XBRL is coming Is your company ready? Scott Rosenfelder Director - AERS Technology & Knowledge Management, Deloitte & Touche LLP Philip Mugglestone Director - Solution Marketing, SAP Jennifer Maddox Director - Solution Marketing, SAP December 10, 2009
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Common goals of many corporate finance functions map directly to the potential benefits of XBRL which companies may consider leveraging for their business reporting processes
Common goals for a corporate finance function:
• Reduced costs
• Stronger internal controls
• Timely and accurate data
• Standardized systems, business processes and data elements
• Seamless data exchange between business units
Potential XBRL benefits
• Cost savings, efficiency, and improved accuracy and reliability
The SEC published rules requiring the use interactive data to improve financial reporting on April 13th, 2009Highlights of the ruling:
• Require most registrants to submit XBRL-formatted financial reports and schedules as an exhibit
• Requirement is phased-in over three years, with largest registrants having to provide interactive data in filings for periods ending on or after June 15, 2009
• 30-day grace period for each initial filing of interactive data
• For most registrants, the first XBRL filing will be 10-Q, 20-F or 40-F‒ Registrants do not have to start with the 10-K
• FY ending 6/15/2009 ‒ Mandated Participants - Public companies using US-GAAP ("accelerated filers") with >$5B
market capitalization‒ Result - 427 companies - 871 10-Q filings so far
• FY ending 6/15/2010‒ Mandated Participants - All other "large accelerated filers“ using US-GAAP ‒ Expected Result – an additional 1500-2000 companies
• FY ending 6/15/2011 and thereafter‒ Mandated Participants - All public companies, including “foreign private issuers” using
either IFRS or US-GAAP‒ Expected Result – an additional 10,000 companies
• Mandate on Tagging Detail‒ FS footnotes and schedules initially tagged individually as a block of text‒ After a year of this, filers also required to tag the detailed quantitative disclosures‒ Estimated impact – 15X to 20X increase on the number of tagged data elements
• Accounting is the most critical skill even though XBRL is a computer language– Identifying the appropriate tag is the most critical step which can be
challenging due to the voluminous nature of the US GAAP taxonomies– There is a lack of guidance on tagging decisions and whether or not to create
an extension– The SEC has also included over 200 technical rules in the EDGAR Filer
Manual (EFM) on XBRL filings
• Experience and lessons learned from first round of filers indicated the significant needs for registrants to perform their due diligence on XBRL filings instead of completely relying on filing agents for tagging decisions and accuracy– Potential lack of reviews and validations resulted in errors in XBRL filings– Companies working with certain service providers are only reviewing Excel
XBRL can be leveraged to add value beyond financial reporting • Enhancing data quality and transparency• Facilitating more effective and timely business decisions• Streamlining business reporting processes and resources
The SEC is seeking to leverage XBRL in a range of additional areas in addition to corporate financial reporting, including:• The disclosure of key mutual fund information• Certain reporting by credit rating agencies to be migrated to an XBRL format• XBRL as an enabling component of the SEC new IDEA reporting platform• Application of XBRL for reporting related to asset backed securities and the credit
market
XBRL is being leveraged more in qualitative reporting, such as ecological impact reporting
XBRL is part of a larger trend towards convergence and globalization of reporting standards
• International Accounting Standards Board (IASB)‒ The IASB has released an expanded IFRS XBRL Taxonomy
• It is expected to support the broad adoption of XBRL for IFRS based reporting
• International Coordination‒ The SEC, IASB, and JFSA are taking steps to align their XBRL initiatives and taxonomy
development efforts
• National e-Government XBRL Initiatives‒ Momentum is building around large scale “national” XBRL projects
• Australia’s Standard Business Reporting (SBR) project• The Netherlands National Taxonomy Project (NTP) • These projects aim to improve efficiency and reduce costs borne by companies and governments
‒ Exchanges, regulators, and government agency activities• Canada, Korea, the UK and China
• Obtain understanding of XBRL and the new US GAAP Taxonomy
• Understand where your company falls in the SEC’s phase-in plan for XBRL-based financial reporting
• Get connected to the decisions being made around the implementation of XBRL reporting tools and processes
• Establish a plan for financial reporting teams and IT groups involvement in defining a sustainable process for converting and furnishing XBRL financials
SpeedQuickly navigate taxonomies and map dataEasy to use drag-and-drop mapping environmentFast, thorough validation of generated XBRL documents
SimplicityWorks with EPM solutions and SAP Business SuiteLink to and import disclosures stored in Microsoft WordInsulates users from dealing with complex XBRL syntax
FlexibilityEasily extend published XBRL taxonomiesComplies with the XBRL 2.1 specificationSupports basic and block‐text footnotes, dimensions, and business rules
SpeedQuickly navigate taxonomies and map dataEasy to use drag-and-drop mapping environmentFast, thorough validation of generated XBRL documents
FlexibilityEasily extend published XBRL taxonomiesComplies with the XBRL 2.1 specificationSupports basic and block‐text footnotes, dimensions, and
business rules
Summary
Saves time and money
Faster and easier to create financial statements suitable for electronic submission to regulators
Confidence and compliance
Ensures filings are accurate, complete, and meet all current regulatory requirements. Enables faster and more accurate audits at lower cost
Supports the “last mile” of finance
Streamlines consolidation, reporting, and publishing processes without sacrificing data quality
Benefits
SimplicityWorks with EPM solutions and SAP Business SuiteLink to and import disclosures stored in Microsoft WordInsulates users from dealing with complex XBRL syntax
Solution briefsStreamlining XBRL publishing for business usersAccelerating the financial closing processOptimizing the Transition to IFRSEfficient Business Planning and Consolidation Financial consolidation and reportingFinancial information managementPeer-to-peer intercompany reconciliation
White papersThe Financial Close - Optimizing Performance and Driving Financial ExcellenceImproving Intercompany Reconciliation for a Faster CloseStreamlining Your Conversion to IFRS
Recorded demosStreamlining XBRL Publishing for Business UsersAccelerated Group Financial Close