a major step forward from HTML, the
current web standard. With these new
standards, plus those for accounting, it
will be possible to scan a universe of
corporate data across the web and
extract, say, the chairman's report for all
companies with a certain market cap,
EBITDA, and gearing. …
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XBRL: A Fragment of a Raw Data


Raw Data in Spreadsheet…
Company
Financial
Statement
Line Item
Label
Year
Value
Coca Cola
Co.
Balance Sheet
CurrentAssets.Cashand
CashEquivalents
CurrentAssets.Cashand
CashEquivalents
1999
1611
Coca Cola
Co.
Balance Sheet
CurrentAssets.Cashand
CashEquivalents
CurrentAssets.Cashand
CashEquivalents
1998
1648
Same Raw Data in XML (XBRL) Format
<group>
<group type="CurrentAssets.CashandCashEquivalents">
<item period="1999">$1,611 </item>
<item period="1998">$1,648 </item>
</group>
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What software ‘sees’
is the differentiator
and drives benefits
(here is an example)
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Importance of Reporting
“…[W]hat excites the CEO is the ability
to know what the business is doing at
any given point in time, react quickly
to market shifts and competitive
threats and remain in tight control
while empowering employees to make
informed decisions more quickly.
Year End Earnings Release Call
August 10, 1999
John Chambers
Cisco CEO
”
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Best Practice
“The Virtual Close … has, in my
opinion, just as much impact
on a company’s future success
or lack thereof as the wellpublished e-commerce area.
Year End Earnings Release Call
August 10, 1999
John Chambers
Cisco CEO
”
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XBRL Impact
• “ … If Europe moves quickly to take up
these standards, it could give them an
attractive lead in the race to accessible
and comparative key data that would
stimulate investor interest. It would
undoubtedly spawn a plethora of
research tools that would be useful to
both private and professional investors.”
•
• - Investors Chronicle, August 9, 2000
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XBRL and the Emergence of ‘eStandards’
• E-Standards are fundamental
• HTML is the standard that enabled the web’s first
‘Big Step’
• XML is the web’s next ‘Big Step’
– Over 200 XML-Based Specifications and Protocols
exist, including—
•
•
•
•
RosettaNet – computer company supply chain and trading webs
OBI - Open Buying on the Internet - retail e-commerce
FpML - Financial Products (Derivatives, Swaps, FX)
ACORD XML - Insurance industry information exchange standards
derived from EDI.
– UN/CEFAC = EBXML
• XBRL is uniquely focused on financial reporting
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Standard .orgs
(reporting vs ‘e’)
Accounting / Auditing
Reporting
‘e-Business’






 W3C
 OASIS;UN/CEFAC
T (ebxml)
 xml.org
 RosettaNet
 ACORD
ASB
IASC
FASB
IFAC
SEC
Territory Institutes
CPAs participate / lead in these
What about these?
The range of what is under
development today………...
“Horizontals”
(Infrastructure)
there are others…..
HR
XBRL is uniquely focused on
Etc.
business reporting
CRM
CHEMX
FpML
ACORD
ANX
RosettaNet
“Verticals” (Industry Supply Chains)
there are others…….
XBRL Adds Reporting to E-Commerce
Tax
Regulators Investors
Creditors
Lenders Website
Aggregators
One
way
One
way
BUSINESS
ERP
G/L Packages
CRM
Transaction Creation
2-way
Suppliers
•Orders
•A/P
•Delivery
•Orders
•A/R
•Delivery
2-way
Customers
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XBRL Adds Reporting to E-Commerce
Tax
Regulators Investors
Creditors
Lenders Website
Aggregators
One
way
One
way
XBRL
BUSINESS
G/L Packages
ERP
CRM
BUSINESS REPORTING
Transaction Creation
2-way
Suppliers
(e-)Commerce
•Orders
•A/P
•Delivery
•Orders
•A/R
•Delivery
OTHER XML INITIATIVES
2-way
Customers
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XBRL - What
Key XBRL Components
• XBRL / XML Specification (XBRL.org)
– Global architecture/technology
• XBRL hierarchical vocabulary (jurisdiction/industry)
– Dictionary of terms by jurisdiction/industry sector
• Style Sheets
(preparer)
• XBRL enabled tools
(market)
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Key to our Success
 Market driven model
– Start simple, be inclusive
 Broad supply chain participation
 Members support XBRL
 Members do not compete on the “framework”
 Build structure & systems to support open
community & market development
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Steps in Technology Acceptance
Acceptance
Simplification/Tools
Taxonomy
Visionaries
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Financial Institutions—and their Users
• SMALL BUSINESS provides FINANCIAL
INSTITUTION with their information in XBRL and
receives loan approval in less than a day instead of two
days—or two weeks.
Average Time for Loan Processing—1.75 days
Value-added
90% + time
Analysis
spent onand
Mechanics
Decision-making?
Mechanics
<10%
More Time for Analysis
With XBRL?
=> Better Analysis => Less Risk
Or
Mechanics Analysis
Mechanics Analysis
Mechanics Analysis
Mechanics Analysis
Process more loans in the same amount of time
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XBRL Working Model: Supply
Chain & Beneficiaries
Today
XBRL for Financial
Statements
Processes
Business
Operations
Internal
Financial
Reporting
External
Financial
Reporting
Financial
Publishers
and Data
Aggregators
Companies
Participants
Trading
Partners
Investment
and Lending
Analysis
Management
Accountants
Auditors
Investors
Regulators
Software Vendors
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Benefits to Today's Users
• 1. Reduce cost of analyzing and
reporting financial information
• 2. Increase speed and efficiency of
business decisions
3. Enhance the distribution and access
of existing financial statement
information
4. More readily exchanged
5. Increase and enhance analysis
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Benefits
• 1.Reduce cost of analyzing and
reporting financial information
• 2. Increase the speed and efficiency of
business decisions
• 3. Enhance the distribution and usability
of existing financial statement
information
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Example: Cost Reduction
• International Subsidiaries:
• Large multi-national corporation uses
XBRL to quickly roll–up, analyze and
publish the financial statements of
numerous subsidiaries—
•
•
•
•
in different countries
with different languages
using different GAAP
on different computer systems
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Benefits
• 1. Reduce cost of analyzing and
reporting financial information
• 2.Increase the speed and
efficiency of business decisions
• 3. Enhance the distribution and usability
of existing financial statement
information
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Example: Efficient Decisions
• Major mutual fund company feeds
XBRL-ized information to customers to
differentiate their funds as more
objective and reliable investments
• An investor uses XBRL to compare the
financials for a range of companies—
– Belonging to different revenue levels
– Located within an industry sector
– Along multiple analytical criteria
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Benefits
• 1. Reduce cost of analyzing and
reporting financial information
• 2. Increase the speed and efficiency of
business decisions
• 3.Enhance the distribution and
usability of existing financial
statement information
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Example: Credit
• Loan Approval:
– Small Business provides Bank with their
financial information in XBRL and receives
loan approval in 1 minute instead of 2 days
• Credit Approval:
– Company approves customer credit request
with automated assessment processes
facilitated by XBRL
• Line of Credit:
– Company provides capital markets with
financial information in XBRL and receives
expedited line of credit
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App to fin rep
XBRL Taxonomies Under Development
 Commercial and Industrial Companies, US GAAP
- Published
 Federal Departments, US
 Mutual Funds, US
 Financial Institutions, US
 Commercial and Industrial, IASC
 Commercial and Industrial, German GAAP
 Bank Call Reports - FDIC
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How Do You Get There?
Needs Assessment
Design Solution/Business Plan
Training & Education
Implementation
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XML Shortcomings?
Not a replacement for integration
and middleware tools
There are many different standards
among industries
Lots of Hype, not a solution
for everything
Standards still evolving
But, you can’t wait while the
standards evolve….
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XBRL Development & Adoption
Additional Education Sources
•
•
•
•
•
•
•
www.xbrl.org - Student Competition
web.bryant.edu/xbrl
www.ebxml.org
www.w3.org; www.xml.org
www.rosettanet.org
www.ibm.com/developer/xml
www.microsoft.com/industry/biztalk
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Final Thought……..
Change is not what it used to be…..
Change has become a process; it’s
become a permanent part of the
external environment
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Summary
• FASTER
– BETTER
• CHEAPER
• Our profession will have to follow
technology and record business
activity in an real-time mode.
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Concluding Remarks…..
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To download slides……….
http://web.bryant.edu/~xbrl/riscpa.ppt
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