xbrl: major developments in the us public and private...

XBRL: Major Developments in the US Public and Private Sector

Daniel RobertsNational Director of Assurance Innovation

May 2007

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Accountancy Age, 11 May 2007

Investors in the US are set to benefit from the securities regulator formalising a rule which will allow instantaneous information and company reports through XBRL.

This follows an announcement yesterday from Securities and Exchange Commission chairman, Christopher Cox, who said the rule would require all companies to report financial information in the 'extensible business reporting language' known as XBRL.

Investors will now be able to receive information on stocks, bonds and mutual funds with the data itself being interactive, making it possible for investors to go online and compare information filed, the FT reported.

Cox said the formalising of the rule was part of the SEC's 'war on complexity and said the new format would 'enable investors to find what they need quickly and reliable, without having to pore through pages and pages of documents.'

'I've been fighting against legalese and gobbledygook for years,' he said.

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Agenda

• What is XML

• What is XBRL

• Who is XBRL, and Why does XBRL matter

• XBRL for Internal Reporting and Internal Controls

• What is the FDIC/FFIEC’s Call Report Modernization Program?

• What is the SEC’s Test Program / Voluntary Filing Program?

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Agenda

• What is XML

• What is XBRL





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What Is XML?

W3C (World Wide Web Consortium) recommendation, 1998.Better documents

– Uses tags to give context and structure to content– Provides a means to separate data from style (so a

single source can be output for multiple uses)Better data

– Provides a common way for disparate systems to exchange specific information (application integration)

– Separates data from logic of applications (so that it can be reused for multiple purposes).

Introducing “docu-data”

e-business

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How XML Compares with Other Reusable Formats

Attributes of “standard”formats

XML HTML DBF

Variable length fields YesYes

*No

Yes

NoNo

**

Yes*

No field size limitationsYesNo*

Yes

No

*No

NoSelective encryption Yes No No No No NoStandard Office import/export Yes Yes Yes Yes Yes No

ExtensibleIncludes context or field names (“rip and read”)Cross-platform, non-proprietary, “universal”Validation of filesGroups collaborating on definition and interoperabilitySelective digital signatures

Not verbose, smaller file sizes *

ASCII Fixed CSV Excel EDI

Yes No Yes Yes NoYes Yes Yes No YesYes No No * NoYes No No Yes No

Yes Yes Yes No Yes

Yes No No * NoYes No No No Yes

Yes No No No No

* * * * *

weakness strengthworkaround

Note: PDF is a very popular document exchange format, but is primarily designed for human, and not computer, consumption. Likewise, TIF, GIF, JPG, BMP and other binary graphics formats.

Note 2: UNICODE is an “update” to ASCII more useful in the international context.

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XML: What Does It Look Like?

•Daniel J. Roberts•324 Willow Lane•Menash•Wisconsin 54952 •USA•1 773 991 8679•Birthdate: ##/##/##

•<presenter>•<name> Daniel J. Roberts</name>•<address>• <number>324</number>• <street>Willow Lane</street>• <city>Menasha</city>• <state>Wisconsin</state>• <country>USA</country>• <postcode> 54952</postcode>•</address>•<telephone>1 773 991 8679 </telephone>•<birthdate>##/##/####</birthdate>•</presenter>

Metadata: information about informationMetadata: information about information

Metadata

Just plain, ordinary informationJust plain, ordinary information

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Agenda

• What is XML

• What is XBRL





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What is XBRL

XBRL is to the printed annual report, what the internet is to the printed

Yellow PagesYellow Pages.

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The Business Information Supply Chain

ExternalFinancialReporting

BusinessOperations

InternalFinancialReporting

Investment,Lending,

RegulationProcesses

Participants

AuditorsTradingPartners

Investors

FinancialPublishersand Data

Aggregators

Regulators

Software Vendors

ManagementAccountants

Companies

Economic Policymaking

XBRLXBRL-FRXBRL-GL XBRL

CentralBanks

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Specification

• XBRL 2.1, Specification– Our solid foundation for building taxonomies

and instances– Can build taxonomies of many types from it

• Financial reporting• Tax• Ledgers

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Taxonomies: Agree on Many Things

XBRL adds to XML:Multi dimensional financial data representations

Financial reporting vocabularies (taxonomies)

Aliases and other definition relationships

Mathematical relationships between concepts

Flexibility about how to present items to users

Structure for authoritative policies and guidance

Building blocks (“discoverable taxonomy sets”).

Capacity to create your own sets of relationships (data owner etc) Plus…. Ubiquitous Extensions

CalculationsCash = Currency + Deposits

CalculationsCash = Currency + Deposits

PresentationCash & Cash Equivalents

PresentationCash & Cash Equivalents

FormulasCash ≥ 0

FormulasCash ≥ 0

ReferencesGAAP I.2.(a)

CoA 1100

ReferencesGAAP I.2.(a)

CoA 1100

DefinitionsRelated to Liquid Assets

DefinitionsRelated to Liquid Assets

ContextsUK $£

FY2003Budgeted

ContextsUK $£

FY2003Budgeted

XBRL<cash>“200”

XBRL<cash>“200”

LabelCash in Bank

LabelCash in Bank

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Taxonomies

• By Jurisdiction – http://www.xbrl.org/FRTaxonomyIndex/

• By purpose– Financial statements– Bank call reports– Tax returns– Accounting detail and summaries

• Focus on Financial Reporting– FRTA provides additional guidance to Spec.

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Agenda

• What is XML

• What is XBRL





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US

CA

SP

IE

UK

SEDK

FI

JP

NZ

KR

SA

NL

IASB

BR

CO

AR

DE CH

CN

RU

PT

IT

NO

SG

BE

FR

AU

IN

XBRL Jurisdictions

HK

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An Analogy for Standards in Business IntegrationCargo Containerization: Data Encapsulation

• Up until the 1960’s– Shipping individual pieces of cargo– Loaded, packed, arranged and

unloaded separately– Significant breakage and pilferage

• Today, Containerization– 90% of world trade moves in

containers– Shipping costs reduced by 70%– More reliable and efficient end-to-end

transport– Enhanced controls

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XBRL Taxonomy Growth

2000 2001 2002 2003 2004 2005 2006Time

Public Taxonomies

June, 2001General Ledger

January, 2004UK GAAP 2.0Canada GAAP

June, 2004IFRS GAAPNZ GAAPUK GAAP

February, 2005US GAAP C&IUS GAAP BankUS GAAP InsSEC CertificationMgmt ReportAccountants ReportMD&A

July, 2005China FrameworkIFRS GAAP US GAAP Invest Mgt

Nov, 2005General Ledger

This does not include any private taxonomies such asthose prepared for statutorypurposes.

2006 - 2007US GAAP

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XBRL Tools Growth(Representative Listing)

2000 2001 2002 2003 2004 2005 2006Time

Tools

CasewareCreative Solutions

DynAccSys Xabra

Fujitsu XWand

J2R Batavia Data Driver

Hitachi CBRP

Metapraxis

Microsoft Business Solutions

Rivet Software

UBMatrix Automator ProDecisionSoft True North

Allocation SolutionsEdgar-Online IMetrix

Hitachi XimbaHitachi XiRute

IBS Open Digital ReportingIpedo EIIOracle XBI Software

UBMatrix Tool KitUBMatrix Converter

Software AG Hyperion

Navision

XBRL SolutionsIBMatrix

FujitsuSAP

Snappy Reports

High Ridge Technologies

FR Solutions

Covarity

SavaNet

FDIC VendorsDBI Financial Systems, Inc.FinArchFRS Global Financial Reporting & AnalyticsIDOM, Inc.Information Technology, Inc.Fidelity Regulatory SolutionsJack Henry & Associates Inc.

Adobe

Core FilingsSemansys IntegratorSemansys Analyzer

Semansys Deployment Manager

Semansys Composer

Carthesis

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Agenda

• What is XML

• What is XBRL





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Imagine a Agency (or a Company)

• With 8200 reporting units.

• Quarterly reporting.

• 6 – 8 weeks to produce the reports that can be shared.

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How would they measure success

• Received data sooner• Publish data earlier• Improved data quality• All validity edits are met• Staff work decreased• Financial Analysts finish assignments faster

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XBRL for Internal Reporting: SOX & Assurance today

SubsidiarySubsidiaryERPERP

CRMCRM

CRMCRM

SBUSBU

ERPERP

ConsolidationConsolidation

Supplemental information

Controls documented Controls documented and built into:and built into:•• individual systemsindividual systems•• manual processesmanual processes

ManagementManagementReportingReporting

ControlControl

ControlControlControlControl

ControlControl

ControlControl

ControlControl

Control ?Control ?

ControlControl

ControlControl

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XBRL for Internal Reporting: SOX & Assurance today

SubsidiarySubsidiaryERPERP

SBUSBU

ERPERPCRMCRM

CRMCRM

ConsolidationConsolidation

Supplemental information

Controls located with Controls located with data or supplemental, data or supplemental,

manual processesmanual processes

ManagementManagementReportingReporting

ControlControl

InternalInternalControl DocsControl Docs

TaxonomyTaxonomy

ControlControl

XBRL

XBRL

XBRL

XBRL

XBRL

XBRL

XBRL

XBRL

XB

RL

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Agenda

• What is XML

• What is XBRL





The CDR (Central Data Repository)

Project

XBRL at FDIC

http://www.fdic.gov/index.html

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FDIC / FFIEC / OCC

How Does FDIC Measure Success?

• Improved data quality– Legacy: 66% clean coming in– CDR: 95% of data ‘clean’, some accepted with explanations - banks

include written explanations with submitted to explain data nuances– Result: Expectations of data are documented, required, and met

• All validity edits are met– Legacy: 70%– CDR: 100%– Result: All data adds up accurately

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FDIC / FFIEC / OCC

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Agenda

• What is XML

• What is XBRL





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Washington, D.C., Feb. 3, 2005 - The U.S. Securities and Exchange Commission today issued a release adopting amendments to establish a voluntary program related to eXtensible Business Reporting Language (XBRL).November 7th, 2005

“In my tenure as Chairman of the Securities and Exchange Commission, I intend to bring our system of corporate disclosure and financial reporting into the 21st century. And while I must tell you that the views I express here are my own, and do not necessarily represent those of the Commission or its staff, you should know that every appointment I make as Chairman willbe consistent with this vision of tapping the possibilities of interactive data.”

January 18th, 2006“During the next 12 months, the SEC will move beyond the EDGAR concept of electronic filing of paper-based forms, to an interactive data concept in which investors can have instant access to data that's ready to use in myriad software applications on their desktops .”

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The 24 Participants in the VFP, as announced on March 29th:

• 3M Company • Altria Group, Inc. • Automatic Data Processing, Inc. • Banco Itaú Holding Financeira S.A. • Brazilian Petroleum Corporation• Bristol-Myers Squibb Company • Crystal International Travel Group, Inc. • The Dow Chemical Company • Ford Motor Company • Ford Motor Credit Company • General Electric Company • Gol Intelligent Airlines, Inc.

• Infosys Technologies Limited • Microsoft Corporation • Net Servicos De Comunicacao SA • Old Mutual Capital, Inc. • PepsiCo, Inc. • Pfizer, Inc. • R.R. Donnelley & Sons Company • Radyne Corporation • South Financial Group, Inc. • United Technologies Corporation • Xerox Corporation • XM Satellite Radio Holdings, Inc.

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The SEC makes its move

• RFP awarded to replace the EDGAR system

• RFPs awarded to provide XBRL rendering software

• Contract with XBRL US, Inc to develop the XBRL US GAAP Taxonomies

• Objective: to enable filers to provide reports to the SEC in XBRL only by early 2008.

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Modernize and Maintain the EDGAR Database to Use Interactive Data — $48 million

The Commission today announced it has awarded a $48 million contract to Keane Federal Systems, Inc., a McLean, Virginia-based subsidiary of NYSE-listed Keane, Inc., to modernize and maintain the Commission’s EDGAR database. As part of its SEC contract, Keane will partner with other technology firms, including Bearingpoint, Microsoft, Rivet Software, EMC, and Akamai, to address the needs of the SEC and investors.

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Complete XBRL Code Writing for U.S. GAAP Financial Statements — $5.5 million

The Commission is announcing its commitment of $5.5 million to complete the writing of XBRL “taxonomies,” or computer labels, so that companies in all industries can file their financial reports. The SEC is contracting with XBRL US, Inc., which is responsible for development of the computer standard in America. It is anticipated that the work will be completed in less than a year.

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Interactive Data Tools for Investors — $500,000

The Commission announced today that it has awarded two separate contracts to provide a new generation of “interactive” investor tools on the SEC’s website.

Using the new features, investors will be able not only to view but to analyze companies’ financials that are filed in XBRL.

The software tools the Commission is purchasing will be available to the public free of charge. With this step, the Commission hopes to accelerate the development of ever-more sophisticated software applications to unleash the power of interactive data.

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Agenda

• What is XML

• What is XBRL





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XBRL is here, who knows where it will go

XBRL is to the printed annual report, what the internet is to the printed

Yellow PagesYellow Pages.

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