XBRL - (35 slides, 685k, no XML) Neal Hannon 5-14-01

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Neal Hannon and Saeed RoohaniXBRL Educational Resource Center

At Bryant College

XBRL Education Co-ChairE-Mail: [email protected]

Phone: 401.232.6195

The Next Technology RevolutionThe Next Technology RevolutionXML XBRLXML XBRL

Rhode Island Society of Rhode Island Society of Certified Public Certified Public

AccountantsAccountants

May 17, 2001May 17, 2001

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Defines TagsDefines Tags

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XBRL International is gaining strengthXBRL International is gaining strength• XBRL activities occurring in—

– 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 XBRL International is gaining strengthstrength

• On a Global level through the—

– International Accounting Standards Council

– International Press Telecommunications Council

– International Standards Organization

• On a Country Level:

– 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 JurisdictionalHow we are organized – US JurisdictionalWorking 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 ImpactXBRL 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 DocumentsXBRL Documents• 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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XBRL SupportXBRL 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 CommissionOctober 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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• 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

Benefits

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Problems XBRL AddressesProblems XBRL Addresses

• Ineffective communication to investors

• Inefficient aggregation and analysis

• Inefficient creation of financial statements

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Why XBRL ?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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Process Benefits:Process Benefits:Lowering Financial Reporting CostLowering Financial Reporting Cost

Who benefits

RegulatoryFilings

Web Site

Tax Return

Trade Filings

Printed Financials

Accounting System

Third Party Information

ExplanatoryText

• Today’s external reporting processes– Rework and delay

– Ad hoc and non repeatable

– No path forward

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Process Benefits:Process Benefits:Lowering Financial Reporting CostLowering Financial Reporting Cost

Who benefits

RegulatoryFilings

Web Site

Tax Return

Trade Filings

Printed Financials

Accounting System

Third Party Information

ExplanatoryText

XBRLDocuments

• Common interchange format and storage is good information management practice– Reduces redundancies & discrepancies

– Repeatable processes using tools

– A platform for continuous reporting

XBRL: Interoperability & Multiple UsesXBRL: Interoperability & Multiple Uses

Other Sources of Information

US GAAPFinancialStatementIn English

US GAAPFinancialStatementIn Dutch

US GAAPFinancialStatementto the Web

US GAAPFinancialStatement

to Print


to Cell Phone

XBRL


G/L Package

XBRL

ERP

CustomDevelopedSystems


XBRL

XBRL: Interoperability & Multiple UsesXBRL: Interoperability & Multiple Uses



EDGARFiling

TaxFiling

BankFiling

PressRelease

XBRL


G/L Package

XBRL

ERP



XBRL

XBRL

Investors&

Creditors

NewsAgencies

AndOthers

Government

Once Once EveryEvery Event is tagged in XBRL… Event is tagged in XBRL…


IASFinancialStatementin German

US GAAPFinancialStatementIn English

FrenchTax

Filing

CanadianBanking

Filing

EDGAR 10kline item viaCell Phone

XBRL XBRL

Investors&

Creditors

NewsAgencies

AndOthers

Government


G/L Package

XBRL

ERP



XBRL

XBRL Working Model: Planned Specifications

ExternalFinancialReporting

BusinessOperations

InternalFinancialReporting

Investmentand Lending

AnalysisProcessesProcesses

ParticipantsParticipants

AuditorsTradingPartners

Investors

FinancialPublishersand Data

Aggregators

Regulators

XBRL for G/L Journal Entry

ReportingXBRL for

EDGAR Filings

XBRL for Financial Statements

XBRL for Tax Filings

XBRL for Business Event Reporting

Software Vendors

ManagementAccountants

Companies

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XBRL: XBRL: notnot a Transaction a Transaction ProtocolProtocol

• 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.

What it is

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XBRL: XBRL: notnot an an accounting standardaccounting standard

• Means of communicating– Current GAAP

– Current practice

• Flexible standard– Future standards

– Future general practice

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XBRL ImpactXBRL 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 DataXBRL: A Fragment of a Raw Data

<group><group type="CurrentAssets.CashandCashEquivalents"><item period="1999">$1,611 </item><item period="1998">$1,648 </item></group>

Company Financial Statement

Line Item Label Year Value

Coca Cola Co.

Balance Sheet CurrentAssets.CashandCashEquivalents

CurrentAssets.CashandCashEquivalents

1999 1611

Coca Cola Co.

Balance Sheet CurrentAssets.CashandCashEquivalents

CurrentAssets.CashandCashEquivalents

1998 1648

Raw Data in Spreadsheet…

Same Raw Data in XML (XBRL) Format

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What software ‘sees’ is the differentiator and drives benefits

(here is an example)

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Importance of ReportingImportance of Reporting

”John Chambers Cisco CEO

Year End Earnings Release Call August 10, 1999

“…[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.

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“

”

The Virtual Close … has, in my opinion, just as much impact

on a company’s future success or lack thereof as the well-

published e-commerce area.

John Chambers Cisco CEO

Year End Earnings Release Call August 10, 1999

Best PracticeBest Practice

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XBRL ImpactXBRL 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 ‘e-XBRL and the Emergence of ‘e-Standards’Standards’

• 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

ASB IASC FASB IFAC SEC Territory Institutes

Standard .orgsStandard .orgs ( (reporting vs ‘e’)reporting vs ‘e’)

Accounting / Auditing Reporting

W3COASIS;UN/

CEFACT (ebxml)xml.orgRosettaNetACORD

‘e-Business’

CPAs participate / lead in these What about these?

The range of what is under The range of what is under development today………...development today………...

HR

CRM

AC

OR

D

AN

X

RosettaN

et

FpM

L

CH

EM

X

“Horizontals”(Infrastructure)

there are others…..

“Verticals” (Industry Supply Chains)there are others…….

Etc.XBRL is uniquely focused on

business reporting

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BUSINESS

XBRL Adds Reporting to E-CommerceXBRL Adds Reporting to E-Commerce

Investors

Aggregators

Regulators Creditors LendersTax Website

ERP G/L Packages CRM

•Orders•A/P•Delivery

Customers•Orders•A/R•Delivery

Suppliers

2-way2-wayTransaction Creation

Oneway

Oneway

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XBRL Adds Reporting to E-CommerceXBRL Adds Reporting to E-Commerce

BUSINESS

Investors

Aggregators

Regulators Creditors LendersTax Website

Transaction Creation

ERP G/L Packages CRM

•Orders•A/P•Delivery

Customers•Orders•A/R•Delivery

2-way2-way

Suppliers

Oneway

Oneway

XBRL

BUSINESS REPORTING

(e-)CommerceOTHER XML INITIATIVES

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Key XBRL ComponentsKey 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)

XBRL - What

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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

Key to our SuccessKey to our Success

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Steps in Technology AcceptanceSteps in Technology Acceptance

VisionariesVisionaries

TaxonomyTaxonomy

Simplification/ToolsSimplification/Tools

AcceptanceAcceptance

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XBRL Working Model: Supply XBRL Working Model: Supply Chain & BeneficiariesChain & Beneficiaries

ExternalFinancialReporting

BusinessOperations

InternalFinancialReporting

Investmentand Lending

AnalysisProcessesProcesses

ParticipantsParticipants

AuditorsTradingPartners

Investors

FinancialPublishersand Data

Aggregators

Regulators

TodayXBRL for Financial

Statements

Software Vendors

ManagementAccountants

Companies

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Benefits to Today's UsersBenefits 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 exchanged5. Increase and enhance analysis

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XBRL Taxonomies Under DevelopmentXBRL 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

App to fin rep

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How Do You Get There?How Do You Get There?

Needs AssessmentNeeds Assessment

Design Solution/Business PlanDesign Solution/Business Plan

Training & EducationTraining & Education

ImplementationImplementation

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XML Shortcomings?XML Shortcomings?

Lots of Hype, not a solution Lots of Hype, not a solution for everythingfor everything

Not a replacement for integrationNot a replacement for integration and middleware toolsand middleware tools

There are many different standards There are many different standards among industriesamong industries

Standards still evolvingStandards still evolvingBut, you can’t wait while the But, you can’t wait while the

standards evolve….standards evolve….

XBRL Development & AdoptionXBRL Development & Adoption

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Additional Education SourcesAdditional 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……..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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SummarySummary

• 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…..Concluding Remarks…..

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http://web.bryant.edu/~xbrl/riscpa.ppt

To download slides……….To download slides……….