xbrl the emerging landscape
TRANSCRIPT
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XBRLisapowerfulandexibleversionofXML,whichhasbeendenedtomeettherequirementsofbusiness
andnancialinformation.Itenablesuniqueidentifyingtagstobeappliedtoitemsofnancialdata,suchasnet
income.However,thesearemorethansimpleidentiers.Theyprovidearangeofinformationabouttheitem,
suchaswhetheritisamonetaryitem,percentageorfraction.XBRLallowslabelsinanylanguagetobeapplied
toitems,aswellasaccountingreferencesorotherinformation.
Q2. What is an XBRL taxonomy and how is a taxonomy developed and used?
XBRLtaxonomies,whicharemadepubliclyavailable2,arethedictionariesthatthelanguageuses.Taxonomies
specifythetagstobeusedforindividualitemsofinformation,suchasthetagforthelineitemcashandcash
equivalents.Taxonomiesalsoidentifyrelationshipsbetweenterms,forexample,thetermcashandcashequiva -
lentsisrelatedtothetermcurrentassets.Businessrulescanalsobeexpressedwithinataxonomy,suchasthe
beginningbalanceofcashandcashequivalentsplusthenetchangesincashmustequaltheendingbalanceof
cashandcashequivalents.Insomejurisdictions,reportingentitiesmayaddtothedictionariesofterms,rela -
tionships,andbusinessrules(thatis,createextensionsinthetaxonomy). Nationaljurisdictionsoftenhavedifferentaccountingregulations,soeachmayhaveitsowntaxonomyfor
nancialreporting,forexample,aDutchtaxonomy.Taxonomiescanalsobeinternationalandrelevantforthe
preparationofgeneralpurposenancialstatementsinXBRL,forexample,theInternationalFinancialReport -
ingStandards(IFRS)taxonomydevelopedandissuedbytheInternationalAccountingStandardsCommittee
Foundation.Organizationswhoestablishtaxonomiesmaymakechangesinthetaxonomiesfromyeartoyearto
reectchangesintheunderlyingaccountingframeworkandpreparersofXBRL-taggeddataneedtobeawareof
themostcurrenttaxonomysothatdataproducedfromXBRLisconsistentandcomparable.
Whilestandardizedtaxonomiesexist,taggingnancialstatementscanrequireasignicantamountofjudgment
onthepartofthepreparer.Theremaybemultipletagsthatcouldbeseenasapplicabletoaparticularnancial
statementlineitem,andpreparerswhoarenotwell-acquaintedwiththetaxonomymaynotbeawareofthetagsthatexistandmaycreateextensionstothetaxonomywhentheyarenotneeded.Thisaffectsthecomparability
ofXBRL-taggeddataandunderminestheusefulnessofXBRLasoriginallyintended.
Sincetaxonomiesareperiodicallyrevisedandupdated,preparersneedtoensurethattheappropriatetaxonomy
hasbeenusedtotagthenancialstatements.
Q3. How do entities generate XBRL tagged-data?
ThereareanumberofwaystogenerateXBRL-taggeddata:
FinancialstatementscanbemanuallytaggedinXBRLusingXBRLsoftwaretoolsdesignedforthispurpose.
XBRL-awareaccountingsoftwareproductsarebecomingavailablewhichwillsupporttheexportofdatain
XBRLformat.ThesetoolsallowforXBRLtagstobeappliedwithinthesoftwarepackageatthetransactionalortrialbalancelevel,forexamplethroughtheuseoftheXBRLGlobalLedgertaxonomy.
CurrentlyintheUnitedStates,specializedentitiesprovideXBRLservicestonancialstatementissuers
wherebytheentireprocessofmappingnancialstatementstothetaxonomiesandcreatingtheXBRLlesthat
aresubmittedtotheSecuritiesandExchangeCommissions(SEC)EDGARsystemisoutsourcedbytheissuer
totheseproviders.
Theroutewhichanindividualentitymaytakewilldependonitsrequirementsandtheaccountingsoftwareand
2 XBRLInternationalisanot-for-protconsortiumworkingtobuildtheXBRLlanguageandpromoteandsupportitsadoption.Taxonomiesthatarerecog-
nizedbyXBRLInternationalcanbefoundathp://.xbl.g/txm/.
http://web.ifac.org/clarity-center/support-and-guidancehttp://web.ifac.org/clarity-center/support-and-guidancehttp://www.xbrl.org/Taxonomies/http://www.xbrl.org/Taxonomies/http://www.xbrl.org/Taxonomies/http://web.ifac.org/clarity-center/support-and-guidancehttp://web.ifac.org/clarity-center/support-and-guidance -
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systemsitcurrentlyuses,amongotherfactors.Atpresent,themajorityofentitiesareusingbolt-onapplica-
tionswhichconsistofusingsoftwaretoapplyXBRLtagstothetraditionalnancialstatementsasaseparate
process(therstbulletpointabove).
PreparersgenerallydevisecontrolstobeappliedtotheirXBRL-taggingactivities.Thenatureofthesecontrols
willdifferdependinguponthewayXBRL-taggeddataisgenerated.
Q4. How may XBRL aect fnancial reporting?
TheuseofXBRLisexpectedtoprovidebenetsinthepreparation,analysisandcommunicationofbusiness
information.Itofferspotentialcostsavingsandimprovedaccuracyofinformationforthoseinvolvedinsupply-
ingorusingnancialdata.XBRLcurrentlyisbeingputtopracticaluseinanumberofcountriesandimplemen -
tationsofXBRLareexpandingaroundtheworld.
SharingofinformationinXBRLformatisintendedtoincreasethespeedofhandlingofnancialdata,reduce
thechanceoferrorandpermitautomaticvalidationofinformation.Usersofnancialdata,includinginvestors,
analysts,nancialinstitutionsandregulators,likelycanreceive,nd,compareandanalyzedatamorerapidly
andefcientlyifitisinXBRLformat.XBRLcanhandle(andtranslate)dataindifferentlanguagesandaccount -
ingstandards.Itcanbeadaptedtomeetdifferentrequirementsanduses.
ThedemandforthebenetspromisedbyXBRLisunderpinnedbytheever-presentneedofallthoseinthe
informationsupplychainformoreextensivenancialandnon-nancialinformation,producedonatimely
basis,inaneasilyacceptableform,andwherepossible,tailoredtospecicneeds.ItisXBRLsabilitytoboth
speedupthereportingcycleandprovidemore,andre-useable,informationinacost-effectivemannerthatmay
ultimatelyrespondtothoseneeds.
XBRLisanenhancementoftraditionalmodesofnancialreporting.Ascurrentlyused,itdoesnotprovide
moredatathanstandardnancialstatements;itprovidesthedatainaformatthatcomputerscansort,group,
andcategorize.
Whenusedcorrectly,XBRLchangestheappearanceandimprovesthedeliverymechanismfornancialstate-
ments,butitdoesnotaltertheirmeaning.However,nancialinformationprovidedinXBRLinstancedocu -
mentsisonlyasreliableastheunderlyingnancialdatausedandtheaccuracy,consistencyandcompleteness
ofthetaggingappliedtothatdataincreatingtheXBRLles.
Q5. What level o involvement do auditors o the fnancial statements have with XBRL-tagged data?
TheIAASBscurrentauditingstandardswerenotdevelopedwithXBRLinmindand,accordingly,donotimpose
anobligationontheauditorwithrespecttoXBRL-taggeddata.
ISA720,3theIAASBsstandarddealingwiththeauditorsresponsibilitiesrelatingtootherinformationindocu -
mentscontainingauditednancialstatementsandtheauditorsreportthereon,denesotherinformationas
nancialandnon-nancialinformation(otherthanthenancialstatementsandtheauditorsreportthereon)
whichisincluded,eitherbylaw,regulationorcustom,inadocumentcontainingauditednancialstatements
andtheauditorsreportthereon.XBRL-taggeddatadoesnotrepresentotherinformationascontemplated
inISA720,becauseitissimplyamachine-readablerenderingofthedatawithinthenancialstatements,rather
3 InternationalStandardonAuditing(ISA)720,TheAuditorsResponsibilitiesRelatingtoOtherInformationinDocumentsContainingAuditedFinancial
Statements.AtitsDecember2009meeting,theIAASBapprovedaprojecttoreviseISA720.Theprojectproposalcanbeaccessedat: hp://.fc.
g/iaasB/Mg-FldL.php?Fid=5139.
http://www.ifac.org/IAASB/Meeting-FileDL.php?FID=5139http://www.ifac.org/IAASB/Meeting-FileDL.php?FID=5139http://www.ifac.org/IAASB/Meeting-FileDL.php?FID=5139http://www.ifac.org/IAASB/Meeting-FileDL.php?FID=5139 -
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thanotherinformation,asitisdened.
Further,theISAnotesthatthephrasedocumentscontainingauditednancialstatementsreferstoannual
reports(orsimilardocuments),thatareissuedtoowners(orsimilarstakeholders),containingauditednancial
statementsandtheauditorsreportthereon.InthemostcommonlyusedmodelofXBRLreportingatpres-
ent,thenancialstatementsaretaggedinaseparateprocessandledwithregulatorsorwithtaxauthorities.
BecausethelingofthisXBRL-taggeddataisnotadiscretedocument,theIAASBsdiscussionsatitsSeptember
2009meetingindicatedthattheBoardisnotoftheopinionthattherequirementofISA720fortheauditorto
readtheotherinformationforpurposesofidentifyingmaterialinconsistenciesormaterialmisstatementsof
factwouldbeapplicabletoXBRL-taggeddata.TherequirementintheIAASBsstandarddealingwithreviewsof
interimnancialinformation 4toreadotherinformationthataccompaniesinterimnancialinformationequally
wouldnotapplytoXBRLtagged-dataeither.
TheIAASBsreportingstandardsdonotprecludetheauditorfromevaluatingtheneedsofusersoftheauditorsreportand,ifconsiderednecessary,clarifyingtheassociationwithXBRL-taggeddataintheauditorsreport.
Thismaybedone,forexample,byidentifyingwhatnancialinformationiscoveredbythatreport,orincluding
anOtherMatterparagraphintheauditorsreport.
RequirementsrelatingtoassuranceandauditorinvolvementwithXBRL-taggeddatawilllikelydependonthe
regulatoryframeworksinwhichsuchdataisled.Atpresent,itisunclearwhetherassuranceislikelytoberequiredonXBRL-taggeddatainthefuturebyregulators 5orrequestedbypreparers,orbyinvestorsorother
nancialstatementusers.
Q6. What types o engagements might practitioners be asked to perorm with regard to XBRL?
WhileauditorsarenotrequiredtobeinvolvedwithXBRL-taggeddataanddonotprovideassuranceonsuch
datainthecontextofanauditofnancialstatements,theremaybeademandforservicestobeperformedby
practitioners.Suchservicesmayinclude:
Agreed-uponproceduresengagementsonXBRL-taggeddata,toassistmanagementinitsevaluationofthe
XBRL-taggeddataandtheauditcommitteeinitsoversightrole.
Assuranceengagements,forexample,assuranceonthecontrolsrelatedtotheXBRL-taggingprocessand
examinationsoftheaccuracyoftheXBRL-taggeddataitself.
4 InternationalStandardonReviewEngagements(ISRE)2410,ReviewofInterimFinancialInformationPerformedbytheIndependentAuditorofthe
Entity.
5 Forexample,U.S.SECReleaseNo.33-9002doesnotcurrentlyrequireanyauditorinvolvementregardingthesubmissionofXBRL-taggeddataprovided
asanexhibittoacompanysquarterlyorannualreportsorregistrationstatements.Thenalrulespecicallynotesthatanauditorwillnotberequiredto
applyAUSections550,722,or711totheinteractivedataprovidedasanexhibitinacompanysreportsorregistrationstatements,ortotheviewableinter -
activedata.TheseU.S.auditingstandardsaddressotherinformationindocumentscontainingauditednancialstatements,interimnancialinforma-
tion,andlingsunderFederalSecuritiesStatutes,respectively.However,theSEChasstatedthatitexpectspreparersoftaggeddatatotaketheinitiativeto
developpracticestopromoteaccurateandconsistenttagging.
a ac h XBrL
CurrentISAsdonotrequireauditorstoperformproceduresonXBRL-taggeddataaspartofthenancialstatementaudit.Accordingly,theauditorsreportinaccordancewiththeISAsonthenancialstatements
doesnotcovertheprocessbywhichXBRLdataistaggedortheXBRL-taggeddatathatresultsfromthispro -
cess,andnoassuranceisgivenontheaccuracy,consistencyandcompletenessoftheXBRL-taggeddataitself.
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Assuranceengagementsonnancialinformationaspresentedinparticularpre-denedinstancedocuments.
AdviceontheXBRLimplementationprocess,wherenotprohibitedbyrelevantindependencerequirements.
PreparationoftheXBRL-taggeddata,wherenotprohibitedbyrelevantindependencerequirements.
Q7. What is the IAASB doing in the area o XBRL?
InMarch2009,theIAASBapprovedaprojectproposal6relatingtoXBRLandhasembarkedonaconsultation
processtodeterminetheneedsofusersofXBRL-taggeddataandothers.ThisconsultationwillassisttheIAASB
inassessingwhetheritisnecessaryandinthepublicinteresttodevelopapronouncementaddressingXBRL.
TheXBRLTaskForceiscurrentlyliaisingwithnationalstandardsetters,XBRLInternationalsAssurance
WorkingGroup,IFACmemberbodies,andotherregionalorganizationsthatarecurrentlyprogressingXBRL
initiatives.Theinformationgatheredduringtheseinformalconsultationswillbeusedtodevelopamoreformal
publicconsultationanticipatedinmid-2010.
Q8. What are the areas that need urther consultation? Aspartofitsconsultationprocess,theIAASBwillneedtoconsideranumberofissuestoassesstheperceptions
about,andthepotentialdemandfor,auditorassociationwithXBRL-taggeddata,includingassuranceneeds.
SuchissuesincludehowXBRLisactuallybeingusedindifferentjurisdictionsasitrelatestothelingofan
entitysnancialstatements,forexample:
WhetherXBRLdataisrequiredtobeledinadditiontoanentityspaperorelectroniclingwiththerelevant
authorityorinlieuofsuchlings.Ifthelatteriscontemplated,itwillbeimportantfortheIAASBtounder -
standthetimelineandhowthiswillchangetheauditreportingmodel.RegardlessofhowXBRLiscurrently
used,thenatureandextentofitsusebyinvestorsandregulatorsinthefuturemaychangehowauditorsare
associatedwithXBRLinthefuture.
TheextenttowhichassuranceoninformationdisseminatedinXBRLformatisrequiredbylaworregulationordemandedinaparticularmarketplace.
Inaddition,consultationwithpractitionersandpreparerswillbeimportanttounderstandwhetherpractitio -
nersarebeingrequestedtoperformnon-auditserviceswithregardtoXBRL-taggeddataandwhattheassurance
needsare.
Inadvanceofdevelopinganewpronouncementorguidance,itwillbealsocriticalfortheIAASBtoexplore
whetheritisfeasibletodevelopapronouncementthatwillberelevantinaglobalcontextgiventheevolving
landscapeofXBRL.
AtitsDecember2009meeting,theIAASBdiscussedhowbesttoapproachthisconsultation.7Itwasagreedthat
targetedconsultationwithkeystakeholders,complementedbyabroaderpublicsurvey,wouldservetoinform
theIAASBsviewsinanticipationofitsJune2010discussions.
Q9. Where can I fnd more inormation about XBRL?
VisittheprojecthistoryonXBRLathp://.fc.g/iaasB/PjcH.php?Pjid=0093.Read-
ersarewelcometocommentonanymattersexplainedinthisQ&AoronXBRLbroadly,oralerttheIAASBto
relevantdevelopmentsonXBRLintheirparticularjurisdictions.
6 Theprojectproposalcanbeaccessedat:hp://.fc.g/iaasB/Mg-FldL.php?Fid=4614.
7 Theproposedconsultationplancanbeaccessedathp://.fc.g/iaasB/Mg-FldL.php?Fid=5097.
http://www.ifac.org/IAASB/ProjectHistory.php?ProjID=0093http://www.ifac.org/IAASB/Meeting-FileDL.php?FID=4614http://www.ifac.org/IAASB/Meeting-FileDL.php?FID=5097http://www.ifac.org/IAASB/Meeting-FileDL.php?FID=5097http://www.ifac.org/IAASB/Meeting-FileDL.php?FID=4614http://www.ifac.org/IAASB/ProjectHistory.php?ProjID=0093 -
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