Regis Rivet IMA Presentation

XBRL a technology and a revolution

SEC mandate for data standardization

Information supply chain and internal reporting

A use case for XBRL

2

Kristine Brands, CMA [email protected]

Charlie Hymer, CPA Regional Account Manager, Rivet Software

[email protected]

Jordan Woodard Sr. Compliance Manager, Rivet Software

[email protected]

Assistant Professor, Regis University

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Agenda

XBRL Explained

SEC Mandate for XBRL

Internal Reporting

Mythbusters 2012 – XBRL

Business Cases

Final Thoughts

Questions

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What is XBRL?

A standardized way to communicate business reports.

Focus on providing a mechanism to define reporting terms.

Individually identify bits of data within a large block of information

Getting to the heart of information that traditionally has been “paper-locked”

“Bar coding for financial information”

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Built on the shoulders of giants.

XML (Extensible Mark-up Language) – Data standard for the web Based on HTML (HyperText Mark-up Language) - the language that rules the web

XLINK (XML Linking Language) – A standard for linking pieces Of xml

XHMTL (Extensible Hypertext Mark-up Language) – A modern variant of HTML and many

more

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What is XBRL?

US GAAP TAXONOMY US GAAP ASC US GAAP REPORTING

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What is XBRL?

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XBRL in action!

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Epic use case: the SEC mandate.

The initial event that

popularized XBRL in the US

was the SEC mandate for public companies to report

their financials using the

new data standard.

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Entities, filings and facts by phase.

* Data as of 7-27-2012 @ 7:54 Note: • Total entities of 8,864 • Total filings of 39,897 • Total fact 20,126,780* *includes duplicated facts

507

1381

6976

No. of Entities

5772

5056

29069

No. of Filings

6000567

3197389

10928824

No. of Facts

Phase 1

Phase 2

Phase 3

• Phase 1 - 5 Billion Market Cap • Phase 2 - Accelerate Filers • Phase 3 - Remaining Public Companies

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Why it matters.

“I just sent over the 10-Q to my boss to review. I only started it yesterday morning... I usually work over the weekend and spend a few late nights during the quarter, but I only had to put in one Sunday afternoon and one evening and here I am - done. I was able to go to New Orleans instead.” Mitzie Pierce, Cardtronics

No more weekends at the office.

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What’s in it for you?

Use one Word document to file

everything.

Work together w/ your team in real-time.

No more keying in data. Instead, Link it.

No more keying in data. Instead, Link it.

Work together w/ your team in real-time.

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Why it matters.

“I just sent over the 10-Q to my boss to review. I only started it yesterday morning... I usually work over the weekend and spend a few late nights during the quarter, but I only had to put in one Sunday afternoon and one evening and here I am - done. I was able to go to New Orleans instead.” Mitzie Pierce, Cardtronics

No more weekends at the office.

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Keep it simple.

Data Word Excel

HTML

XBRL

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The role of software.

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XBRL in internal reporting.

XBRL GL/XBRL FR conceptual overview.

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Internal Reporting: Three Tracks Edit reports

Ad hoc reports Posting reports

Daily cash/AR/AP Performance

Primarily for

internal use

only

Preparation for

external use

More detailed

versions of

external reports Segment

PII*

* Personally identifiable information

Financial

Tax

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In general internal reporting is:

More detailed More frequent More varied (less standardized) Fewer “EDI or Die” vendor demands Change/up-front costs of standardization

• without pressure from third party But: more pressures now Internal controls

• SOx 404 PCAOB 3, Section 5.c

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Types of internal reporting:

OPERATIONAL AND ADMINISTRATIVE MANAGEMENT

• Planning • Control • Decision making

INTERNAL REPORTING DRIVES • Procurement • Staffing and scheduling • Management and direction • Cash management • Preparation for external reporting …

PREPARATION FOR • Financial • Statutory • Legal • Social • Environmental reporting

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Old World of Electronic Data Exchange

NEW WORLD

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ASB BLT

HDL

AFT TGI FRY

DRW SWG

QYD DLY

BST

WIU

ASB

ZIS XOI CUI

RMO

DLY XPS

KYF

KFC

WHR

JIA GEX

FQA VUH

HCO

WKD

ECP

SKD

MFP

WCP

DKE AJT

Old world

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XBRL in internal reporting.

BENEFITS OF XBRL FOR EXTERNAL PURPOSES ARE OBVIOUS • Shared meaning, different vocabulary • Standards and definitions • Global consumption • Machine to machine consistency • Public: From A to B to C

IS INTERNAL DIFFERENT?

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Filling in the gaps between GAAPS.

BUSINESS

Investors

Aggregators

Regulators Creditors Lenders Tax Website

Transaction Creation

ERP G/L Packages CRM

•Orders

•A/P

•Delivery

Customers •Orders

•A/R

•Delivery

2-way 2-way

Suppliers

One

way

One

way

XBRL BUSINESS REPORTING

(e-)Business X12, UBL, CEFACT FORUM, Other XML INITIATIVES

XBRL GL Journal Taxonomy Detail

Accounting

recognition/

classification

Intra system Detail to summary

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Data in internal reporting.

CONSOLIDATIONS DATA MIGRATION ARCHIVAL DATA TRANSFER AUDIT TRAIL

1

Basic challenge: similar data, but...

Different Data Dictionaries: Field names, field order

System 1: AccountNo, Amount, Date

System 2: MonetaryAmount, PostDate, AccountNumber

System 3: PostingDate, Account#, Value

System 4: Date, Journal, Account, Amount

Similar Data

Account, Amount, Date

Different Representations for the same concepts in common data field

Journal: PJ, Payroll Journal, Payroll

Date: 12-31-03, 20031231, 12/31/03

Different

Data Formats

CSV

ASCII

WKS

XBRL GL provides platform for agreed-upon and well defined list of concepts – make sure my

“Account” and your “Account” means the same thing (not bank account or customer account but

GL account.)

Based on XML, XBRL GL is order independent; sharing element names for import/export means that AccountNo, AccountNumberm Account# and Account will all be express as one common name; applications will know what to expect inpublishing

and consuming data files.

So many external data formats; XML provides a popular and increasing

supported / demanded data format.

Once you have agreed on data field standardization, software applications require agreement on content in many cases. XBRL GL

provides enumerated values to supplement XML data standards to help in this area.

XBRL GL challenges local concepts of “General Ledger.”

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Holds More

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Internal Data exchange.

Outsourced Travel and Expense

External payroll provider

Non-integrated point of sale

Subsidiary with separate system

AP

AR

IM

PR

GL

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From initial transaction. I N V O I C E May 2, 2003 Invoice #: 10037

Item Description Qty Extension

1078 Blue Widget 200 2,803.78 1083 Cyan Widget 100 1,402.93

Sub-total: 47,592.33

Freight:

Total: 47,592.33

<documentType>invoice</documentType>

<documentNumber>10037</document Number>

<documentDate>2003-05-02</documentDate>

FA

The ERP system actual/virtual:

GENERAL LEDGER

AR

IM bomp

AP PR

customers vendors

items

employees

OE AR, IM

PO AP, IM

sales orders

purchase orders

assets

REPORTING

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Facilitating web service assurance Mapping 1 Mapping 2

Spell Check

Shipping Rate Check

Credit Check

Logistics Check

Rules and Journalization

Audit and monitoring tool

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Data and views Report Writer

Select information from

database(s), including joins

Formulas create new data

fields

Add headers/footers,

conditionals with record

groupings, derived totals

based on sorts

Filter the record set

Provide visual formatting

rules, like cross-tab

Report

Concentration: Data Fields Concentration: Information Concepts

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Scope and role of XBRL

External Financial Reporting

Business Operations

Internal Financial Reportin

g

Investment, Lending,

Regulation

Processes

Participants

Auditors Trading Partners

Investors

Financial Publishers and Data

Aggregators

Regulators

Software Vendors

Management Accountants

Companies

Economic Policymaking

Central Banks

Transactio

nal

Rep

resentatio

ns

Co

nso

lidatio

n

XBRL GL

XBRL FR

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XBRL GL works with XBRL FR.

XBRL GL

US

Tax

Internal

IAS

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Benefits of XBRL for internal reporting.

IMPROVES INTERNAL MANAGEMENT • Speed • Detail • Cost of abilities of applications • Learn from mistakes, evaluate changes from plans early • Taxonomy - better communication from on top

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IMPROVES ASSURANCE DETAILS AGREEING OR RECONCILING TO REPORTING • Internal auditing • External auditing

Benefits of XBRL for internal reporting.

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IMPROVES SHARING DATA WITH BANKS • Asset based lending • Listing of open accounts from customers • Listing of inventory

IMPROVES SHARING DATA WITH ACQUIRERS IMPROVES SHARING DATA WITH PARTNERS

Benefits of XBRL for external users.

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Today’s internal …tomorrow’s external?

HOW ABOUT • The same information from its source in greater detail - which may be tomorrow's

external reporting? • Bringing together internal groups to speak the same language?

DRILL DOWN SUPPORT FROM EXTERNAL TODAY POSSIBLE (PARTIAL OR TOTAL) REPLACEMENT FOR FORMS TOMORROW

System 3 System 1

Identificador de la Cuenta

Descripción Principal de la Cuenta

Monto Monetario

Fecha de Asignación/Ingreso

Account Number

Account Description

Entry Amount

Posting Date

Account#

Description

Amount

PostDate

System 2

accountMainID

accountMainDescription

amount

postingDate

accountMainID

accountMainDescription

amount

postingDate

accountMainID

accountMainDescription

amount

postingDate

XBRL GL

XBRL GL

XBRL GL

EVERY SYSTEM AS XBRL