Material from XBRL Steering Committee, Wayne Harding and Rick Hayes, Ph.D. June 26, 2005 XBRL An...
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Transcript of Material from XBRL Steering Committee, Wayne Harding and Rick Hayes, Ph.D. June 26, 2005 XBRL An...
Material from XBRL Steering Committee, Wayne Harding and Rick Hayes, Ph.D.
June 26, 2005
XBRL An Introduction
the XBRL Steering Committee:Zachary Coffin (KPMG Consulting)Walter Hamscher (PricewaterhouseCoopers)Mike Willis (PricewaterhouseCoopers)Eric E. Cohen (Cohen Computer Consulting)Wayne Harding (cpa2biz.com)Louis Matherne (AICPA)
ANDProfessor Rick S. Hayes (California State University LA)
XBRL and the Emergence of ‘e-Standards’
E-Standards are fundamental to the web.HTML is the standard that opened the internet to business & personal use and
is acknowledged as the web’s first ‘Big Step.’XML is having a similar ‘Big Step’ impact in using the web for commerce.
Over 200 XML-Based Specifications and Protocols exist, including—– RosettaNet – computer company supply chain and trading webs– cXML, CBL, eCo - e-Commerce Catalogue interoperability– 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.– WAP - Wireless Access Protocol
But—XBRL has no competitors.XBRL uniquely is focused on reporting. In fact, it can enhance all other XML
standards, making them more useable to a company and its finance function.
Evolution of the Internet
TechnologyInn
ova
tio
n
FTP, E-Mail,Gopher
Web Pages
Web Services
TCP/IP HTML XML
Connectivity
Presentation
Automation
Browse the Web
Program the Web
Connect pre-Web
4920 useless results in a typical search (“IBM Fixed Assets”)
InvestorsCorp.
AccountingInformation
System
++
Report
Report
Report
Regulatory Filings
Text
Text +
TaxReturns
Statementsin Print+
Statementon Web
Text
10-KEDGAR
Today: A Convoluted Information Supply Chain
Auditor
Credit Application+
BanksText
+ +
RegulatoryFilings
Web Site
Tax Returns
Bank Filings
Printed Financials
Accounting System
Other Sources of
Information
XBRL
XBRL: Multiple Outputs from a Single Specification
RegulatoryFilings
Web Site
Tax Returns
Bank Filings
Printed Financials
XBRL
Investors
Other Parties
XBRL: Repurposing Continues
What is XML (“Extensible Markup Language”)?
The next step after HTML toward the “Second-Generation Web”Established as a standard by the W3C (World Wide Web
Consortium)Uses tags to give context and structure to the contentProvides a common way for disparate systems to exchange
specific information (application integration)Separates information from style, so a single source can be
output to any format
Platform Independent
WindowsUnixMacintoshMainframe
What Is XML: Self-Describing
Example:<DATE>July 26, 1998</DATE>
Describes the information, not the presentation. Format neutral.
The Key Is ContextThe Key Is Context
<purchase-order>purchase-order> <header-information><po-number>10932</po-number> <header-information><po-number>10932</po-number> <po-order-date>99/5/1</po-order-date><po-request-date/> <po-order-date>99/5/1</po-order-date><po-request-date/> <ordered-by-company-name>Cohen Computer <ordered-by-company-name>Cohen ComputerConsulting</ordered-by-company-name>Consulting</ordered-by-company-name>[content removed here][content removed here] </header-information> </header-information> <line-items> <line-items> <line number="1"> <line number="1"> <quantity-ordered>1024</quantity-ordered> <quantity-ordered>1024</quantity-ordered> <description-of-item>Invoices</description-of-item> <description-of-item>Invoices</description-of-item> <price-total-for-line>23.50</price-total-for-line> <price-total-for-line>23.50</price-total-for-line> </line> </line> </line-items> </line-items> <footer-information/> <footer-information/></purchase-order></purchase-order>
What Is XML: Expandable
ExtensibleWhereas HTML is fixed
<H1>, <B>, <PRE>
XML lets you roll your own <sugary-substance> <Shakespearean-character> <cash-equivalent>
Example: <Person>
<Name>Wayne Harding</Name> <Title>e-Radical</Title> <Age>38</Age></Person>
What Is XML: Tags are the key
<type>cash-equivalents</type><label>Cash and Securities</label><amount period=“2000”>10000</amount><amount period=“1999”>5000</amount>
</line-item>
balance sheet
total-assets
asset (current)
amount (2000)
$91,000,000
<balance-sheet><total-assets><asset-type="current">
<amount-period=“2000"><amount>$91,000,000
</amount></amount-period>
</asset-type></total-assets>
</balance-sheet>
What Is XML: Tags give context
Greater context to the informationTree structure is natural in XML
USERS
Externally,Creditors and suppliers Information intermediaries/aggregators Investors, analysts and advisors
Internally,Any analyst or decision-maker
– reporting financial information– evaluating the results of past economic decisions– projecting the future financial position and earnings of the
business
XBRL Working Model: Planned Specifications
ExternalFinancialReporting
BusinessOperations
InternalFinancialReporting
Investmentand Lending
AnalysisProcessesProcesses
ParticipantsParticipants
AuditorsTradingPartners
Investors
FinancialPublishersand Data
Aggregators
Regulators
XBRL for G/LJournal Entry
ReportingXBRL for
Regulatory Filings
TodayXBRL for Financial
Statements
XBRL for AuditSchedules
XBRL forTax Filings
XBRL for BusinessEvent Reporting
Software Vendors
ManagementAccountants
Companies
Two layers of XBRL:
XBRL Core Specifications (for multiple countries)– E.g., XBRL for Financial Statements
XBRL Industry-specific Specifications– E.g., XBRL for Financial Statements in Healthcare
Benefits
1. Reduce cost of analyzing and reporting financial information
2. Increase the speed and efficiency of business decisions3. Enhance the distribution and usability of existing financial
statement information
CFOs still control disclosure, but now can use XBRL to communicate with investors more efficiently No change to accounting standards Easy to do Makes investors happy
Example: Cost Reduction
International Subsidiaries:• Large multi-national corporation uses XBRL to quickly
analyze and publish the financial statements of numerous subsidiaries—
– in different countries– with different languages– using different accounting standards and practices– on different computer systems
Benefits
1. Reduce cost of analyzing and reporting financial information
2. Increase the speed and efficiency of business decisions
3. Enhance the distribution and usability of existing financial statement information
CFOs still control disclosure, but now can use XBRL to communicate with investors more efficiently No change to accounting standards Easy to do Makes investors happy
Example: Efficient Decisions
• Major mutual fund company feeds XBRL-ized information to customers to differentiate their funds as more objective and reliable investments
• An investor uses XBRL to compare the financials for a range of companies—Belonging to different revenue levelsLocated within an industry sectorAlong multiple analytical criteria
Benefits
1. Reduce cost of analyzing and reporting financial information
2. Increase the speed and efficiency of business decisions
3. Enhance the distribution and usability of existing financial statement information
CFOs still control disclosure, but now can use XBRL to communicate with investors more efficiently No change to accounting standards Easy to do Makes investors happy
Example: Credit
Loan Approval:• Small Business provides Bank with their financial information
in XBRL and receives loan approval in 1 minute instead of 2 days
Credit Approval:• Company approves customer credit request with automated
assessment processes facilitated by XBRL
Line of Credit:• Company provides capital markets with financial information
in XBRL and receives expedited line of credit
Features of XBRL
A common data format for many software applications and many types of reporting
<group entity=“BigCo” units=“USD” type=“revenues” scale=“6” > <item period=“1998”>100</item> <item period=“1997”>95</item></group>
Importing data into
spreadsheets
Creating required SEC filings
Displaying financial statements on the web
Collecting reports from subsidiaries and JVs
What it is
Features of XBRL
A common data format for many software applications and many types of reportingA shared data item taxonomy always grounded in existing accounting standards
US GAAP C&IP Type Taxonomy (Fragment)· Current Assets (+)
· Cash and Cash Equivalents (+) · Short term investments (+)
· Marketable securities (+) · Available for sale (+) · Held to Maturity (+) · Trading (+)
· Receivables (+) · Accounts Receivable-Trade net (+)
· Accounts Receivable-Trade (+) · Allowance for Bad Debts (-)
· Receivables - Leasing (+) · Notes Receivables (+) · Other Receivables (+) · Contract receivables (+) · Unbilled receivables (+) · Retention (+) · Income tax (+) · Finance receivables (+)
What it is
Features of XBRL
A common data format for many software applications and many types of reportingA shared data item vocabulary always grounded in existing accounting standardsAn extensible language that can preserve the uniqueness of any company’s reporting
NE MedCorp: Type Taxonomy· Net Income (+)
· Revenues (+)· Patient Billings (+)· Ambulatory Patient Billings (+)
· Expenses (-)· Staff Salaries (+)
· Physician Salaries (+)· Support Staff Salaries (+)
NE MedCorp: Entity Taxonomy· New England Medical Corporation
· Massachusetts General· Brigham and Women’s Hospital· Longwood Medical Center
What it is
Who benefitsTechnical Benefits:Leveraging Web and e-Commerce Standards
Specification license will be freeVendor neutrality of XML facilitates interface with any third party
systemsEnables and extends relational database functionality for all
business reporting dataEnhances XML-enabled wide area search
A fragment of XBRL: Taxonomy
<?xml version="1.0" encoding="utf-8"?><schema xmlns:xbrl="http://www.xbrl.org/core/metamodel" xmlns:html="http://www.w3.org/1999/xhtml" targetNamespace="http://www.xbrl.org/us/us-gaap-ci-2000-07-
31.xsd">
...<element name="salesRevenueGross.revenueFromAffiliates" type="monetary"><annotation><appinfo><xbrl:rollup to="salesRevenueNet.salesRevenueGross" sense="add" order="3" /><xbrl:label xml:lang="en">Revenue from Affiliates</xbrl:label></appinfo></annotation></element>...</schema>
What it is
A fragment of XBRL: Instance
<?xml version="1.0" encoding="utf-8"?>...<group type=“grossProfit.salesRevenueNet”>
<item period="1999-05-31">8671</item><item period="1998-05-31">11358</item><item period="1997-05-31">14484</item>
</group><group type=“operatingProfit.operatingExpenses”>
<item period="1999-05-31">5612</item><item period="1998-05-31">6487</item><item period="1997-05-31">8070</item>
</group> <group type=“grossProfit.costOfGoodsAndServicesSold”>
<item period="1999-05-31">1188</item><item period="1998-05-31">1085</item><item period="1997-05-31">1197</item>
...</group>
Another fragment of XBRL
<?xml version=“1.0”?>...
<item type=“statements.notesToFinancialStatements”/><item
type=“notesToFinancialStatements.significantAccountingPoliciesNote”/>
<item type=“significantAccountingPoliciesNote.consolidationPolicy”/>
<item type=“consolidationPolicy.allWhollyOwnedSubsidiaries”>The financial statements include the accounts of SquigglyCo and its subsidiaries. Significant inter-company transactions and balances have been eliminated. Investments in 50% owned joint ventures are accounted for using the equity method; the Company's share of joint ventures’ activities is reflected in other expenses.</item>
What it is
Navision implementation of XBRL
Roll-out of XBRL Financial Statement Specifications
US GAAPCommercial & Industrial
(C&I) Companies
US GAAPCommercial & Industrial
(C&I) Companies
Canadian GAAPCommercial & Industrial
Companies
Canadian Acctg.Commercial & Industrial
Companies
Australian GAAPCommercial & Industrial
Companies
Australian Acct.Commercial & Industrial
Companies
IASCommercial & Industrial
Companies
IASCommercial & Industrial
Companies
……
US GAAPFinancial Services
Companies
US GAAPFinancial Services
Companies
Canadian GAAPC&I, extended to
Software Companies
Canadian Acctg.C&I, extended to
Software Companies
US GAAPC & I, extended to
Software Companies
US GAAPC & I, extended to
Software Companies
US GAAPC & I, extended to
Media & Entertainment
US GAAPC & I, extended to
Media & Entertainment
……
…… ……
…… …… ……
…… …… …………
Financial Reporting Standards - Different Jurisdictions
Industry Sp
ecific
Australian Acctg.C&I, extended to
Software Companies
Today
Within FY00
XBRL Working Model: Strategic Direction
InternalFinancialReporting
ExternalFinancial
Reporting
InternalBusiness
OperationsReporting
ExternalBusiness
PerformanceReporting
InternalExternal
FinancialFinancial
OperationalOperational
Today:XML Rendering
of existing Acctg.Reporting Standards
Future:XML supporting
StandardizedBusiness Event
Vocabularies
Near Future:XML supporting
G/L LevelInformationExchangeStandards
Far Future:XML supporting
Emerging BusinessPerformance
Metrics
Additional Information
Useful References CFO Magazines article, “How the Web was Won” about Online IR
– http://www.cfonet.com/html/Articles/CFO/2000/00FEhowt.html Scientific American article, “XML and the Second-Generation Web”
– http://www.sciam.com/1999/0599issue/0599bosak.html FASB’s Electronic Distribution of Business Reporting Information
– http://www.rutgers.edu/Accounting/raw/fasb IASC’s Business Reporting on the Internet
– http://www.iasc.org.uk/frame/cen3_26.htm XBRL Website
– http://www.XBRL.org
For additional information, please contact
Zachary Coffin, Liaison Chair(213) 955-8508 or [email protected]
Louis Matherne, AICPA(212) 596-6027 or [email protected]