XBRL: The Extensible Business Reporting Language Rhode Island Society of CPA’s 13-May-2002 Dr. Saeed Roohani Chairman, Accounting Department Bryant College Neal J. Hannon XBRL International Education Work Group Chair XBRL Educational Resource Center at Bryant College [email protected][email protected]
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XBRL: The Extensible Business Reporting Language Rhode Island Society of CPA ’ s 13-May-2002 Dr. Saeed Roohani Chairman, Accounting Department Bryant College.
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XBRL: The Extensible Business Reporting Language
Rhode Island Society of CPA’s13-May-2002
Dr. Saeed RoohaniChairman, Accounting Department Bryant College
Neal J. HannonXBRL International Education Work Group Chair
XBRL Educational Resource Center at Bryant College
HK, • Japan Statutory Accounts• Germany Statutory Accounts• International General Ledger • U.S. Commercial & Industrial• U.S. Investment Management• U.S. Federal Government General Ledger (KPMG
developed)• U.S. Non-Profit Form 990 • Other specific sector based taxonomies under
development.
XBRL Support
“I would like to see you develop valuation models that result in consistent, comparable and fair values of assets and liabilities. I would like to see you hone specific, but plain English definitions for the types of information you believe should be included in public disclosure. I would like to see you take your XBRL project a step further, providing account classifications for companies in common industries. In short, I challenge you to turn all of this data into meaningful information for investors.”
- Arthur Levitt, Chairman, U.S. Securities & Exchange CommissionOctober 24, 2000, at the Fall Council of the AICPA (Las Vegas, Nevada)
Microsoft CFO on XBRL
• "Through Internet delivery, XBRL will also provide analysts and investors with extensible financial data to make informed decisions about the company. We see XBRL as not only the future standard for publishing, delivery and use of financial information over the Web, but also as a logical business choice."
John Connors, Chief Financial Officer, Microsoft
The Capital Markets
• “NASDAQ joins shoulder to shoulder in the effort of the XBRL Consortium to adopt this new, freely available technology because it feels that improving the distribution and analysis of corporate results, especially for the 10,000 companies not covered by Wall Street analysts will broaden the market for NASDAQ’s own trading services”
Michael Sanderson, CEO NASDAQ Europe
Transparency in Financial Reporting
• “Reuters’ reputation stands on its ability to communicate and the extensible business reporting language standard it has employed this week to publish accounts online is amongst the most significant of developments in promoting transparency in financial information”
Accountancy Age, 1 November 2001
Message to Congress on Post Enron Environment
• “One large scale and potentially revolutionary private sector initiative that already is underway is a collaboration of growing companies, accounting firms and the AICPA to develop a common “tagging” system for various financial accounts, which goes under the acronym “XBRL”. … I would urge the SEC (and if necessary, urge the Committee to urge the SEC) to encourage this project… One possibility: require EDGAR submissions to be in XBRL by a specific date.”
• Bob Litan, Brookings Institution & Bear Stearns testimony to U.S. Senate Banking Committee on post-Enron, March 14, 2002
Implementations/Vendors
• APRA• FDIC• UK Inland
Revenue • GRE –
Credit & RM
• General Electric
ACCPAC Caseware Creative
Solutions Enumerate FRSolutions MSFT/Great
Plains/Navision Fujitsu Hitachi Hyperion KPMG Columbus Moody’s NewTec SAP Semansys Software AG UBMatrix
Edgar-OnLine Moody’s Edgarscan
Morgan Stanley
Reuters Microsoft
XBRL is:
–NOT a new accounting standards but enhances the distribution and usability
of existing financial statement information
eXtensible Markup Language (XML)
• ……is a meta markup language the World Wide Web Consortium (W3C) considers a universal standard for describing both structured data and the behavior of applications that process the language.
XML is
• Windows• Unix• Macintosh• Mainframe• Linux
• Example:– <DATE>July 26,
1998</DATE>
• Describes the information, not the presentation
• Format neutral
Platform Independent Self-Describing
XML Simplified
XMLDATA Context
1,000 Net income:
Company
Currency
Period
Rounding
Roll-up
XBRL
XML Markup: What Does it Look Like?
Michael M. Miller8080 Hill CircleLincoln, MA 01738+1 (617) 515-1424Birthdate: 19 October 58
Rock Gravel Corp.Period from 1 Jan 2000 to 31 Dec 2000, In Yen
Precise to 4 digits
Rock Gravel Corp.Period from 1 Jan 2000 to 31 Dec 2000, In Yen
Precise to 4 digits
XBRL as a Translator
• Accounting is fragmented– Hundreds of accounting software packages– Many correct ways to interpret GAAP and
Governmental accounting
• XBRL as common denominator– Each set of financial data can conform to a
single taxonomy.
Who defines the tags?
• Tags are defined by industry consortiums • Each industry’s standard tags are commonly
referred to as a taxonomy
XBRL Taxonomies in 2002
• Best practices– e.g. ast.amz.goodwill = Amortization of Goodwill– e.g. Assets have “current” & “non current”
children– e.g. Reusable common components taxonomy
• Focused development efforts– IAS Taxonomy: Core financials, Core + Notes– US GAAP C&I Taxonomy– UK GAAP C&I Taxonomy– Inland Revenue “Computation” Taxonomy– FDIC Taxonomy (US)– Canadian GAAP, others.
XBRL for General Ledger
Developing an international core for reporting general ledger transactions
XBRL.org Specifications
ExternalFinancialReporting
BusinessOperations
InternalFinancialReporting
Investmentand Lending
AnalysisProcesses
Participants
AuditorsTradingPartners
Investors
FinancialPublishersand Data
Aggregators
Regulators
XBRL for General Ledger XBRL for
EDGAR Filings
XBRL for Audit Schedules
XBRL for Tax Filings
XBRL for Business Event Reporting
Software Vendors
ManagementAccountants
Companies
XBRL for Financial Statements
XBRL- General Ledger Goal
• A cross-jurisdictional, cross-industry fact-gatherer for representing the information found in a “General Ledger”, internationally. Bringing “standardization” to
Bombastic, Imperative and Clairvoyant, Inc.Payroll Journal
Account Description Debit Credit
1005 Cash 7,232.96
2300 FICA Payable 1,053.56
2800 Garnish Payable 545.00
…
Initial EEC
Date 9.1
Requirements for XBRL GL
• 3rd party software to create journal entries to pull into client GL system
• To move unposted and posted GL information from divisions to consolidating systems, budgeting ,forecasting, reporting tools, and back
• To upload general ledger information, payables, receivable files and open balances for system migration or interfacing with Internet ASP
A Standard Format for:
Requirements for XBRL GL
• From client's systems to CPA• From one CPA system (eg, write-up) to
another (eg, tax) in an international context.
• Open receivables, open payables, inventory balances, and other asset-based measures for sharing with banks
• Detail drill-down for performance measurement reporting items
Standard Format to move information
Standard Format to Represent
Requirements for XBRL GL
• Extensible for any type of mandatory audit trail
• Extensible for meeting any "sub-ledger" need
• Designed as XBRL spec-compliant but for easy translation to other uses
• Cannot assume that XBRL period, entity, unit and other context (numeric, nonnumeric) will automatically be there.
Accounting: Bridging eBusiness and Financial Reporting
BUSINESS
Investors
Aggregators
Regulators Creditors LendersTax Website
Transaction Creation
ERP G/L Packages CRM
•Orders•A/P•Delivery
Customers•Orders•A/R•Delivery
2-way2-way
Suppliers
Oneway
Oneway
XBRLBUSINESS REPORTING
(e-)Businessx.12, EDIFACT, XML INITIATIVES
XBRL GLLedger Taxonomy
DetailAccountingRecognition
XBRL GL Core
XBRL GL Custom
Business Transactions
XBRL-GL: From Business Transactions to Financial Statements
XBRL For Financial Statements
Recommended status 3/15/02
Unique to each organization
Not XBRL; function of other consortiums
“General Ledger” Holds More Valuable Information
Overview of the Structure of the GL Taxonomy
Three Primary Levels
accountingEntries
entryHeader
entryDetail
GL Journal BatchesTarget and Source ApplicationCreatorOrganization
• Joint Financial Management Improvement Program (JFMIP) 2001 report
• JFMIP includes Department of Treasury, General Accounting Office, Office of Management and Budget, and the Office of Personnel Management.
• “Core Financial System Requirements” states: ”To meet JFMIP interoperability requirements, the Core Financial system should: support emerging XML-based specifications for the exchange of financial data such as Extensible Business Reporting Language (XBRL).”
Interpretations related to the SFFASs issued by OMB in accordance with the procedures outlined in OMB
Circular A-134, Financial Accounting Principles and Standards.
Requirements contained in OMB's Form and Content Bulletin in effect for the period covered by the financial statements.
Accounting principles published by authoritative standard setting bodies andother authoritative sources (a) in the absence of other guidance in the first
three parts of this hierarchy, and (b) if the use of such accounting principlesimproves the meaningfulness of the financial statements.
• Department of Agriculture• Department of Commerce• Department of Defense• Department of Education• Department of Energy• Department of Health and Human Services• Department of Housing and Urban Development• Department of the Interior• Department of Justice• Department of Labor• Department of State• Department of Transportation• Department of the Treasury• Department of Veterans Affairs
Federal Generally Accepted Accounting Principles Hierarchy
• Agency for International Development• Environmental Protection Agency• Federal Emergency Management Agency• General Services Administration• National Aeronautics and Space Administration• National Science Foundation• Nuclear Regulatory Commission• Office of Personnel Management• Small Business Administration• Social Security Administration
SFFAS Promulgation Process
Treasury http://
www.treas.gov
OMB http://
www.whitehouse.gov/omb
GAO http://
www.gao.gov
Appoints
Federal AccountingStandards Advisory Board
FASAB(9 Board Members)
Appoints
Draft Statementsof Federal FinancialAccounting Standard
SFFAS
Draft Statementsof Federal FinancialAccounting Standard
SFFAS
Statements of Federal Financial Accounting StandardsAmendments
SFFAS 1 - Accounting for Selected Assets and Liabilities
SFFAS 2 - Accounting for Direct Loans and Loan Guarantee SFFAS 18
SFFAS 3 - Accounting for Inventory and Related Property
SFFAS 4 - Managerial Cost Accounting Concepts and Standards
SFFAS 5 - Accounting for Liabilities of the Federal Government SFFAS 12
SFFAS 6 - Accounting for Property, Plant and Equipment SFFAS 11, 14 & 16
SFFAS 7 - Accounting for Revenue and Other Financing Sources SFFAS 13
Taxonomy Development and ResourcesGovernment Policy
• GAP• OMB Form and Content• USSGL Crosswalk to OMB
F&C• USSGL• TFM• SFFAS/SFFAC
OMB Form and Content
ASSETS1. Entity
A. Intragovernmental1. Fund Balance With Treasury2. Investments3. Accounts Receivable, Net4. Other5. Total Intragovernmental
B.1. Investments2. Accounts Receivable, Net4. Cash and Other Monetary Assets5. Inventory and Related Property, Net6. General Property, Plant and
Equipment, Net7. Other
C. Total Entity
Treasury USSGL
Crosswalk to OMB Form and
ContentGLA Attributes
1340 X,Y,Z1349 A,B,C1610 X,Y,Z
Potential Financial Statement Submission Process
USSGL PCTB& Crosswalk
elements
USSGL PCTB& Crosswalk
elements
Instance Document
Build
Instance Document
Build
Post close T/B
Proprietary COA
Post close T/B
Proprietary COA
Post close T/BUS Standard
General Ledger
Post close T/BUS Standard
General Ledger
Mapping to US Standard
General Ledger
Mapping to US Standard
General Ledger
Convert to Treasury Crosswalk elements
Convert to Treasury Crosswalk elements
Entity AFederal Financial
Statements
Entity AFederal Financial
Statements
Other entities’ Financial Statements
Other entities’ Financial Statements
Aggregationand/or
Consolidation
Aggregationand/or
Consolidation
Consolidated Federal Financial Statements
Consolidated Federal Financial Statements
Other consolidated
Financial Statements
Other consolidated
Financial Statements
Consolidated Federal Financial Statements
Consolidated Federal Financial Statements
Aggregationand/or
Consolidation
Aggregationand/or
Consolidation
Federal TaxonomyFederal
Taxonomy
Custom TaxonomyCustom
Taxonomy
Blue = required tool
Transport envelope
TransportLayer
(SecureProtocols)
Content Layer(Payload
Language)
ApplicationLayer
(ValidationRules)
Internet
XBRL Instance Document
Producers Consumers
FTPHTTPS
SOAP
S/MIME
OFX2 ebXML
Softwaredevelopers
Business Rule Documents
DataRepository
Meta DataRepository
Alternativeprotocols
Producers
XBRL Taxonomy Documents
Transport envelope
TransportLayer
(SecureProtocols)
Content Layer(Payload
Language)
ApplicationLayer
(ValidationRules)
Internet
XBRL Instance Document
Producers Consumers
FTPHTTPS
SOAP
S/MIME
OFX2 ebXML
Softwaredevelopers
Business Rule Documents
DataRepository
Meta DataRepository
Alternativeprotocols
Producers
XBRL Taxonomy Documents
Transport envelope
TransportLayer
(SecureProtocols)
Content Layer(Payload
Language)
ApplicationLayer
(ValidationRules)
Internet
XBRL Instance Document
Producers Consumers
FTPHTTPS
SOAP
S/MIME
OFX2 ebXML
Softwaredevelopers
Business Rule Documents
DataRepository
Meta DataRepository
Alternativeprotocols
Producers
XBRL Taxonomy Documents
How will XBRL impact content based businesses?
– Less data preparation– Less data re-keying– More direct communication among processes– More emphasis on analytics– Dashboards– Expansion of non-financial information
content– Rapid transformation of products– Semantic analysis– Information agents– Reduced data tailoring costs and revenues– Reduced application tailoring costs and
revenues Source: Liv Watson, Edgar Online
Why XBRL instead of our own Schemas?
• Don’t reinvent the features of XBRL– Item types – financial parameters– Predefined concepts (labels, references)– Entities, periods, segments, scenarios– Extensibility using XLink
Business Informationthat is
• Financial in nature• Enhances standard definitions• Refers to multiple entities• Refers to multiple periods
InformationProducer
9,000€ 2.5m 57%EPS
InformationProducer
InformationProducer
InformationConsumer
InformationConsumer
InformationConsumer
XBRL uses XLink to represent all relationships between data elements
<element id=“ast.inv”>
<element id=“ast.cur”>
Definition:more
general
<Label>Current Assets</Label>
label
<Label>Inventory</Label>
label
<P>A formal explanation of
Inventory in the
Accounting Literature</P>
reference
Presentation:before
<element id=“ast.fixed”>
XLink allows customization and explicit, modular changes to reusable material
<element id=“ast.inv”>
<element id=“ast.cur”>
Definition:more
general
label
label
<P>A formal explanation of
Inventory in the Accounting
Literature</P>
reference
Presentation:before
<element id=“ast.fixed”>
<Label> </Label>
<Label> </Label>
Example: XBRL for Web Site Reporting
GAAP C&I v2 TaxonomyElement Schema
andDefinition Linkbase
Calculation andOther Linkbases
Insider trades
Significant events
Restrictions on redefining links
US Site TaxonomyElement Schema
andDefinition Linkbase
Calculation andOther Linkbases
imports
Company Site Custom Taxonomy
Element Schema and
Definition Linkbase
Calculation andOther Linkbases
imports
Present And Near Future Uses of XBRL
• B2G - Regulatory Applications– Australian Prudential Regulatory Authority
(2001)– US Federal Depository Institution Corp. (2002)– UK Inland Revenue (2003)
• B2L – Business to Lenders– Bank of America / Moody’s – Credit Analysis
(2003)– Deutsche Bank – same
• B2M – Business to Markets– Traditional financial reporting (2002)– Business performance reporting (2003)
• Internal applications
Questions!
Dr. Saeed RoohaniChair, Accounting Department Bryant [email protected]
Neal J. Hannon, CMAChair, Education Work Group,XBRL [email protected]