Transcript Connecting with XBRL

CPA’s and the Company Business
Information Supply Chain
Mike Willis
Founding Chairman, XBRL International
Partner, PricewaterhouseCoopers
Business Trends
 Detroit Automobile Company, 1899
 Ford, 1903
 The impact:
 1908
 12 to 14 hours to assemble
 $1000 price per car
 1914
 93 minutes to assemble
 $360 price per car
 1929
 1 in 5 Americans owned a car
Business Trends (cont.)
 1974
 Average Grocery Store had 9000 SKU’s
 Chewing gum sale in Ohio changed that forever
 Today
– UPC
We
showed
that itimplications
could be done on a massive
 $17B
savings in
groceryantitrust
chain savings alone
scale,
that annual
cooperation
without
implications
forSKU’s
the common
 Average was
Storepossible
over 30,000
good,
and that
business
didn’t need
the levels and
 Greater
controls
over assortment,
inventory
government
pricing to shove it in the right direction.
Haberman, Chairman,
 Scanning /self check —
outAlan
are routine
Symbol Standardization Subcommittee
Open Standards – Discussion Topics
 Company Applications




Operational Use
Risk & Credit Assessment
Internal Reporting
External Reporting
What
The Corporate Reporting
Supply Chain
Processes
Processes
Business
Operations
ACORD
Internal
Financial
Reporting
External
Financial
Reporting
XBRL
XBRL
Ledger Financial Statements
Financial
Publishers
and Data
Aggregators
Companies
Participants
Participants
Trading
Partners
Investment
and Lending
Analysis
Management
Accountants
Auditors
Software Vendors
Regulators
Investors
What
The Corporate Reporting
Supply Chain
Processes
Processes
Business
Operations
Internal
Financial
Reporting
External
Financial
Reporting
Investment
and Lending
Analysis
XBRL
XBRL
ACORDYou are hereLedger Financial Statements
Financial
Publishers
and Data
Aggregators
Companies
Participants
Participants
Trading
Partners
Management
Accountants
Auditors
Software Vendors
Regulators
Investors
Management Reporting Current Architecture
Transaction
Data
Multiple Departmental
Excel Spreadsheets
Consolidated spreadsheets for
management
SQL
Senior
Management
SQL
Email & File Servers
2000 elements
=
6500 spreadsheets (this is not a typo)
Management Reporting Current Architecture
Transaction
Data
Multiple Departmental
Excel Spreadsheets
Consolidated spreadsheets for
management
SQL
Senior
Management
SQL
Email & File Servers
Internal Reporting
Subsidiary ERP’s
Senior
Management
Supplemental information aggregation
Web Services Architecture
Transaction
and or
subsidiary
Data
Viewing and aggregation for
department & management
Schema
XML
Web
Services
Senior
Management
Visibility of Information
 The first obstacle is……….?
 Language
 XBRL can help to increase the consumers access
to information in their own language regardless of
what language the report is published in.
 Let’s find the amount for ‘financial income’
Once you have virtual access to the underlying
detail data; then you can begin to access it.
Management can access
Board members can access it
Others???
How they access it is also part of their ability to
analyze it?
Visualization – A better way of analyzing
information today
Most information today is in columns of numbers
Visualization – A better way of analyzing
information today
Business templates: to portray financial/non-financial information
•
Includes organisation charts that reflect
financial performance;
•
Favourable performance shown in blue (and
adverse performance shown in red);
•
Enables an immediate top-down view of
business unit performance throughout the
global company.
•
Identified business drivers that contribute to a
company-defined outcome (EVA, ROCE etc)
can be mapped out; Performance in each of
those drivers can be colour coded
•
Management are provided with a clear view of
what caused a given outcome and the scale of
their impact.
Visualization – A better way of analyzing
information today
Statistical analyses: to identify trends and outliers
•
Monthly financial data can be compared
against either budget and/or against previous
year to get idea of under/over performance;
•
The standard deviation of any financial
variable may be calculated for every business
unit in group;
•
The data can then be smoothed into a Moving
Annual Average to clarify the underlying trend
of the variable
•
Business units with a high standard deviation
for a given financial variable (i.e. > 2) can be
immediately identified and ranked in order;
•
The analysis provides an immediate way of
identifying unusual performance amongst a
large group of business units.
Visualization – A better way of analyzing
information today
Graphical structures: to reveal “hidden” facts
•
Possible end-of-year sales, profit .etc
outcomes can be calculated on the basis of a
number of forecast scenarios;
•
Variables can be plotted against one another
to determine their respective influence on a
given outcome;
•
The average of these scenarios can then
calculated and assessed against management
forecasts;
•
•
Enables an immediate identification of over
optimistic forecasts and the possibility of
profits warnings.
In the above example, gross profit margin is
shown against sales for FY2002 and actual
outcomes are shown against those that were
budgeted for.
The Corporate Reporting Supply Chain
Processes
Business
Operations
ACORD
Internal
Financial
Reporting
External
Financial
Reporting
XBRL
XBRL
You are
here
Financial
Statements
Ledger
Financial
Publishers
and Data
Aggregators
Companies
Participants
Trading
Partners
Investment
and Lending
Analysis
Management
Accountants
Auditors
Software Vendors
Regulators
Investors
How does XBRL leverage XML?
XBRL adds to XML:
 Multi dimensional financial
Definitions
data representations
 Financial reporting
vocabularies (taxonomies)
 Aliases and other definition
AKA Liquid Assets
XBRL
Item
“200”
 Mathematical relationships
between concepts
 Flexibility about how to
 Structure for authoritative
policies and guidance
Reporting apps need these
even when using XML
GAAP I.2.(a)
CoA 1100
Cash & Cash Equivalents
relationships
present items to users
References
Presentation
Calculations
Formulas
Cash = Currency + Deposits
Cash ≥ 0
Label
US $
FY2003
Budgeted
Solution development
Step 1.
Problem = Exchange of
data between regulated
entity and regulator
Company
XML
Schema
Regulator
Regulator solution =
Use XML Schema to
define terms for exchange
Solution development.
Regulator Perspective
Company
Company Company Company
Company Company Company
Company Company Company
Company Company Company
Company
Company
Company Company Company
Company Company Company
Company Company Company
Company Company Company
Proprietary solution for Regulator
Company
Company
Looks good to the regulator
Company
Company
Company Company
Company
Company Company Company
Company
Company Company Company
Company
Company Company Company
Company
Company
XML
Company
Company
Company
Schema
Company
Regulator
Company Company Company
Company Company Company
Company Company Company
Company Company Company
Company
Solution development.
Company Perspective
Regulator
Regulator
Regulator
Regulator
Regulator
Regulator
Regulator
Regulator
Regulator
Regulator
Regulator
Regulator
Regulator
Regulator
Regulator
Regulator
Regulator
Regulator
Regulator
Regulator
Regulator
Regulator
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Regulator
Regulator
Regulator
Regulator
Regulator
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Regulator
Regulator
RegulatorRegulator
Regulator
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RegulatorRegulator
XML
Regulator
Regulator
Regulator
RegulatorRegulator
Regulator
Regulator
Schemas
Regulator
Regulator
Company
RegulatorRegulatorRegulator
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RegulatorRegulatorRegulator
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Proprietary solutions looks
Regulator
Regulator Regulator
Regulator
Regulator Regulator
Regulator
different to the companies
Regulator Regulator
Regulator
Regulator
Regulator
and is a costly and complex
Regulator
Regulator
Regulator
Regulator
Regulator
model
Solution development
Step 2.
3rd Party
Interpretative
Guidance
Reporting
Sources
Stds (FASB,
NAIC)
Regulations
Instructions
Internal
Reporting
Instructions
XBRL
Company
Regulator
Validation
Interpretative
Guidance
Audit
Guidance
What you can do? ……..with a new tool.
Internal Reporting
 Enhance Reporting Processes (ADT)
 Enhanced Reporting (ValueReporting)
 Benchmarking (ADT)
 Taxonomy development
 Connectivity to internal reporting policies
 Optimized Reporting Templates
 Intra-organizational reporting (ADT)
What you can do? ……..with a new tool.
Internal Reporting
 Risk Management (ADT)
 Visualization Modeling (ADT)
 Compliance Reporting (ADT)
 Compliance Assessments (ADT)
 Compliance Monitoring (ADT)
 Compliance Monitoring (ADT)
 Continuous Monitoring
 Continuous Auditing
CPA’s and the Company Business
Information Supply Chain
Mike Willis
Founding Chairman, XBRL International
Partner, PricewaterhouseCoopers
Lower Costs
“…………[financial services] companies
can reduce their publishing expenses 46%,
by adapting an XML centric means for
document development, assembly and
distribution.”
Zap Think, March 2002 Financial Services
XML Report
The Corporate Reporting Supply Chain
Processes
Business
Operations
ACORD
Internal
Financial
Reporting
External
Financial
Reporting
XBRL
XBRL
You are here
Ledger Financial Statements
Financial
Publishers
and Data
Aggregators
Companies
Participants
Trading
Partners
Investment
and Lending
Analysis
Management
Accountants
Auditors
Software Vendors
Regulators
Investors
Benefit Considerations
• XBRL benefits for consumers
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–
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Enhanced analytical capabilities
More timely, accurate, data for decisions
Enhanced functionality
Ease of use
Facilitates language translations
• XBRL benefits for producers
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Tell your own story (precise & clear)
Accelerate adoption of reporting models
Enhanced functionality
Ease of use
Better control environment
Enhanced analytical capabilities
More timely, accurate, data for decisions
Benefit Considerations
• XBRL benefits specifically for regulators
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Enhanced functionality of information
More timely, accurate, information for decisions
Enhanced analytical capabilities
Promotes more effective processes
Accelerates adoption of reporting changes
Includes regulatory input and perspectives
Lowers cost of regulation by spreading
development among collaborators
– Enhanced effectiveness of supply chain
XBRL – Ready for Prime Time?
“Some critics have suggested
that XBRL is not ready for
primetime. In fact, it is.”
Hon. Richard H. Baker
Chairman, Capital Markets Subcommittee