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XBRL: The Extensible Business Reporting Language

XBRL: The Extensible Business Reporting Language. 14th Biennial Forum of Government Auditors 20-May-2002. Neal J. Hannon Chair, XBRL International Education Work Group Co-Founder, XBRL Center at Bryant College nhannon@bryant.edu. Agenda. XBRL – US and Worldwide Making the Case for XBRL

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XBRL: The Extensible Business Reporting Language

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  1. XBRL: The Extensible Business Reporting Language 14th Biennial Forum of Government Auditors 20-May-2002 Neal J. Hannon Chair, XBRL International Education Work Group Co-Founder, XBRL Center at Bryant College nhannon@bryant.edu

  2. Agenda • XBRL – US and Worldwide • Making the Case for XBRL • Government XBRL Applications • Inside XBRL • The Future of Digital Reporting

  3. XBRL UPDATE • FDIC to run pilot program for Call Sheets • Proof of concept is complete • RFQ in second quarter of 2002 • Pilot program for 2003 • APRA: XBRL in use for all required filings in banking and insurance industry in Australia • Microsoft and Reuters publish in XBRL

  4. XBRL Update • The Bank of America/ Moody’s Connection • Dresner and Deutsche Bank • GE Financial (tax consolidations) • Inland Revenue • 260 people attended Berlin, Germany conference • Over 50 Japanese companies members of XBRL-Japan • Total consortium membership projected to exceed 200 by 2003

  5. XBRL – The Technology • Specification v2 • XML • XML Schema • XML Linking Language (“XLink”) • Computation, Version Control, Mapping, Entity, and other Linkbases are Works in Progress • Interoperability • Summits I & II • Learn more @ http://www.omg.org/interop/

  6. XBRL – The Organization • History • Founded by the AICPA in 1998 (13) • Spin Out into International Organization in 2002 (>140) • Organizational Matters • Structure of XBRL • Liaison work • Next International Meeting in Toronto June 17 – 21, 2002 • Jurisdictional Growth • Active: Australia, Canada, Germany, IASB, Japan, UK, US, Singapore • Development: Belgium, Hong Kong, India, Ireland, Netherlands, New Zealand, South Africa, Spain, Sweden, Taiwan

  7. Board of Directors (Trustees) 2nd VC …Hong Kong… Netherlands Spain Sitting Members Provisional Members Finance/Audit Committee Nominating Committee Grants Executive Committee International Steering Committee Chair At Large ISC Members 4th 3rd 1st 2nd Web site Committee XBRL Management CEO Supply Chain Participants Jurisdictions International Working Groups 1st Vice Chair Preparer, Private Sector Specification Accounting * Standing Developers AU CA Intermediaries IASB* DE Liaison Software & Services SG JP Mktg & Comm Investors/Creditors UK US Education Analyst Research Regulators Academic General Ledger Public Sector Preparers

  8. XBRL InternationalGovernance & Operational Structure Board of Directors (Trustees) At Large ISC Members OPEN OPEN Coffin Hamscher 2nd VC – Schnitzer Hong Kong Netherlands Spain Members Sitting Members Provisional Finance/Audit Committee Chair - Ramin Nominating Committee Chair - Cuthbertson Grants - Watson Executive Committee International Steering Committee Chair - Hamscher Web site Committee Chair - Watson XBRL Management CEO (Acting) – Louis Matherne Supply Chain Participants Jurisdictions International Working Groups 1st Vice Chair – Kurt Ramin Preparer, Private Sector - OPEN Specification - Hampton Accounting - Willis * Standing AU -Hardidge Developers - OPEN CA - Cuthbertson Intermediaries - Watson DE - Fuhrmann Liaison – Coffin (Acting) Software & Services - Blake IASB* - Ramin JP - Watanabe Mktg & Comm. - Colgren SG - Tang Investors/Creditors - Flickinger Education - Hannon UK - Rodgers Analyst - Schnitzer US - Matherne Research - Srivastava Regulators - Walenga Academic - OPEN GL - Cohen Public Sector Preparers - OPEN

  9. XBRL – Taxonomies • IASB Commercial & Industrial • IASB Commercial & Industrial for AU, NZ, SG, UK, HK, • Japan Statutory Accounts • Germany Statutory Accounts • International General Ledger • U.S. Commercial & Industrial • U.S. Investment Management • U.S. Federal Government General Ledger (KPMG developed) • U.S. Non-Profit Form 990 • Other specific sector based taxonomies under development.

  10. 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)

  11. Microsoft CFO on XBRL • "Through Internet delivery, XBRL will also provide analysts and investors with extensible financial data to make informed decisions about the company. We see XBRL as not only the future standard for publishing, delivery and use of financial information over the Web, but also as a logical business choice." John Connors, Chief Financial Officer, Microsoft

  12. The Capital Markets • “NASDAQ joins shoulder to shoulder in the effort of the XBRL Consortium to adopt this new, freely available technology because it feels that improving the distribution and analysis of corporate results, especially for the 10,000 companies not covered by Wall Street analysts will broaden the market for NASDAQ’s own trading services” Michael Sanderson, CEO NASDAQ Europe

  13. Transparency in Financial Reporting • “Reuters’ reputation stands on its ability to communicate and the extensible business reporting language standard it has employed this week to publish accounts online is amongst the most significant of developments in promoting transparency in financial information” Accountancy Age, 1 November 2001

  14. Message to Congress on Post Enron Environment • “One large scale and potentially revolutionary private sector initiative that already is underway is a collaboration of growing companies, accounting firms and the AICPA to develop a common “tagging” system for various financial accounts, which goes under the acronym “XBRL”. … I would urge the SEC (and if necessary, urge the Committee to urge the SEC) to encourage this project… One possibility: require EDGAR submissions to be in XBRL by a specific date.” • Bob Litan, Brookings Institution & Bear Stearns testimony to U.S. Senate Banking Committee on post-Enron, March 14, 2002

  15. Implementations/Vendors • ACCPAC • Caseware • Creative Solutions • Enumerate • FRSolutions • MSFT/Great Plains/Navision • Fujitsu • Hitachi • Hyperion • KPMG • Moody’s • NewTec • SAP • Semansys • Software AG • UBMatrix • APRA • FDIC • UK Inland Revenue • GRE – Credit & RM • General Electric • Morgan Stanley • Reuters • Microsoft • Edgar-OnLine • Moody’s • Edgarscan

  16. Agenda • XBRL – US and Worldwide • Making the Case for XBRL • Government XBRL Applications • Inside XBRL • The Future of Digital Reporting

  17. eXtensible Markup Language (XML) • ……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.

  18. Windows Unix Macintosh Mainframe Linux Example: <DATE>July 26, 1998</DATE> Describes the information, not the presentation Format neutral XML is Platform Independent Self-Describing

  19. Thousands of companies release financial results quarterly The contents are not organized. The data must be re-entered into computer applications for interpretation. What if financial documents included both Content (75,044,453) and Context (¥75,044,453=net income for Q1/2001) Content and Context

  20. XML Markup: What Does it Look Like? Michael M. Miller 8080 Hill Circle Lincoln, MA 01738 +1 (617) 515-1424 Birthdate: 19 October 58 <name>Michael M. Miller</name> <address> <street>8080 Hill Circle</street> <city>Lincoln</city> <state>Massachusetts</state> <country>United States of America</country> <postcode>01738</postcode> </address> <telephone>6175151424</telephone> <birthdate>19/10/1958</birthdate> Ordinary information Metadata: Information about information

  21. Structured Content allowsData reuse, comparability, aggregation Regulatory filings Tax Return Explanatory text Document (Data with Metadata) Bank filings Accounting system Other information Website sources Printed Financials Schemas (Standard Definitions)

  22. Structured Content allowsData reuse, comparability, aggregation Regulatory filings Explanatory text Tax Return XBRL Instance Accounting system Bank filings Website Other information sources Printed Financials XBRL Taxonomies Investor Analytics

  23. XML is Expandable • Whereas • HTML has a fixed set of tags (<H1>, <B>, <PRE>) aimed at data presentation • XML lets you create your own tags • <sugary-substance> • <Shakespearean-character> • <cash-equivalent> • The key focus is on content, not presentation

  24. The XML Puzzle XML Document Industry Specific Vocabularies Company Specific Vocabulary Core Schema Transformation Tools

  25. What is XBRL? • XBRL is a freely available electronic language for financial reporting • XML-Standards based method to : • Prepare, • Reliably Extract, • Exchange on a system to system basis • Publish company financial data • Potential for extensive use in government accounting

  26. XBRL Builds on XML and SGML Industry Developed, Supported XBRL 2001 XML and XML enabling technologies X-Link, X-Schema W3C Supported 1998 ISO Standard SGML Standard Generalized Markup Language 1986

  27. Innovation Technology Evolution to Web Services Program the Web Web Services Browse the Web Web Pages Text Files Automation FTP, E-Mail,Gopher Presentation Connectivity TCP/IP HTML XML

  28. How XBRL Solves Problems Improves the way companies -- and applications -- share business reporting information 5. XBRL data is used in the government application and/or other comparable programs 3. XBRL information flows freely across the Internet or VPN, LAN and WAN 1. Client Specific Data Financial data; multiple systems FDIC Call Report XML/XBRL translator XML/XBRL translator Common XBRL Vocabulary Client COA to FDIC Taxonomy FDIC Taxonomy 2. Application data is selected, cleaned and tagged in XBRL 4. XBRL-tagged data is mapped into applications specific data such the FDIC’s Call Reports

  29. What software ‘sees’ is the differentiator and drives benefits

  30. Benefits • XBRL is: • NOT a new accounting standards but enhances the distribution and usability of existing financial statement information • Enabler and an extension for native-XML database functionality* for all financial statement information • *Can be stored as a form or a separate financial fact

  31. Raw XBRL <numericContext id="rg.cy00.jpy" cwa="false" precision="4"> <entity> <identifier scheme=“Ticker">rg</identifier> </entity> <period> <startDate>2000-01-01</startDate> <endDate>2000-12-31</endDate> </period> <unit> <measure>iso4217:jpy</measure> </unit> </numericContext> Rock Gravel Corp. Period from 1 Jan 2000 to 31 Dec 2000, In Yen Precise to 4 digits

  32. XBRL as a Translator • Accounting is fragmented • Hundreds of accounting software packages • Many correct ways to interpret GAAP and Governmental accounting • XBRL as common denominator • Each set of financial data can conform to a single taxonomy.

  33. Tags are defined by industry consortiums Each industry’s standard tags are commonly referred to as a taxonomy Who defines the tags?

  34. XBRL Taxonomies in 2002 • Best practices • e.g. ast.amz.goodwill = Amortization of Goodwill • e.g. Assets have “current” & “non current” children • e.g. Reusable common components taxonomy • Focused development efforts • IAS Taxonomy: Core financials, Core + Notes • US GAAP C&I Taxonomy • UK GAAP C&I Taxonomy • Inland Revenue “Computation” Taxonomy • FDIC Taxonomy (US) • Canadian GAAP, others. • US Standard GL taxonomy (Federal Govt.)

  35. XBRL for General Ledger Developing an international core for reporting general ledger transactions

  36. XBRL.org Specifications XBRL for FinancialStatements XBRL for General Ledger XBRL for EDGAR Filings Business Operations Internal Financial Reporting External Financial Reporting Investment and Lending Analysis Processes XBRL for Business Event Reporting XBRL for Audit Schedules XBRL for Tax Filings Companies Financial Publishers and Data Aggregators Investors Participants Trading Partners Management Accountants Auditors Regulators Software Vendors

  37. XBRL- General Ledger Goal • A cross-jurisdictional, cross-industry fact-gatherer for representing the information found in a “General Ledger”, internationally. Bringing “standardization” to

  38. Requirements for XBRL GL A Standard Format for: • 3rd party software to create journal entries to pull into client GL system • To move unposted and posted GL information from divisions to consolidating systems, budgeting ,forecasting, reporting tools, and back • To upload general ledger information, payables, receivable files and open balances for system migration or interfacing with Internet ASP

  39. Requirements for XBRL GL Standard Format to move information • From client's systems to CPA • From one CPA system (eg, write-up) to another (eg, tax) in an international context. • Open receivables, open payables, inventory balances, and other asset-based measures for sharing with banks • Detail drill-down for performance measurement reporting items Standard Format to Represent

  40. Requirements for XBRL GL • Extensible for any type of mandatory audit trail • Extensible for meeting any "sub-ledger" need • Designed as XBRL spec-compliant but for easy translation to other uses • Cannot assume that XBRL period, entity, unit and other context (numeric, nonnumeric) will automatically be there.

  41. XBRL-GL: From Business Transactions to Financial Statements XBRL For Financial Statements Recommended status 3/15/02 XBRL GL Core Unique to each organization XBRL GL Custom Business Transactions Not XBRL; function of other consortiums

  42. XBRL-GL: From Government Transactions to Financial Statements XBRL For Financial Statements Federal Government Core XBRL GL Core Health and Human Services XBRL GL Custom Government Transactions Not XBRL; function of other consortiums

  43. “General Ledger” Holds MoreValuable Information

  44. Components to Make Things Happen • XBRL-GL Taxonomy - Uses Specification 2.0 • Core Schema • Basic Concepts (with definitions) as structure for extension • Presentation linkbase • Default presentation order • Label linkbase • Default human readable labels

  45. Overview of the Structure of the GL Taxonomy Three Primary Levels accountingEntries entryHeader entryDetail GL Journal Batches Target and Source Application Creator Organization GL Journal Header Journal Identifiers Entered by Entry Date Posting Date Hash Totals GL Journal Detail Lines Detail Identifiers Line Number Amount Account XBRL Reference

  46. Reconciliations:AR 4. XBRL US ci accountsReceivableTradeNet.accountsReceivableTradeGross US GL xbrlElement=“accountsReceivableTradeNet.accountsReceivableTradeGross” xbrlTaxonomy=“{usgaap}” Continential GL US AR 3. XBRL GL entriesType=“balance” summarized amounts in account, period in time or Do the entries in 2 or 3 map to the total in 4?? 2. XBRL GL entriesType=“entries” represents individual detail of entries Do the entries in 2 sum up to the balances in 3? Are all documents from 1. reflected in the detailed entries of 2.? (documentType=“invoice”, etc.) 1. XBRL GL: entriesType=“assets” represents AR aging

  47. Cash Reconciliations and Tests 4. XBRL US ci cashAndCashEquivalents.Cash US GL xbrlElement=“cashAndCashEquivalents.Cash” xbrlTaxonomy=“{usgaap}” Continential GL US AR 3. XBRL GL entriesType=“balance” summarized amounts in account, period in time or US AP 2. XBRL GL entriesType=“entries” represents individual detail of entries documentType: check debit-memo credit-memo finance-charge invoice reminder voucher manual-adjustment other 1. XBRL GL: entriesType=“assets” represents detail of invoices, payments, etc. from both AR and AP

  48. XBRL-GL • Files and more information can be found at: www.xbrl.org/gl/gl.htm

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