xbrl - basics
TRANSCRIPT
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XBRL Basic Concepts
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Agenda
XBRL Meaning and EvolutionXBRL Structure
Taxonomy
Instance Document
Benefits and Application
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XBRL - Meaning The Extensible Business Reporting Language (XBRL) is one
of the family of XML . It is a language used for creating business reports. The
reports could be financial and non financial.
It is also a standard means of communicating informationbetween businesses and Internet.
Extensible- Designed to allow addition of new features at alater date
Financial Reports Non Financial Reports
Balance sheet Performance measurements
Cash flow statements Regulatory reporting forms
Income statements Loan applications
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XBRL History XBRL original idea conceived by Charles Hoffman
XBRL Developed by XBRL International XBRL International- A non-profit consortium of
major companies, organisations and governmentagencies.
These include the worlds leading accounting,
technology, government and financial servicesbodies. This collaborative effort began in 1998 and has
produced a variety of specifications and taxonomiesto support the goal of providing a standard, XML-
based language for digitizing business reports inaccordance with the rules of accounting in eachcountry or with other reporting regimes such asbanking regulation
Current specification XBRL is version 2.1 Specification provides fundamental definition of howXBRL works
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XBRL - Evolution Internet became a success as a conduit for e-commerce,
e-mail Internet is being increasingly used as a medium for
electronic delivery of business information
However, there are issues
Variety of incompatible languages
Whole range of incongruent platforms
Data stored in HTML or PDF formats are often not queriable
The information is not stored in an easily comparableformat
It takes time to access the information
Accordingly, the need arose to ensure faster, efficientand reliable electronic exchange of business information
XBRL has been developed for standardizing theinformation reported electronically
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XBRL Reports
To get business reports, XBRL describes two kinds ofdocuments Taxonomy and Instance documents. Eachdocument serves a specific purpose and together thesedocuments constitute a business report
Business Reports
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Taxonomy documents defines the concepts that are to be reported.
A concept is a basic piece of information in a report.
For example, Taxonomy document may be created for a simple
balance sheet. In this case Taxonomy document will define the
following concepts.
Taxonomy document also describes the relationship between
these concepts.
Assets Loans
Current assets Accounts Payable
Stock Equity
Debtors Current liabilities
Taxonomy - Meaning
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Taxonomy Structure
Taxonomy structure
Schema file- That contains theDefinition of Business
Reporting concepts
Linkbase Defines theRelationship between
Elements
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Defining concept
Concept
Elements
Name -Current Assets,
Debtors,Current liabilities
Substitution group-Item or tuple
Type-Monetary type
String typeDate type
Balance Debit orCredit
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Examples
= Current Asset Type = Xbrl:
monetaryitemType substitution Group = Xbrli:itemXbrli:balance=debit/>
Instance with Tuple Tuple is an Element that contains otherelements. It is used when a concept cannot be properlyunderstood independently. For example to define an address withStreet name, city and postal code- In this address is created as
Tuple
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Relationships
Taxonomy document Not complete
without describing Relationships
Relationship between concepts are created
using Xlink
Xbrl uses Xlink for different purposes inXbrl Taxonomy documents
Definition links
Calculation links
Presentation links
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Definition Relationship
Defines how the concepts are related to eachother
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Equivalency Relationship
Dimension- Element and Element-Dimension These areused to express relationships between two concepts thatare considered Equivalents
For instance Total of assets by geographical area shouldbe equal to total of assets by Product line
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Calculation Relationship
Calculation relationship shows how conceptsparticipate in computation and summation
It would show how stock, debtors would sum upto current assets or how current liabilities andother liabilities would sum up to total liabilities
Calculation relationship would also includeweightage
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Presentation Relationship
Presentation relationship defines how conceptsshould be presented or displayed
The groupings can be performed in many ways
For example, a Balance Sheet contains Assets,Equity, and Liabilities
Assets consist of Current Assets and Non-current
Assets, etc.
The presentation linkbase helps organize these
elements using parent-child relations (a
hierarchical structure)
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Structure of Links
Xlink uses locators and Arc to create a relationship betweentwo concepts
Locators Identifies where the concepts are defined
Arc is created that connects the Locators
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Name Space
XBRL not restricted using onetaxonomy ( vocabulary) at a time
Name space is used When morethan one taxonomy is used
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Extending Taxonomies
Taxonomies Extensibility allows to build onExisting Taxonomy
For instance A taxonomy for a company can bebuilt on an existing Taxonomy of a Accountingstandards board
Company specific new elements and relationshipscan be added and defined to the existingtaxonomy
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Example of Extended taxonomy
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Taxonomy document does not show any value. It is justconcepts and relationships
The values are contained in the Instance document Exampleof an Instance document
When concepts from taxonomy documents are reported in an
Instance documents with Value, they are referred to as facts Besides the above, it also gives information of as on what
date, the details are given
Instance document also does not show any relationshipbetween concepts. The facts are jumbled together
Concept from Taxonomy document Value As of date
Accounts payable 90 March 31 2009
Stock 50 March 31 2009
Loans 30 March 31 2009
Instance Document
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Business reports When a taxonomy and Instance documents are combined
together, then it becomes a business report
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Business reports When a taxonomy and Instance documents are combined
together, then it becomes a business report
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ITEM
ITEM ATTRIBUTE
NUMERIC CONTEXT
NON - NUMERIC
CONTEXT
UNIT
PRECISION
ENTITY
PERIOD
SCENARIO
INSTANCE DOCUMENT STRUCTURE
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Example of an Instance document- coding
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XSLT Important part of XBRL Data is separated from
concepts Data recorded in instance documents Can be
interpreted both by humans and computers
XBRL Instance document not a pretty sight
Needs to be transformed into proper form foranalysis and interpretation
Extensible Style Language Transformation (XSLT)style sheets, or Cascading Style sheets (CSS).
Both XSLT and CSS are just XML standards usedfor the presentation of data.
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Why two documents
To reuse the reporting terms Every time a balance sheetis prepared, only a new instance document is to beprepared as only the facts are changing. The meaning ofconcepts remain the same
Also when instance document use concepts from sametaxonomy, the facts are comparable. As the definition ofthe concepts, say assets, the assets of one balance sheetcan be compared with the assets in another balance sheet
The more fluid information is captured in Instance
document and the more static information is captured inthe Taxonomy documents.
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5/1/2012 28
Regulatory
Filings
Web Site
Tax
Returns
Bank
Filings
Printed
FinancialsAccounting
System
Other
Sources ofInformation
XBRL
With XBRL: Multiple Outputs from a Single Specification
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5/1/2012 29
Regulatory
Filings
Web Site
Tax
Returns
Bank
Filings
Printed
Financials
XBRL
Investors
OtherParties
XBRL: Information flow TO stakeholders
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Who are using XBRL ?
B2G - Regulatory Applications SEBI
INCOME TAX
B2L Business to Lenders Banks
B2M Business to Markets
Traditional financial reporting
Business performance reporting
Internal applications
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Xbrl- Advantages Time saving Automating the process of data collection. Multiple report
preparation takes less time. Re keying of data avoided. Xbrl coded
information can be fed in to various instance documents to create required
customized outputs.
Timelyavailable within a reasonably short period from the time of
measurement
Accuratefree of data anomalies and errors and tested for obvious
manipulation. Reliability of data is enhanced
Better data analysis and comparability- Efforts focused on analysis
and decision making rather than laborious process of data compilation and
reconciliation
EfficientThe cost of collecting the information proportionate to the value
of the data collected. Xbrl enabled data can be more easily searched,
analysed and converted into any other form
Companies will benefit from growing importance of websites as a means of
communication- Improve Investor relationship
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Live case of XBRL benefits The Federal Deposit Insurance Corporation (FDIC), the
Office of the Comptroller of the Currency (OCC), and theFederal Reserve System (FRS), known collectively as theFFIEC Call Agencies,wanted to improve the collection andmanagement of financial institution data. Call reports
The FFIEC provided Call Report software vendors with anXBRL, version 2.1 taxonomy that provides all contentrequirements, formulas for data validation criteria, plain
English edit messages, capability to capture and reporteach institutions explanations for valid data discrepanciesand/or fluctuations, and common Instance Documentoutput for transmission (i.e., Internet or Web Services).
Implemented XBRL based report filing system afterproviding for various validation checks in the software.
All the data would have to pass all validity requirementsbefore the Financial Institutions could transmit data
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Live case of XBRL benefits ( Cont)Value realised New
processOldprocess
Cleaner data- Logicalrelationship between data
furnished
95% 66%
Data accuracy- Arithmeticalaccuracy
100% 70%
Faster data inflow From thecalendar quarter end
Lessthan 1
day
weeks
Faster data access Publishing data for public
1 day 10 days
Increased Productivity-Banks/analyst
550-600 450-500
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Workflow: Updating Financial Models
Current Workflow
Report published to the web
inHTML or PDF format
Analyst manually transcribes
numbers into spreadsheet
model
and
analyses results quickly in
order to get a comment out
Process with XBRL
Report published in XBRL format
Numbers automatically loaded into
spreadsheet by an Excel add-in
Analyst has more time to analyse
results with confidence
FinancialModel
updatedAnalysis Conclusions
Companyresults
announced
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XBRL in India - Developments
ICAI Draft general purpose financial reportingXBRL taxonomy finalised for commercial andIndustrial establishments
Draft Taxonomy developed conforming to IndianAccounting standards and company law
Draft taxonomy covers Balance sheet, Profit andloss and cash flow
Taxonomy for banks and NBFCs under preparation
RBI
In oct08 had asked all banks to file theBasel-II return on capital adequacy returns in XBRLformat
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What to do? Identifying how many systems are used in producing business
information Identifying the complexity of business process that go in toproducing business information
Measuring the number of person hours that go into producingkey management information and comparing that figure withthe amount of time that goes into analysis
Critically examining the relevance (the timeliness andpredictive value) of key management information
To discuss the potential effect of digital business reporting onexternal investor relations with the investor-relations staff andadvisers.
Cost savings that can be realized from receiving, storing and
sending information in XBRL format To ensure that the IT staff is aware of the impact that digitalbusiness reporting will have on the activities and that they aregetting up to speed on the technical aspects.