XBRL – The New Language of Business

Laurie Ball, CPASwenson Advisors, LLP (Murrieta)

Audit Director

Accounting DayMay 12, 2008

What is XBRL?

XBRL: Officially eXtensible Business Reporting Language Open specification for software that uses

XML data tags to describe financial information

A standards-based method with which users can prepare, publish in a variety of formats, exchange and analyze financial statements and the information they contain

Free! (no licenses or royalties)

XBRL: In English New “language of choice” for electronic

communication of business and financial data throughout the world

Allows for creation of interactive, intelligent data

Digitizes business reports in accordance with the  rules of accounting in each country or with other reporting regimes such as banking regulation or performance benchmarking

In Other Words… A customizable set of rules for attaching

identifying codes – or "tags“– to items of financial information

Often referred to as bar-coding for financial information

Provides links to other valuable information

Biggest Supporters XBRL International SEC Chairman Christopher Cox!!

Chairman Cox recently credited XBRL for:

“…making business reporting easy, transportable and transparent.”

17th XBRL International Conference Eindhoven, Netherlands

May 7, 2008

History of XBRL “New” technology turning 10 years old

later this year! Conceived by a CPA in Tacoma, WA Idea for XBRL originally taken to AICPA

High Tech Task Force AICPA funded prototype project in 1998 XBRL Steering Committee formed in 1999

AIPCA, Big 4, Great Plains and Microsoft among first members

History of XBRL XBRL International held first conference in

London in February 2001 10 countries attended

Jurisdictions of XBRL International formed in October of 2001 Australia Canada Germany IASB Japan Netherlands UK

XBRL International Today, a nonprofit consortium of roughly

550 companies and agencies worldwide working together to promote and support XBRL

Comprised of over 20 local jurisdictions (including XBRL United States)

Attendees from 37 different countries at annual conference last week

XBRL US A nonprofit consortium of roughly

500 organizations including: Accounting firms Software providers Newswires Financial printers and filing agents Information services

XBRL US Members Member organizations a “who’s who” list:

ADP AICPA Big 4 firms CCH Tax and Accounting Dun and Bradstreet Financial Accounting Foundation FDIC IRS Microsoft Morgan Stanley and the list goes on!

XBRL Vocabulary Based on XML

xEtensible Markup Language Resembles HTML as same group developed

both) Tags Taxonomies Instance Files

Tags Must have unique name for all tags such as:

Current assets Inventory Work-in-process inventory

Attributes can be added: Type of value (number vs. date) Normally debit or credit

Arithmetic relationships can be established: Equity equals assets minus liabilities Total assets equals total liabilities and equity

Tags Hierarchical relationships can be established:

Work-in-process is a type of inventory Inventory is a type of current asset A current asset is a type of asset

Links to relevant accounting literature can be made Translatable into other languages worldwide Syntax includes opening and closing tags

A Simple Example

An element, such as a person's first, middle and last name, is “sandwiched” between and opening tag and a closing element tag as follows:

<firstName>John</firstName> <middleName>Henry</middleName> <lastName>Doe</lastName>

Taxonomy File

A long list of tags: Includes various accounting concepts, Information about the attributes of various elements in

the list Databases with information about the external

references associated with the various elements The relationships between the various elements

Concepts and relationships only; does not include any values

More static (i.e., balance sheet)

Instance File

Stores the tagged information for a set of financial statements

Collection of facts only (captions, amounts, dates)

Fluid; changes year to year Filed as an exhibit along with the

Taxonomy File

Who Benefits from XBRL?

Potential Users Public companies Investors Analysts Regulators Financial executives Auditors

Uses of XBRL Aids in preparing, sharing and analyzing

financial statements Can be “extended” to address the specific

reporting needs of companies, industry groups and regulators

Works for non-financial information (performance measures, loan applications, regulatory reporting, statistics)

Primary Benefits Gives investors quick access to

information in a form they can easily use Lets companies prepare their financial

data more quickly, more accurately and for less cost

Makes the world's capital markets truly global and interconnected

Is Anyone Using XBRL Yet?

China Was First China first country in the world to mandate

XBRL reporting Started in 2003 with 50 companies on

voluntary basis Now required for all listed companies on

China Securities Regulatory Commission and the Shanghai Stock Exchange

Program now includes more than 800 companies

Others Followed Suit

Countries who have also made XBRL reporting mandatory:

China Singapore South Korea Israel Japan

Others Are Preparing

Some of the world's largest economies have made, or announced plans to make, XBRL reporting mandatory:

Australia India United Kingdom Committee of European Securities

Regulators United States

Current US Users

Over four dozen public reporting companies now voluntarily participate in the SEC’s pilot program including: Alcoa Inc. Xerox Corp Healthcare Realty Trust, Inc. ICU Medical, Inc. Coca Cola Enterprises, Inc.

Is XBRL Required in the US?

Not Yet…but Soon!

In May 2008 remarks, Chairman Cox said:“As most of you know, the SEC will be discussing a rule later this month that would set a firm schedule for using interactive data in public company filings in the United States.”

Chairman Cox went on to say:“With a complete set of data tags for U.S. generally accepted accounting principles now in hand, we in the United States are ready to "go live" with interactive data. The preparer's guide is there, the software and vendor communities are there, and even the viewers and investor tools are there. Everything is in place.”

Resources & Tools

Tagging Software

Reads the line item description and “suggests” the tag or tags that are most likely to be appropriate

Usually makes the right guess but can “correct” as needed: Search list for a different tag Go directly to the corresponding accounting

literature descriptions if uncertain

Accounting Software

Tags “automatic” -- XBRL data tagging is an integral part of the system

Less costly and easier to prepare financial statements

Less risk of human error

Resources

Major financial printers and filing agents XBRL International websites:

www.xbrl.org www.xbrl.us

SEC website: Spotlight on Tagged Data and XBRL Initiatives for EDGAR Filings (http://sec.gov/spotlight/xrbl.shtml)

Software vendors

Contact me at

laurie.ball@swensonadvisors.com

Questions?