31183432

Learn liow tolranslate^atement

format.your income

by Mary H. Phillips,lammy E. Bahmariziari

and Robert G. Colvar> \

XBRL (extensible Business Reporting Language) is reinventing howwe transmit and use data in business. A number of companiesare already submitting reports to the SEC through the voluntary

XBRL program. However, XBRL is not just for SEC companies: Smallbusinesses and practitioners alike could soon be using XBRL to sub-mit information to bankers, the IRS, and other agencies. In fact, XBRLwill become a part of every CPAs practice, both large and small.

XBRL ts a language for electronic com-munication of business data. Eacb item(depreciation expense, for example) istagged with information abouL various at-tributes, sucb as calendar year, audit-ed/unaudited status, currency, etc.XBRL-tagged data can be read by any soft-ware that includes an XBRL processor andthus can be easily transferred betweencomputers. To create XBRL documents,you do not need to take an XML com-puter programming course. Software isavailable to tag data for clients, submittagged data to various recipients, and re-ceive and analyze tagged data from othersources.

RECENT DEVELOPMENTSIn 2006 the SEC awarded a contract toXBRL US to develop taxonomies, whichare dictionaries for tagged data, for U.S. fi-nancial reponing. A draft of the new XBRLUS GAAP Taxonomies was released to thepublic on Dec. 5, 2007. Comments aredue by April 4, 2008.

The banldng industry has successfullyused XBRL for its FDIC call reports sincethe first quarter of 2005. ln addition, XBRLis already in use internationally For ex-ample, China requires XBRL filings for itspublic companies, and XBRL is being usedin public reporting in Japan, Spain, theNetherlands, the U.K., and other countries.

PURPOSEThe purpose of this article is to giveCPAs unfamiliar with XBRL an oppor-tunity to see that assigning XBRL tags tofinancial statements does not requirespecialized expertise, but rather issomething that any CPA can do with thehelp of software tools and a little prac-tice. The article explains step by stephow to tag a simple income statementfor a sample company. The authors se-lected Rivet Software's Dragon Tag tocreate their document because it is cur-rently the most comtnon tool used by is-suers participating in the SEC'svoluntary filing program (see Exhibit 1).A number of other XBRL tagging toolsare commercially available. The authorsrecommend that users carefully consid-er more than one tool in light of theirspecific needs.

Step One: Download the taxonomies.A taxonomy is a dictionary o\ tags tised inthe markup process. For demonstration

34 Journal of Accountancy Februar)'2008

T E C H N O L O G Y / B U S I N E S S & I N D U S T R Y

purposes, go to the new US GAAP Taxonomies that are currentlyundergoing public review at hltp://xbrl.us/usgaapreview/Pages/derault.aspx and select "Download Taxonomies." Download ihezip lile containing ihc taxonomies, and save it on your hard drive,since this will be used in setting up the entity's profile in StepThree.

Exhibit 1 XBRL Software Tools

SEC XBRL Voluntary Program StatisticsTagging Software Used:Product Number of tJsers PercentageDragon TagEDGAR Online I-MetrixCoreFIIJng Ltd.Fujitsu Interstage XWandTagEzeeXiRUTENot ListedConfluence Quick TagEDGARizerMicrosoft FrontPageUBniatrix

Total Filings in theVoluntary Program

8559302411542111

223

38.1%26.6%13.5%10.8%

4.9%2.2%1.8%0.9%0.4%0.4%0.4%

100.0%

Souice: Authors' analysis of submis5tons in ihe XBHL Voluntary Program on EDGARat Ihe SEC as ot September 2007, www.sec.gov/Archives/edgar/xbrf.hlml.

"For the most compieie, up-to-date list ol available tools, visit www.xbr1.org/tools.

Step Two: Open Dragon Tag and the file you wish to tag.In Dragon Tag, choose "Start Excel with Dragon Tag Add-in."If the Rivei menu option is not visible in Excel, go lo Add-insand select Rivet Software. Open the Excel file you wish to tag.In our demonstration, we are using Office 2007 and DragonTii; 2006. However, the process using Office 2003 and earli-er \'ersions of Dragon Tag is very similar. For our example, wehave prepared a short income statement to be tagged (seescreenshot at top of next column).

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Sample Companjf

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1Step Three: Set up the entity profile, ln ihis step you define

the entity for which you are reporting. Enter a unique ID for thecompany, such as a tax ID or ticker symbol, Eor public compa-nies, a common identifier is the companys Central Index Key(CIK) code used in SEC filings. In the "Address/URL" field, enter

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E X E C U T I V E S U M M A R Y

• XBRL is reinventing how wetransmit and use data in busi-ness. XBRL IS nol jusl for SECcompanies; Small businessesand practitioners alike couldsoon be using XBRL to submitinformation to bankers, the IRS,and other agencies. XBRL willbecome a part of every CPA'spractice.• XBRL is a language for elec-tronic communication of busi-

ness data. Each item is taggedwith information regarding vari-ous attributes. XBRL-taggeddata can be read by any softwarethat includes an XBRL processorand thus can be easily trans-ferred between computers,• A draft of the new XBRL USGAAP Taxonomies was re-leased to the public on Dec. 5,2007. Comments are due by Apnl4, 2008. The banking industry

has successfully used XBRL forits FDIC call reports since thefirst quarier of 2005. XBRL is al-ready in use internationally.• This article explains step bystep how to tag a simpleincome statement for a samplecompany. A number of otherXBRL tagging tools are commer-ciafly available. The authorsrecommend that users carefullyconsider more than one tool in

light of their specific needs.

Mary E. Phillips. CPA. Ph.D..

Tammy E. Bahmanziah, Ph.D.,

and Robert G. Cofvard. CPA.

Ph.D., CFP, are on the accounting

faculty ot Middle Tennessee State

University. Their e-mail addresses

are [email protected],

[email protected] and

[email protected], respectively.

Febmar)' 2008 Journal of Accountancy 35

T E C H N O L O G Y / B U S I N E S S & I N D U S T R Y

an address that will help idenlify your unique ID (typicallywww.sec.gov if the entity is a publicly traded company), but theURL must be an approved authoritative body or ihe Web addressfor the entiLy (see screenshot on previous page).

Select the U.S. doUar as the default currency. Next, you mustselect the default taxonomy. Choose "Browse" and locate the tax-onomy you downloaded in Step One. Click on the file and unzipil. Next choose the "Ind" folder, the "CI" folder, and finally "us-gaap-ci-stm-dis-all-2007-12-3I .xsd." There are many differentindustry taxonomies from which to choose, but we chose Com-mercial and Industrial ("CI") for our demonstration. The re-mainder of the fields ("Language." "Label Role" and "View Type")will be completed automatically once you enter the default tax-onomy.

Step Four: Mark up the data. To mark up data efficiently, ilis recommended ihat you set up a hopper to contain all the com-mon elements for the data items. A hopper is a time-saving tech-nique which applies more than one setting to a data item at onetime. For instance, you do not want to enter the calendar yearfor each item individually To set up a hopper for your reportingentity, choose "Hoppers" at the bottom left side of the screen. Thenright click on "My Hoppers" and select "Add Hopper." Next, clickthe scenario ("Audited," "Unaudited" or "Proforma"), the calen-dar period and the units in which your data is reported. The pre-cision factor determines the number of digits for your data, andyou may choose thousands or millions for the scale factor. Forinstance, if numbers are entered in thousands and you select thescale as thousands, three zeroes will be added to each numberin. the marked-up data (see screenshot below). Notice: Other tag-ging tools may handle precision and scale differently.

Creating a hopper increases the efficiency and accuracy inmarking up data. To apply the hopper, highlight the cells in theworksheet to which you want the hopper applied, and then drag

and drop the hopper into the highlighted cells. Marked-up itemsare shaded blue by default, bul you can exercise the option touse other colors for marked-up items and for different validaiionresuhs (Slep Five).

Next select "Reporting Elements" from the bottom left side ofthe screen. Choose the income statement and expand the sectionsto see all line items (see screenshot below). Identify the correct tagfrom the taxonomy, and drag and drop it on the appropriate cellin the spreadsheet. To confirai tliat you have marked indi\idualitems correctly. choi)sc "Markup Data" aiid "Markup Review."

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When you have completed marking up all the data items inthe income statement on the spreadsheet, you should create a•'Markup Report" and review it for any errors (see screenshotbelow). II needed, you can use the "Restore" option to go backto various points in the process and redo problem areas.

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Step Five: Validate. Validation is completed in two steps: (I)validation of the markup and (2) validation of calculations. Whenvalidating calculations, there are two options: Enhanced Valida-

36 Journal of Accountancy Februar)- 2008

T E C H N O L O G Y / B U S I N E S S & I N D U S T R Y

Bonus Content on the WebFor user implementation statistics, a glossary of XBRL

terms and additional exhibits, visit the online version ofthis article at www.journalofaccountancy.com.

tion and Strict XBRL Validation. If you choose Enhanced Vali-dation, you will have errors if only the summary (parent) elementsare tagged and the taxonomy's detail (child) elements are not pres-ent in the statement you are tagging. Strict XBRL Validation al-lows you to omit some of the child elements. Notice that for itemslabeled "income/loss" in the taxonomy, you must enter a nega-tive lor loss items (see screenshots below).

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Step Six: Export. Once the data has passed validation, youare ready to export the data as an XBRL file. Select "Oxport XBRL"from the dropdown menu. You may filter files for export by work-sheet for a particular client, by files using a panicular taxonomy,or by files Irom a panicular time period (see screenshot at top ofnext column).

Befotr saving the file, there are two options for previewing: "XBRLPreview" and "Web Preview." The final screenshot has an exampleof the XBRL Preview. It shows the tagged data in XBRL format.

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You have now created an "instance document," which is a doc-timent containing lagged data for an individual company If youwish to see how the recipient of your instance document will viewyour income statement. Rivet Software offers a free viewing toolcalled Dragon View. The SEC also has an XBRL viewer (created byRivet Software) on its Web site (www.sec.gov/spotUght/xbrt/xbrlwebapp.htm) so the public can view XBRL files submitted tothe SEC as pan of its voluntary' filing program. The SEC is alsomaking the source code for this \iewer available lo the puhlic.

Within Dragon View, you can export the instance documentto Excel, and the data is instantly ready for analysis. •

AICPA RESOURCES

JofA article-ROI on XBRL," June 2007, page 32

Web siteInformation Technology Center, http://infotech.aicpa.org/Resources/XBRL

OTHER RESOURCES• XBRL US, http://xbrl.us• XBRL International, www.xbri.org

Fcbaiary 2008 Journal of Accountancy- 37