10 Things Young CPAs Need to Know about XBRL

April 2011 XBRL for Young CPAs

10 Things a Young CPA Should know about XBRL

Conor O‟Kelly BComm, FCA, M.Sc

Vice Chair, XBRL International

Dublin, Ireland April 2011


1. What is XBRL?

2. What are the benefits of XBRL?

3. Adoption Drivers

4. XBRL and IFRS

5. The Evolution of the Web and Its Impact on Business Reporting

6. Interactive Data and the Annual Report

7. Financial Reporting and Mobile Computing

8. Human Readable Interactive Data

9. Key Readiness Challenges

10.How do I join the conversation?

10 Things a CPA Should Know About XBRL


XBRL is a language for the electronic communication of business and financial data. It provides benefits in the preparation, analysis and communication of business information. It offers cost savings, greater efficiency and improved accuracy and reliability to all those involved in supplying or using financial data.

XBRL stands for eXtensible Business Reporting Language. It is one of a family of "XML" languages which is becoming a standard means of communicating information between businesses and on the internet.

XBRL is being developed by an international non-profit consortium of approximately 600 major companies, organisations and government agencies. It is an open standard, free of licence fees. It is already being put to practical use in a number of countries and implementations of XBRL are growing rapidly around the world.

April 2011 XBRL for Young CPAs 4

1. What does it mean for me?


Reduction in the administrative burden (i.e. cost) of providing data to Government

Streamlined process of passing/aggregating data across different internal departments, offices or business units of a company.

Increased interoperability of finance applications:

Connect disparate accounting packages together more easily (especially across different accounting areas)

Increase the ability to switch software providers in the future

Increased ability to change providers of filing services (where used) driving increased competition for business and lower charges.

Better interaction with the banks for loan applications and risk systems:

Bank loan businesses money and request financial information at the inception of the loan and throughout the loan cycle

Improved data quality (less errors due to less manual intervention).

Avoidance of fines for non-compliance with a mandatory request to provide data.

For business…

Source: OECD Forum on Tax Administration: Taxpayer Services SubGroup Guidance note Standard Business Reporting July 2009 http://www.oecd.org/dataoecd/36/52/43384923.pdf

http://www.oecd.org/dataoecd/36/52/43384923.pdf


Accounting practices that make their money from cut & paste of data should be warned that the writing is on the wall. Their days are numbered ...” Mark Tobin, Taxation Partner, Deloitte Melbourne Australia.

• Cut costs of tax preparation, tax calcs, tax effect accounting by 25 -33%

• Better analysis of client information • Less time spent on „data drudgery‟ • Reduce Costs, Speed Cycle Times and Improve Accuracy • Improved staff engagement and satisfaction • Applying a taxonomy based approach drives new services such as:

• Web based benchmarking and Business Intelligence • Online Accounting and STP for Compliance

Peter William, CEO Deloitte Digital

XBRL-enabled workflow in tax department


Economics

◦ EU Action Programme to reduce admin burden by 25%

◦ Compliance efficiencies / effectiveness – SBR programs

converge towards global standards through the IMF, FSF, the Basel committee and G20 processes.

IFRS Adoption and GAAP convergence

Capital Market Transparency – US SEC Mandate, European Commission, China CSRC

Alignment in Regulatory Consistency

Integration with other standards- ISO, W3C, Swift, OECD


The Basel Committee on Banking Supervision provides regular cooperation on banking supervisory matters designed to ensure that a bank holds capital reserves appropriate to the risk the bank exposes itself to through its lending and investment practices. Ensuring capital allocation is more risk sensitive; Separating operational risk from credit risk, and quantifying both; align economic and regulatory capital more closely to reduce the scope for regulatory arbitrage. •XBRL Adopted by US FDIC for US Banking Quarterly Call Reports •Feb09- Committee of European Banking Supervisors (CEBS) published work plan outlining priority activities to establish the framework for harmonised supervisory reporting by 2012, in conjunction with CEIOPS. Priority activities includes developments to both the COREP (COMmon REPorting) and FINREP (FINancial REPorting) taxonomies. •Oct2008 Reserve Bank of India launch XBRL Basel II reporting for Indian Banking Sector .

•Emerging Basel II XBRL projects in South America, Chile, Brazil, Argentina, Colombia, Mexico and Asia


Oct2008- EU President Barroso appointed High Level Group on Financial Supervision in EU aiming to promote e-gov and identify best practices in IT use in order to enable the EU to contribute to international and multi-national initiatives. The group are encouraging the Commission (and Member States) to consider a „pull model – once only‟; European Parliament (EP) resolution of 21 May 2008 – a call for the EC to encourage Member States to harmonise the classification of financial information and promote the use of new technology, such as XBRL; Council meeting of 7 November 2008 – aiming to promote common standards between financial centres, more transparency and comprehensive information systems, and reformed multilateral surveillance. 26 January 2009 - EC announced plans to revise the operational framework and decision-making processes of the Committee of European Securities Regulators (CESR), Banking Supervisors (CEBS) and Insurance & Occupational Pensions Supervisors (CEIOPS ). Seeking to safeguard financial stability by improving supervisory co-operation, the decision also proposes provide direct funding to those committees and to key international financial reporting and auditing standard-setting bodies, namely the IASC Foundation, the European Financial Reporting Advisory Group (EFRAG) and the Public Interest Oversight Body (PIOB). The proposal is now in the co-decision procedure for approval by the EP and the Council. XBRL Europe endorses the position of FEE regarding the setting up of “harmonised rules” and specifically the “fundamental review of the Basel 2 rules” and the extended use of the IFRS (comment N°25)

High Level Group on Financial Supervision in EU – De Larosiere Report (Feb 2009) http://ec.europa.eu/internal_market/finances/docs/de_larosiere_report_en.pdf


Requires submission of XBRL-formatted financial statements and financial statement schedules via an „XBRL Exhibit‟ for annual, quarterly filings and registration statements (and via posting XBRL Exhibit on corporate website) „Disclosure neutral‟ Phase-in, however early adoption is permitted: Domestic and foreign large accelerated fliers using US GAAP with a worldwide public float of greater than $5 billion (at Q2 of most recent completed fiscal year) - beginning with a periodic report on Form 10-Q, Form 20-F or Form 40-F containing financial statements for a fiscal periods ending on or after June 15, 2009. Remaining large accelerated filers using US GAAP – beginning with a periodic report on Form 10-Q, Form 20-F or Form 40-F containing financial statements for a fiscal period ending on or after June 15, 2010. All remaining smaller domestic filers as well as foreign private issuers using IFRS – beginning with a periodic report on Form 10-Q, Form 20-F or Form 40-F containing financial statements for a fiscal period ending on or after June 15, 2011.

http://WhiteHouse.gov http://USA.gov http://Recovery.gov

http://data.gov/


Multi-agency program to reduce the reporting burden by 25% or more by: •removing unnecessary/duplicated information from govt forms •adopting a common reporting language, based on international standards and best practice providing business with a single secure online sign-on to the agencies involved •utilising business software to automatically pre-fill government forms •providing an electronic interface to enable business to report to government agencies directly from their accounting software, which will provide validation and confirm receipt of reports -making financial reporting to government a by-product of natural business processes.

Emerging as a governmental compliance best practice in: - Govt of Netherlands SBR Project - State Controllers Office, State of Nevada - Danish Commerce and Companies Agency (DCCA), - Govt of New Zealand SBR - Govt of Australia – Dept Treasury - Singapore SBR - Government of Ireland eGov policy - Government of Poland - United Kingdom HMRC/Companies Hse joint filing - Ministry of Corporate Affairs India - European Commission driving SBR “joint filings” projects in EU countries- Belgium, Denmark, Ireland, UK, Estonia, Lux, Poland, Italy




Countries seeking convergence with the IASB on pursuing adoption of IFRSs

Countries that require or permit IFRSs

UK CA

ES US

AU

NZ

IE

JP KR

BE

CO

BR

AR

RU

SG

HK

NO

SE

PL

FI

IT CN

IN

LB

CZ

LU IASB

AE

NL

MD

MY

MT

CH

FR

SI

HU

Established XBRL Jurisdictions

Provisional XBRL Jurisdictions

XBRL Projects Ongoing

DE

DK

ZA

RO

MX

BM

CY

CL


Sept2009: published for public comment an exposure draft of the IFRS for SMEs Taxonomy. The Taxonomy is a complete translation of the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) into XBRL (eXtensible Business Reporting Language). Sept2009: Release of IFRS Taxonomy 2009 labels in Dutch Aug2009: Release of IFRS Taxonomy 2009 labels in Italian July 2009: Release of IFRS Taxonomy 2009 labels in French Jan2009 the IASC Foundation released the near final version of the IFRS Taxonomy 2009 for public comment. 26 Feb09 -released its IFRS Taxonomy Module Manager (ITMM) for open source. Feb2009 the IASC Foundation released the simplified Chinese translation of the complete label linkbase for the IFRS Taxonomy 2008, Jun2009: released new support materials for the IFRS Taxonomy 2009 and Arabic and Spanish translations


Context rich US GAAP and IFRS GAAP XBRL taxonomies issued by FASB and IASB including calculation, presentation, reference (GAAP) and language link-bases will supplement and may replace traditional paper bound volumes and become the de-facto standards for electronic business reporting.

These taxonomies will become embedded into ERP systems, data warehouses, accounting systems and desktop reporting toolsets to produce XBRL financial reports.






Tramore Bay , Waterford , Ireland - Latitude :55.1833 degrees and Longitude :-8.03333 degrees

…adding semantic intelligence..(borrowed from the airline industry)




Social Networks participants take data transmitted from aircraft transponders and collaborate to overlay onto Google Maps API for iPhone







Transparency accountants XML XSLT adoption emerging

nations align analysts assurance auditors audit-committee

benefits semantic-web G20 codification committee AJAX

company complex contact copyright CFO corporate data XSB

download dynamic IFRS enterprise exchange Financial

Reporting Web 3.0 executives extensible

fasb filings financial forms-free GAAP SOA hosts http iasb ima

industry information stylesheet interactive international XII

internet investors ireland webservices mobile language licence

global RSS Atom Cloud-Computing Offshore Outsourced GAAP

versus IFRS US-GAAP Crowd-sourced Realtime Assurance

XBRL OpenSource Social-Media CSR sustainability XHTML

interoperability standards convergence



Technology is transforming the dialogue we have we our stakeholders. Traditional distribution channels for business reporting are being replaced with interactive digital media.

User-demand for real-time interactive financial reports will drive the current generation from web based static financial reporting to an XBRL-enabled semantic web


6. Interactive Data and the Annual Report






7. Financial Reporting and Mobile Computing …in the not too distant future







April 2011 XBRL for Young CPAs 42 18 March 2011

Web3.0, semantic web, XBRL and will be a disruptive force within business reporting and continue to drive transformation within the finance department and CPA firms in the coming years.

Mobile applications will begin to store your XBRL data in the cloud as opposed to on the mobile device, and the applications will become more powerful as processing power is also offloaded to the cloud.



8. Human Readable Interactive Data (iXBRL)

Inline XBRL is a standard for embedding XBRL fragments into an HTML document or web page. The objective is to provide documents

which can be viewed in a web browser while making use of XBRL

tags which can be processed automatically by consuming

applications. This specification defines the syntax for such

documents and how the syntax maps into an XBRL instance.



XBRL fragments can be written onto XHTML web pages and consumed by standard web browsers enabling easier human reading. Wed Browser add-ons can be used in the review and sign-off process to ensure quality assurance. Additionally the “look and feel” of the printed financial statements can be preserved using iXBRL specification.


Raising awareness- understanding XBRL and what problem it solves

Implementation Options – time spent planning your implementation project will save time later

Selecting Software- XBRL is an evolving technologies. Software options are varied and evolving quickly

Mapping Data – the mapping of data to taxonomies needs to be understood and practiced

Visualising the Data- different regulators may require different options to make XBRL human-readable

Quality Assurance- a blended skill-set of technology , XML languages and financial knowledge is required to ensure quality of your filings- build your team accordingly



1. Get involved early

2. Understand what XBRL is and how it will impact you

3. Build the right team

4. Evaluate your strategies

5. Embrace technology as a change agent

6. Understand the overlaps between accounting skills and technology



Conor O'Kelly is 1st Vice Chairman of XBRL International, the non-profit consortium of over 600 members developing the XBRL Standard and a member of the XBRL International Board of Directors.

He is the past Chairman of XBRL Europe, the consortium of European XBRL Members , past Chair of XBRL Ireland and represents Ireland on the International Steering Committee of XBRL International.

He is a Fellow of Chartered Accountants Ireland with an MSc in IT Management . He has twelve years background in global IT managed services outsourcing, global project management and strategic IT business planning with Hewlett Packard and Ericsson.

Mr. O'Kelly is a past member of Council of Chartered Accountants Ireland.

10 Things Young CPAs Need to Know about XBRL

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