| 1 | | | frequently asked questions 1.who is using xbrl for what? 2.what is most urgent for xbrl...
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Frequently Asked Questions1. Who is using XBRL for what?2. What is most urgent for XBRL International?3. How will XBRL impact content based businesses?4. Why XBRL instead of our own XML Schemas?5. What XBRL tools and products are available?6. What is XLink and why is XBRL based on it?7. When will XBRL become widely used?8. Who is behind XBRL… and why?9. Is XBRL like FpML (RIXML, MDDL, SomeotherML)10. Where can I get a copy of these slides?
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Frequently Asked Question:Who is using XBRL for what?
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
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Frequently Asked Question:What is most urgent for XBRL International?
Taxonomies Wide coverage Consistent practices Reusability
Specifications Enhanced validation Richer representations Move to interoperability
Implementations Profiles
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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
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Taxonomy as Dictionary
Disclosure
MarketingAdvertising
ResultExpenseIncome
Profit Net Interest
inc exp inx
exp.adv exp.mkt inx.prf inx.int
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Taxonomy as Classification
Disclosure
MarketingAdvertising
ResultExpenseIncome
Profit Net Interest
Defined as
Defined as Defined as
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Taxonomy as Calculation
Disclosure
MarketingAdvertising
ResultExpenseIncome
Profit Net Interest
Subtracted from
Added into
Added into
Added intoAdded into
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Taxonomy as Reusable Building Block
Disclosure
MarketingAdvertising
ResultExpenseIncome
Profit Net Interest
Subtracted from
Added into
Added into
Added intoAdded into
Rebates
Website Expenses
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Example: XBRL for Web Site Reporting
GAAP C&I v2 Taxonomy
Element Schema andDefinition Linkbase
Calculation andOther Linkbases
Insider trades
Significant events
Restrictions on redefining links
US Site Taxonomy
Element Schema andDefinition Linkbase
Calculation andOther Linkbases
imports
Company Site Custom Taxonomy
Element Schema andDefinition Linkbase
Calculation andOther Linkbases
imports
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Taxonomy as Collaborative Effort
Agree naming Agree structure Agree schedule
Disclosure
MarketingAdvertising
ResultExpenseIncome
Profit Net Interest
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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.
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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
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Validation The financial information integration problem
Any (XBRL) application involving data transfer across enterprises must validate incoming data one way or another.
Consumer can validate after the fact, return errors (bad) Producer can validate before submitting (good)
Common solutions and their consequences Custom code, database constraints XML Schema validation
Computation linkbases Like XML Schema – used in many programming environments Native to XBRL and works well for financial computations Do this the way other standards bodies would
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Validating XBRL today
Form AA Filing
Schema Validation
XBRL Taxonomy
Element Schema
Calculation andOther Linkbases
Current assets, liabilities,Pretax profit, expenses,
Directors compensation…
Schedule BB Schema
Form BB Filing
Schema Validation
“Include only directors’ comp”
Imports
Form AA Schema
Schema Validation
Imports
“Include only profit and expenses which must be whole numbers”
CalculationArc cwa Validation
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Validation Levels Data elements
“Current assets” is represented by uk:ast.cur Primitive data types
The value of uk:ast.cur must be nine digits and not negative Compound data structures
A Maturity Breakdown must contain Loans, Securities and Derivatives Calculated data values
RIAC4410 = RIAC4411 + RIAC4412, plus or minus 1 Co-Constraints among data values – “Business Rules”
Box27 is True if and only if Box28 is the same as Box29 Cross-document constraints
If Box28 is larger than any other value ever reported, Var50 is True
Benefit of Upstream Validation: Low
Benefit of Upstream Validation: High
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Computation LinkbasesSample “business rule”
Outstanding Loans in Q1Monetary
Outstanding Loans in Q2Monetary
Riad4011-Q1 >= Riad4022-Q2 Formula
VariableVariable
FRB Edit Check 0125True/false
Upper tolerance
Lower toleranceConstant
Constant
Result
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Computation Linkbases (Vun Kannon)
<element name="FRB-EDCK-0125" type="xbrl:booleanItemType"> <annotation> <documentation>Current quarter value should be greater than or equal to previous quarter's value. </documentation> <appinfo> <xbrl:formula select="(number($riad4011-q1) - $lower_tolerance) >= (number($riad4011-q2) + $upper_tolerance)" xlink:type="resource" xlink:label="RI_FRB-EDCK-0125_fm" xlink:title="RI_FRB-EDCK-0125_fm"> <xbrl:variable name="riad4011-q1" xlink:type="simple" xlink:href="ffiec-031.xsd#riad4011"> <xbrl:precondition name="period" interval="m" value="6 9 12"/> <xbrl:precondition name="period" minimum_value="20010101"/> </xbrl:variable> <xbrl:variable name="riad4011-q2" xlink:type="simple" xlink:href="ffiec-031.xsd#riad4011"> <xbrl:restriction name="period" interval="m" offset="-3"/> </xbrl:variable> <xbrl:constant name="upper_tolerance" value="0"/> <xbrl:constant name="lower_tolerance" value="0"/> <ffiec:edit type="i"/> </xbrl:formula> </appinfo> </annotation></element>
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Entity Linkbase proposal
Proposed additional computation / validation requirements: Ability to define, publish and re-use general financial
formulas Ability to express computational relationships across
entities
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Entity Linkbase proposal
Common need to represent financial relationships among subsidiaries, owned assets, etc.
TLA
TBD BFD
owns100%
owns50%
Enron Group(Virtual)
Enron
Enron JV’s (Virtual)
owns100%
owns100%
St. Advil’sHospital
MA_571XVH(Asset)
owns100%
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Entity Linkbase proposalSample fragment
<ownershipLink> <!-- TLA has two fully owned subsidiaries, TBD and BFD. --> <entity xlink:label="tla" xlink:type="resource" xlink:title="tla“ /> <entity xlink:label="tbd" xlink:type="resource" xlink:title="tbd" /> <entity xlink:label="bfd" xlink:type="resource" xlink:title="bfd" /> <ownershipArc weight="1" from="tla" to="tbd" xlink:type="arc" /> <ownershipArc weight="1" from="tbd" to="tla" xlink:type="arc" /> <ownershipArc weight="1" from="tla" to="bfd" xlink:type="arc" /> <ownershipArc weight="1" from="bfd" to="tla" xlink:type="arc" /> </ownershipLink>
TLA
TBD BFD
owns100%
owns100%
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Augmented Computation Linkbase:Compact, reusable business rules TLA Q1 Revenue = TBD Q1 Revenue + BFD Q1 Revenue HPCQ Q2 Interest = HP Q2 Interest + Compaq Q2
Interest etc…
For all Owned EntitiesCorresponding “Flow”type items
in corresponding Periods
For all Owned EntitiesCorresponding “Flow”type items
in corresponding Periods
All Owned EntitiesCorresponding “Flow” type items
in corresponding Periods
Owning EntityAll “Flow” type Items
In All Periods
Owner/Owned Flow ItemsFormula
Variable Variable
CheckTrue/false
Upper tolerance
Lower tolerance
Constant
Result
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Augmented Computation Linkbase Sample “business rule”
<xbrl:formulaType select="(number($R1)) - $lower_tolerance) >= (number($R2) + $upper_tolerance)" xlink:type="resource" xlink:label="GTPP" xlink:title="GTPP"> <xbrl:variable name="P" type="period"/> <xbrl:variable name="E" type="entity"/> <xbrl:variable name="I" type="item"/> <xbrl:variable name="R1"> <xbrl:precondition name="entity" bind="$E"/> <xbtl:precondition name="item" bind="$I"/> <xbrl:precondition name="period" bind="$P"/> <xbrl:precondition name="period" interval="m" value="6 9 12"/> <xbrl:precondition name="period" minimum_value="20010101"/> </xbrl:variable> <!-- ... --> </xbrl:formulaType> <xbrl:formulaInstance xlink:label="GTPP"> <xbrl:bind name="P" value="20010101P3M"/> <xbrl:bind name="E" xlink:href="entity.xml#bailey_bank"/> <xbrl:bind name="I" xlink:href="ffiec-031.xsd#riad4011"/> </xbrl:formulaInstance>
…but my point is…
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Creating a Specification in a “capital-S” Standards Body Requirements document
Market requirements – define needs, assess current solutions Technical requirements – compatibility with other open specs Use cases – specific cases to be covered
Specification document Technical documents including design rationale
Reference implementation Sample instances, documentation of instances Sample application that illustrates correct semantics
QA and Review process Define criteria, set deadlines, have 2nd editor, vote.
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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
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Implementation Profiles Excited advocates of XBRL face cost uncertainties
Process analysis of exporting, transmitting, revising, importing Authenticating sender and receiver, privacy, version control Schema and linkbase version management, repositories
Current solutions require reinvention of wheels Plug XBRL payloads into an existing communication path Develop dedicated login, signature, transport
Publish suggested bindings to other specifications OFX2 – not typically used for reporting, but it would work SOAP / WSDL / UDDI / XLANG – Web Services ebXML – business transaction protocol, process definitions
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Producer-Consumer interactions appearing in all e-reporting Register, retrieve, update
producer and producer standing data;
Register, revoke, update authorized persons at the producer;
Register, revoke, update authorized intermediaries reporting on behalf of the producer;
Obtain new versions of the reporting form; communicate other change notices;
Submit a test report, submit an actual report;
Obtain an error check or analysis on a report;
Recall a previously submitted report; submit an updated report; modify individual data items within a report;
Confirm acceptance or rejection of a report;
Obtain a transaction history, version history; access log, and detailed audit trail of reports, by institution and/or report.
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Frequently Asked Question:How will XBRL impact content based businesses?
Intermediaries’ value added does not change Completeness – History and breadth Consistency – Data linkage via unique identifiers Availability, Anonymity of access Customization, Convenience
Intensifies competition over unique content Producer & consumer behaviors change slowly
ProducerConsumer
Intermediary
Intermediary
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Frequently Asked Question: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
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ICC Information
Part of the Bonnier Group, BBI 61 companies covering 19 European countries local information specialists core competence based around content XML adopted throughout BBI
ICC Information - UK & Irish company info. Private Companies, Directors & Shareholders
CaptureAnalysisDirect & Indirect distribution
Source:Terry Dawson, ICC
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Why XBRL is important to ICC Standardisation of content is always important! Isolates content value in purchasing decisions Provides greater distribution opportunities Standardises delivery platforms beyond XML Supports analysis methods and data structure Potential to significantly reduce costs Leverages existing technology and skills Positive revenue impact
Source:Terry Dawson, ICC
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Mid and Long-term impacts For the Industry
reduced switching costs / development expense increasing emphasis on content and end-user
integration reduced publishing costs intermediaries must seek new ways of adding value
For ICC Information greater ability for content to be integrated in a wide
variety of applications cost of capture reduces (subject to UK Companies
House & other Company Registries adopting)
Source:Terry Dawson, ICC
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Frequently Asked Question: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
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Frequently Asked Question:Why XBRL instead of our own Schemas?
ICAEW IASB AICPA IDW JICPA CICA CPAA
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Frequently Asked Question:What is XLink and why is XBRL based on it?
XLink is a W3C standard way to use XML to represent all kinds of relationships between XML elements no matter where they are.
XML Document 1 XML Document 2Linkbase
<P id=“a”>
<P id=“b”>
<P id=“c”>
b is the same as c
b explain
s a
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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”>
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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>
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Frequently Asked Question: What about other financial markup languages?
MDDL – Market Data RIXML – Research Reports FpML – Financial Instruments SMDX – Statistical Metadata ISO 15022 – UML repository of financial data
fields and business processes (SWIFT, FIX, etc.) NewsML – News Packaging and Distribution PRML – Press Releases IFX and OFX – Financial transactions
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What is the Role of XBRL in Finance? Beyond company reports, XBRL is a good
format to choose wherever a numerical breakdown/roll-up needs to be expressed.
If there are no such breakdowns, then the main XML file risks being just another XML file
Little to be gained from using XBRL, unless a significant proportion of items have accepted XBRL definitions
So it is a matter of horses for courses XBRL’s forte is numerical breakdown/roll-ups Supports drill-down into numbers of interest.
Source:Tony Coates, Reuters
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