xbrl and financial applications paul snijders board member xbrl nederland founding member xbrl in...
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XBRL and Financial Applications
Paul SnijdersBoard member XBRL NederlandFounding member XBRL in EuropeFormer vice chair XBRL Solutions groupProject manager Architecture NTP
What do we want as SW vendor
New business opportunities Government ‘inventing’ new requirement ‘All’ our customers asking for it One standard for many possibilities Minimal investment
in other words: Make some money
XBRL: from a software point of view
XBRL with software eyes XBRL Concepts Implementation strategy Threats and Opportunities
key to market adoption
Will XBRL have an impact on software ? XBRL and financial applications XBRL and reporting software XBRL and ETL vendors (Extract Transform Load)
XBRL and consolidation vendors XBRL and Business Intelligence
XBRL throughout the reporting chain
Current software products
Accounting
ERP/GL
Logic
BusinessIntelligence
Data Warehouse
Logic
ConsolidationReporting
FinancialReporting
Logic
Taxreporting
TaxSoftware
Logic Each application has a
proprietary data model
Application have specific
logic and business rules
Data is transformed
multiple times
What is XBRL? XBRL is just another data format XBRL is a sophisticated XML implementation XBRL contains reporting definitions XBRL has data validation and quality inside XBRL removes many export formats XBRL is NOT a standard chart of accounts
XBRL is a very active consortium
XBRL is externalization
XBRL delivers a complete standardization and externalization of data definition, business rules and reporting requirements
Data exchange format Data definitions
also labels, references
Multiple data modelsHierarchical, dimensional and relational
Reporting rules Validation rules Business rules
Externalization of:
Exports, Queries Data Dictionary
Application data modelRDMB, Cubes
Reporting software Application logic Business Logic
Impact on
Example XBRL
Based on
Taxonomy
Goodwill 3.400.500Goodwill 3.400.500Goodwill 3.400.500Goodwill 3.400.500
Turnover 168920000Turnover 168920000Turnover 168920000Turnover 168920000
Common stock 12.500.000Common stock 12.500.000Common stock 12.500.000Common stock 12.500.000CEO Bill GatesCEO Bill GatesCEO Bill GatesCEO Bill GatesProfit 45.870.000Profit 45.870.000
Financial or business fact
How it works
Validation
Compliance checking
Analysis
Mapping
Validation
Companies
XBRLReport
XBRLReport
Reporting
Taxonomy creation
Accountingrules
Validation
Regulator
TaxonomyTaxonomy
XBRL: more than a data definition
LabelCash & Cash Equivalents
LabelCash & Cash Equivalents
LabelKas en Geldmiddelen
LabelKas en Geldmiddelen
FormulasCash Beginning Balance ≥ 0
FormulasCash Beginning Balance ≥ 0
ReferencesIAS 16, 2, a
ReferencesIAS 16, 2, a
PresentationAnnual report
PresentationAnnual report
PresentationBalance sheet Indirect
PresentationBalance sheet Indirect
PresentationIncome statement
PresentationIncome statementPresentationCash flow statement
PresentationCash flow statement
CalculationCash = Currency + Deposits
CalculationCash = Currency + Deposits
Currency Euro/US$ M2,
Currency Euro/US$ M2,
Segment2Prod TVHifi
Segment2Prod TVHifi
Segment2VideoAudio
Segment2VideoAudio
ScenarioBudgetActual
ScenarioBudgetActual
PeriodFY 2004 Q1,
PeriodFY 2004 Q1,
Segment1BeneluxEU
Segment1BeneluxEU
LabelComptant et Comptant Equivalents
LabelComptant et Comptant Equivalents
LabelGeld & Geld nahe Mittel
LabelGeld & Geld nahe Mittel
LabelГроші та їх еквіваленти
LabelГроші та їх еквіваленти
XBRL Taxonomy
XBRL Instance
ElementsElements
Profit : 45.870.000Profit : 45.870.000
Entity: XYZ Ltd Entity: XYZ Ltd
Example taxonomy hierarchy - NTP
Dutch GAAP RelationsData types Dutch GAAP RelationsData types
IFRS
RelationsPresentationCalculation
Dutch Gen-baseGeneric Elements Netherlands
Dutch GAAP RelationsData types
Data types
Form set Form set Form set
Report
Dutch Core
Domain specific• Tax Admin• Annual reports• Statistics
Form Sets
Per sub/target group
International basis
Instance document
Instance document
<ifrs:profit contextRef=“Contex1” unitRef=“Euros” Decimal=“0”>45870000</ifrs:profit>
Value Definition
Taxonomy
<xbrli:unit xbrli:id="u0"> <xbrli:measure>iso4217:EUR </xbrli:measure> </xbrli:unit>
Unit Defintion
<xbrli:entity>Virtual Company</xbrli:entity > <segment>North</Segment><xbrli:period> <xbrli:startDate>2004-01-01</xbrli:startDate> <xbrli:endDate>2004-06-30</xbrli:endDate> </xbrli:period> <scenario> <Scenario>Actual</Scenario> </scenario>
Context Definition
Simplified
Different data models in XBRL
Element 1: 4000Element 2: 203Element 3: AmsterdamElement 4: 8000Element 5: KPMG
Simple list
+ Element 1: 12000 + Element 2: 8000 + Element 3: 4000Element 4: Address Element 5: Street Element 6: zip
Hierachy
Relational
6000Street 4Address 4Employee 4
Street 3
Street 2
Street 1
Street
4000Address 3Employee 3
1700Address 2Employee 2
1300Address 1Employee 1
SalaryAddressName
6007507000Employee 4
560
420
230
4005000Employee 3
1702700Employee 2
1302300Employee 1
Insur.GrossName Soc.Sec
Multi dimensional
200300 Costs
1100012000 Sales
18002700 Profit
BudgetActualSales, 2006 April
200024002500Product D
1200
400
UK
10002000Product C
700Product B
300500Product A
FranceGermanySales, 2006 Actual, April
XX
Sofisticated technical fundament
TaxonomyTaxonomy
XBRL- InstanceXBRL- Instance
XBRL Spec 2.1XBRL
Spec 2.1
XMLSchema
XMLSchema
InstanceSchemaInstanceSchema
XlinkSchemaXlink
Schema
FRTAFRTATaxonomyguidelines
FRISFRISInstanceguidelines
Valid
ati
on
& C
on
form
an
ce s
uit
eV
alid
ati
on
& C
on
form
an
ce s
uit
e
1000+ pages spec700+ Conformance tests150+Mb Test set
More technical capabilities
• XBRL specification 2.1• Schema driven XML language• Heavy use of X-link
• Data structuring• Relational data models• Multidimensional structures• Hierarchical data• Flat structures• Multiple data representations
• Fully extensible • Taxonomies• Data structuring• XML and custom data types• Presentation & Calculation
And more great material to expect
• Link Role Registry (LRR) (100%)• Dimensional taxonomies (90%) • Formula linkbase (80%)• Functions (80%)• XBRL GL (95%)• Versioning (1%)• Approval processes (90%)• Entity taxonomies (0%)• Consolidation linkbase (0%)• Rendering standards (5%)
Who is involved in reporting
Internal IT departmentsFinance
(Control/Consolidation)
ReporteesExternal
• Software vendors• Consultancy • System Integrators• Auditors (also EDP auditors)
Software functionalities
Exploring taxonomies Mapping to applications/Data Validation (technical) Compliance monitoring Audit & control Transactions in XBRL (XBRL-GL)
Opportunities for SW vendors
Single export format New reporting functionalities Enhance application data model
Reporting data structures? Relational/multidimensional
New audit and control capabilities XBRL GL support XBRL as application data model
XBRL consortium deliverables
• Ready to use global standard• Complete data model• Standardization on export formats• Standard transaction level format• Multi language support• Data quality and validation• References to guidelines • Generic business rules• Presentation views• Intrinsic flexibility
FREE OF CHARGE
Alternatives Make
Hard coded implementation Generic implementation
Buy Ready to use Reporting Module Generic XBRL Product XBRL Library /XBRL Engine
The biggest question of all:
What new solutions can I offer?
Appl.Database
XBRL as hard coded format
hardcoding
• Not a generic solution• Recoding on any taxonomy change• No new taxonomies• New coding for new instances
Dead end street
Generic approach
GUI
Business Software
Complete Reporting Data Model
XBRL Solution
Mapping
Standard Software
FinancialReport
XBRL
Standard Format
TaxonomyBuilding
InstanceCreation
ValidationCompliance
Audit &Control
XBRL-GL
Functionalities
Options
XBRLGUI
GUIBusiness Software11
Build
- Make your own XBRL processor - Application development
XBRLGUI
XBRLEngine
GUIBusiness Software22
OEM - Buy XBRL components - Application development
GUIBusiness Software33 XBRL
Engine
ReportingModule
Buy - Ready to use XBRL module - Simple implementation
Easiest road map
1. Embed existing Reporting Module
2. Provide basic XBRL output
3. Make use of XBRL functionalitiesPresentation, Calculation, data validation
4. Enhance with validation options
5. Provide taxonomy building options
6. Embed XBRL data concepts in your application
7. Support XBRL GL
8. Support all other XBRL stuffFormulas, functions, dimensions, Conformance suite
Financial application in the future
ERP/GL
Logic
Data Warehouse
Logic
FinancialReporting
Logic
TaxSoftware
Logic
Data models
XBRL Business rules
XBRL Meta data
XBRL exchange format
XBRL Reporting
International standard
XBRL transactions
XBRL
XBRL
XBRL
XBRL
XBRL
XB
RL
XB
RL
XB
RL
XBRL
XBRL
XBRL
XBRL: Threat or opportunity
1. Transparent and open Data model
2. You have to support complex technology
3. Extra maintenance 4. Possible threat to
several solutions 5. Low license
revenue6. Open source XBRL
1. Better serve customers
2. Only one export format to maintain
3. New solutions & functionalities
4. New business opportunities
5. Extra licenses from new products
Todo’s Knowledge
Build your own XBRL team
Technology To what extent to provide support
Data How far to go with data integration?
Business What can you charge the customer?
Market development - thank you XBRL
• Global sophisticated standard
• Complete set of material
• Complete test sets
• Ready to use reporting data model
• Single format
• Reduction of maintenance
• Guaranteed use and market demand
• Huge market potential
“Above all, continue with your enthusiastic
contributions to the global development of
the XBRL standard. As I said at our last XBRL
Conference in Tokyo: Have no doubt, you are
changing the world for the better”
Chairman Christopher Cox, U.S. Securities and Exchange
Commission
San Jose, California, Jan. 18, 2006
Interesting promoters
“One way, perhaps, to distance
ourselves from relying on these
quarterly earnings forecasts, is to
make progress toward real-time
disclosure. ”
Michael G. Oxley , House Committee on Financial Services
Washington, March 29, 2006
www.xbrl.org
Paul SnijdersBoard member XBRL NederlandFounding member XBRL in EuropeFormer vice chair XBRL Solutions groupProject manager Architecture NTP
Free Taxonomy ViewerVisit the Semansys booth