1
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
2
Defines TagsDefines Tags
3
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
4
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
5
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
6
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
7
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
8
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)
9
• 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
10
• 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
11
Problems XBRL AddressesProblems XBRL Addresses
• Ineffective communication to investors
• Inefficient aggregation and analysis
• Inefficient creation of financial statements
12
Why XBRL ?Why XBRL ? Enable business reporting
that leverages the Internet & XML
Effective access and analysis of business reports
Improve corporate communications with stakeholders
13
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
14
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
US GAAPFinancialStatement
to Cell Phone
XBRL
Other Sources of Information
G/L Package
XBRL
ERP
CustomDevelopedSystems
Other Sources of Information
XBRL
XBRL: Interoperability & Multiple UsesXBRL: Interoperability & Multiple Uses
Other Sources of Information
US GAAPFinancialStatement
EDGARFiling
TaxFiling
BankFiling
PressRelease
XBRL
Other Sources of Information
G/L Package
XBRL
ERP
CustomDevelopedSystems
Other Sources of Information
XBRL
XBRL
Investors&
Creditors
NewsAgencies
AndOthers
Government
Once Once EveryEvery Event is tagged in XBRL… Event is tagged in XBRL…
Other Sources of Information
IASFinancialStatementin German
US GAAPFinancialStatementIn English
FrenchTax
Filing
CanadianBanking
Filing
EDGAR 10kline item viaCell Phone
XBRL XBRL
Investors&
Creditors
NewsAgencies
AndOthers
Government
Other Sources of Information
G/L Package
XBRL
ERP
CustomDevelopedSystems
Other Sources of Information
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
19
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
20
XBRL: XBRL: notnot an an accounting standardaccounting standard
• Means of communicating– Current GAAP
– Current practice
• Flexible standard– Future standards
– Future general practice
21
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. …
22
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
23
24
What software ‘sees’ is the differentiator and drives benefits
(here is an example)
25
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.
26
“
”
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
27
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
28
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
31
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
32
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
33
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
34
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
35
Steps in Technology AcceptanceSteps in Technology Acceptance
VisionariesVisionaries
TaxonomyTaxonomy
Simplification/ToolsSimplification/Tools
AcceptanceAcceptance
36
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
37
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
38
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
39
How Do You Get There?How Do You Get There?
Needs AssessmentNeeds Assessment
Design Solution/Business PlanDesign Solution/Business Plan
Training & EducationTraining & Education
ImplementationImplementation
40
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
42
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
43
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
44
SummarySummary
• FASTER
– BETTER
• CHEAPER
• Our profession will have to follow technology and record business activity in an real-time mode.
45
Concluding Remarks…..Concluding Remarks…..
46
http://web.bryant.edu/~xbrl/riscpa.ppt
To download slides……….To download slides……….