Transcript XBRL - Kansas State University

XBRL
Extensible Business Reporting Language
XBRL: Present and Future
XBRL: Not just a requirement
XBRL: making information easier
XBRL is the future for all financial
reporting and it is important to know
how to use and format XBRL.
Extensible Business Reporting Language
(XBRL)
• An XML based markup language used to
communicate financial and business data
electronically.
– You can use it to code information such as financial
statements, earnings released, stock performance,
etc. and submit that information so that it can be
easily displayed and sorted through.
– It is already being used by many companies listed on
the stock exchange and is growing in popularity and
usage.
– It uses tags to identify each piece of financial data in a
very exact manner.
• A prototype version of XBRL was first developed in 1998.
• XBRL International is comprised of approximately 170
international organizations, including accounting firms,
technology providers, government agencies and financial
services groups.
• Securities and Exchange Commission (SEC) has mandated
that the 500 largest publically trading companies in the US
begin submitting tagged financial statements by June
2010, with rest of publically traded companies required to
submit by 2011.
– Required to tag the main part of the financial statements,
footnotes, and tables within footnotes using XBRL.
– Some companies are already voluntarily tagging prior to the
actual requirement going into effect.
The Business Reporting Supply Chain
Processes
XML Specs
XBRL External Reporting
XBRL GL
Internal
Business
Reporting
Business
Operations
External
Business
Reporting
Investment
Lending
Regulation
Economic
Policymaking
Participants
Companies
Trading
Partners
Financial
Publishers &
Data aggregators
Management
accountants
Auditors
Software Vendors
Source:Mike Willis, PWC & XBRL
Investors
Central
Banks
Regulators
Manual Interfaces
• The current situation:
– Too many proprietary software packages and manual
interfaces
• Create friction points!
– Validation is a persistent problem
• What can you trust?
• Manual controls
– Data is not reusable
– Data is not comparable (not standardized)
– Processed without “context”
• Documents are not “intelligent”
XML/XBRL Interfaces
• Processing with XML/XBRL
• The next “killer app” in the business reporting supply chain
– Frictionless processing
• Software apps that “understand” XML
– Validation is automated
• Data & documents can be trusted
– Many controls are automated
– Data is processed with “context”
• Data & documents are “intelligent”
– Data is reusable
– Data is analyzable & comparable
Communication on Networks
• Communication on computing networks
requires 2 standards:
– Standardized metadata – data about data
• Agreement on what pieces of data mean
– Standardized structure – shared context
• Agreement on the structure of the metadata
XML
• The XML “family” of technology
– The XML foundation
• The rules for the creation of documents containing
data marked-up with metadata
• The rules for defining the structure of the
documents
– The XML software paradigm
• Languages for adding new features to and
processing XML documents
• Domain-specific vocabularies (XBRL)
XML/XBRL
• XML
– The foundation for a new computing paradigm
• Automated, intelligent, frictionless processing
• XBRL
– The foundation XML vocabulary for a new
business reporting paradigm
• Standardized, intelligent documents for business
operations & financial reporting
 Advantages
 Comparison and Searchable Statements
 Once data is correctly tagged, it is easier to transmit, interpret and
search. Errors associated with data transfer are reduced.
 No external auditing of Statements
 Software is being developed to make the tagging process easier.
 Disadvantages
 Cost to make sure that data is tagged
 Added cost of Internal Auditing of Tags
 There is a cost of figuring out “how to do all of this XBRL.”
 Who Benefits?




SEC - easier regulation
Companies - easy statement review
Individual Investors - easy comparison
It is becoming, and will become, a reporting requirement in both the US
and around the world.
 Once a company gets XBRL figured out, it is easy to use and accurate.
However, when starting out, the biggest barrier for a company is cost (time,
money and any sort of approaching mandated deadline)
• XBRL tagging makes information easier to find. Investors were more likely to
invest in a company when disclosures were made via XRBL rather than
embeded somewhere in a pdf file that would have to be carefully read and
sifted through. It is now easier to analyze risk. Any flaw that a company might
have is now more apparent and harder to find. Investors can now better
understand the companies the are investing in.
• The SEC now requires public companies to provide financial statements using
XRBL in order to make information easier for investors to understand and
analyze and also provide a uniform format for the information reported.
• Over time, the SEC has had to modify the definitions of the various tags that
might be used (its schemas).
• In 2011, all publically traded companies must make their required disclosures
using XBRL.
• In addition to being required to disclose using XBRL, companies also can realize
benefits such as being able to close and post their financials much faster, they
can also improve their workflow management and they have improved audit
trails.
There are several options for companies that need to change their paperwork to
be compliant. The first option is the “Bolt-on” approach. This only modifies the
end report after it has been generated and offers no real benefits to the firms
other than compliance with this new XBRL mandate. This bolt-on method will
only be sufficient for the first year, however. During the second year, the
requirement for XBRL-tagged data will increase to include nearly every value
found in the filing reports as well as any notes. At this point, the bolt-on
approach becomes nothing more than an increased workload for the preparer.
This is where the benefits of XBRL come into play if they are built into
enterprise software. In this situation, XBRL is not simply piled onto the output
documents, but is hardcoded into the data long before it reaches the output
stage. Additionally, since all the financial information is XBRL-tagged, this
allows third party firms who may need to see or analyze the information to do
so in a standardized format. To embed XBRL even further at the GL level allows
all of the company’s information to be XBRL-ready, including the ledgers. With
this method, even if different departments within the company use different
systems or software, as long as the software is XBRL-enabled, it can interpret
the data.
There are many benefits to XBRL beyond simply complying with this new SEC
mandate for regulatory filings. The simple benefit of making all of the
company’s data universally readable should be a compelling argument for
deploying XBRL as soon as it is feasible for the company.
•
As written in a summary by Ethan Levine
MySportsStore.com, listed on NASDAQ as MYSS, needs to
report quarterly their current assets and liabilities to
their bank in an XBRL instance document. At the end of
the first quarter of 2006, they have the following
balance to report for their Cash and cash equivalents
account
– 5,860
MySportsStore.com reports under U.S. GAAP for
Commercial and Industrial companies in U.S. dollars.
•
<us-gaap-ci:CashCashEquivalents contextRef=“FirstQ2006” unitRef=“usd” decimals=“0” > 5860</us-gaapci:CashCashEquivalents>
•
indicates that the value reported, 5860, is accurate to the nearest dollar and there are no decimal places being reported.