XBRL: The Extensible Business Reporting Language

1
XBRL The Extensible Business Reporting Language

• 14th Biennial Forum of Government Auditors
• 20-May-2002

Neal J. Hannon Chair, XBRL International
Education Work Group Co-Founder, XBRL Center at
Bryant College nhannon_at_bryant.edu
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Agenda

• XBRL US and Worldwide
• Making the Case for XBRL
• Government XBRL Applications
• Inside XBRL
• The Future of Digital Reporting

3
XBRL UPDATE

• FDIC to run pilot program for Call Sheets
• Proof of concept is complete
• RFQ in second quarter of 2002
• Pilot program for 2003
• APRA XBRL in use for all required filings in
  banking and insurance industry in Australia
• Microsoft and Reuters publish in XBRL

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XBRL Update

• The Bank of America/ Moodys Connection
• Dresner and Deutsche Bank
• GE Financial (tax consolidations)
• Inland Revenue
• 260 people attended Berlin, Germany conference
• Over 50 Japanese companies members of XBRL-Japan
• Total consortium membership projected to exceed
  200 by 2003

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XBRL The Technology

• Specification v2
• XML
• XML Schema
• XML Linking Language (XLink)
• Computation, Version Control, Mapping, Entity,
  and other Linkbases are Works in Progress
• Interoperability
• Summits I II
• Learn more _at_ http//www.omg.org/interop/

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XBRL The Organization

• History
• Founded by the AICPA in 1998 (13)
• Spin Out into International Organization in 2002
  (gt140)
• Organizational Matters
• Structure of XBRL
• Liaison work
• Next International Meeting in Toronto June 17
  21, 2002
• Jurisdictional Growth
• Active Australia, Canada, Germany, IASB, Japan,
  UK, US, Singapore
• Development Belgium, Hong Kong, India, Ireland,
  Netherlands, New Zealand, South Africa, Spain,
  Sweden, Taiwan

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Executive Committee
International Steering Committee Chair
At Large ISC Members
1st
2nd
3rd
4th
Web site Committee
XBRL Management CEO
Supply Chain Participants
Jurisdictions
International Working Groups
1st Vice Chair
Preparer, Private Sector
Specification
Accounting
Standing
CA
AU
Developers
Intermediaries
IASB
DE
Liaison
Software Services
SG
JP
Mktg Comm
Investors/Creditors
US
UK
Education
Analyst
Research
Regulators
Academic
General Ledger
Public Sector Preparers
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XBRL InternationalGovernance Operational
Structure
Executive Committee
International Steering Committee Chair - Hamscher
Web site Committee Chair - Watson
XBRL Management CEO (Acting) Louis Matherne
Supply Chain Participants
Jurisdictions
International Working Groups
1st Vice Chair Kurt Ramin
Preparer, Private Sector - OPEN
Specification - Hampton
Accounting - Willis
Standing
CA - Cuthbertson
AU -Hardidge
Developers - OPEN
Intermediaries - Watson
DE - Fuhrmann
Liaison Coffin (Acting)
Software Services - Blake
IASB - Ramin
JP - Watanabe
Mktg Comm. - Colgren
SG - Tang
Investors/Creditors - Flickinger
Education - Hannon
UK - Rodgers
Analyst - Schnitzer
US - Matherne
Research - Srivastava
Regulators - Walenga
Academic - OPEN
GL - Cohen
Public Sector Preparers - OPEN
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XBRL Taxonomies

• IASB Commercial Industrial
• IASB Commercial Industrial for AU, NZ, SG, UK,
  HK,
• Japan Statutory Accounts
• Germany Statutory Accounts
• International General Ledger
• U.S. Commercial Industrial
• U.S. Investment Management
• U.S. Federal Government General Ledger (KPMG
  developed)
• U.S. Non-Profit Form 990
• Other specific sector based taxonomies under
  development.

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XBRL Support

• I would like to see you develop valuation models
  that result in consistent, comparable and fair
  values of assets and liabilities. I would like to
  see you hone specific, but plain English
  definitions for the types of information you
  believe should be included in public disclosure.
  I would like to see you take your XBRL project a
  step further, providing account classifications
  for companies in common industries. In short, I
  challenge you to turn all of this data into
  meaningful information for investors.
• - Arthur Levitt, Chairman, U.S. Securities
  Exchange Commission
• October 24, 2000, at the Fall Council of the
  AICPA (Las Vegas, Nevada)

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Microsoft CFO on XBRL

• "Through Internet delivery, XBRL will also
  provide analysts and investors with extensible
  financial data to make informed decisions about
  the company. We see XBRL as not only the future
  standard for publishing, delivery and use of
  financial information over the Web, but also as a
  logical business choice."
• John Connors, Chief Financial Officer, Microsoft

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The Capital Markets

• NASDAQ joins shoulder to shoulder in the effort
  of the XBRL Consortium to adopt this new, freely
  available technology because it feels that
  improving the distribution and analysis of
  corporate results, especially for the 10,000
  companies not covered by Wall Street analysts
  will broaden the market for NASDAQs own trading
  services
• Michael Sanderson, CEO NASDAQ Europe

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Transparency in Financial Reporting

• Reuters reputation stands on its ability to
  communicate and the extensible business reporting
  language standard it has employed this week to
  publish accounts online is amongst the most
  significant of developments in promoting
  transparency in financial information
• Accountancy Age, 1 November 2001

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Message to Congress on Post Enron Environment

• One large scale and potentially revolutionary
  private sector initiative that already is
  underway is a collaboration of growing companies,
  accounting firms and the AICPA to develop a
  common tagging system for various financial
  accounts, which goes under the acronym XBRL.
  I would urge the SEC (and if necessary, urge the
  Committee to urge the SEC) to encourage this
  project One possibility require EDGAR
  submissions to be in XBRL by a specific date.
• Bob Litan, Brookings Institution Bear Stearns
  testimony to U.S. Senate Banking Committee on
  post-Enron, March 14, 2002

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Implementations/Vendors

• ACCPAC
• Caseware
• Creative Solutions
• Enumerate
• FRSolutions
• MSFT/Great Plains/Navision
• Fujitsu
• Hitachi
• Hyperion
• KPMG
• Moodys
• NewTec
• SAP
• Semansys
• Software AG
• UBMatrix

• APRA
• FDIC
• UK Inland Revenue
• GRE Credit RM
• General Electric

• Morgan Stanley
• Reuters
• Microsoft

• Edgar-OnLine
• Moodys
• Edgarscan

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Agenda

• XBRL US and Worldwide
• Making the Case for XBRL
• Government XBRL Applications
• Inside XBRL
• The Future of Digital Reporting

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eXtensible Markup Language (XML)

• is a meta markup language the World Wide Web
  Consortium (W3C) considers a universal standard
  for describing both structured data and the
  behavior of applications that process the
  language.

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XML is
Platform Independent
Self-Describing

• Example
• ltDATEgtJuly 26, 1998lt/DATEgt
• Describes the information, not the presentation
• Format neutral

• Windows
• Unix
• Macintosh
• Mainframe
• Linux

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Content and Context

• Thousands of companies release financial results
  quarterly
• The contents are not organized. The data must be
  re-entered into computer applications for
  interpretation.
• What if financial documents included both
• Content (75,044,453) and
• Context (75,044,453net income for Q1/2001)

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XML Markup What Does it Look Like?

• ltnamegtMichael M. Millerlt/namegt
• ltaddressgt
• ltstreetgt8080 Hill Circlelt/streetgt
• ltcitygtLincolnlt/citygt
• ltstategtMassachusettslt/stategt
• ltcountrygtUnited States of Americalt/countrygt
• ltpostcodegt01738lt/postcodegt
• lt/addressgt
• lttelephonegt6175151424lt/telephonegt
• ltbirthdategt19/10/1958lt/birthdategt

• Michael M. Miller
• 8080 Hill Circle
• Lincoln, MA 01738
• 1 [phone]
• Birthdate 19 October 58

Ordinary information
Metadata Information about information
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Structured Content allowsData reuse,
comparability, aggregation
Regulatory filings
Tax Return
Explanatory text
Document (Data with Metadata)
Bank filings
Accounting system
Other information
Website
sources
Printed Financials
Schemas (Standard Definitions)
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Structured Content allowsData reuse,
comparability, aggregation
Regulatory filings
Tax Return
Explanatory text
XBRL Instance
Accounting system
Bank filings
Website
Other information sources
Printed
Financials
XBRL Taxonomies
Investor Analytics
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Die Supply-Chain für Finanzdaten
Source XBRL Deutschland
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XML is Expandable

• Whereas
• HTML has a fixed set of tags (ltH1gt, ltBgt, ltPREgt)
  aimed at data presentation
• XML lets you create your own tags
• ltsugary-substancegt
• ltShakespearean-charactergt
• ltcash-equivalentgt
• The key focus is on content, not presentation

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The XML Puzzle
XML Document
Industry Specific Vocabularies
Company Specific Vocabulary
Core Schema
Transformation Tools
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What is XBRL?

• XBRL is a freely available electronic language
  for financial reporting
• XML-Standards based method to
• Prepare,
• Reliably Extract,
• Exchange on a system to system basis
• Publish company financial data
• Potential for extensive use in government
  accounting

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XBRL Builds on XML and SGML
Industry Developed, Supported
XBRL
2001
XML and XML enabling technologies X-Link, X-Schema
W3C Supported
1998
ISO Standard
SGML Standard Generalized Markup Language
1986
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Evolution to Web Services
Program the Web
Web Services
Browse the Web
Web Pages
Text Files
Automation
FTP, E-Mail,Gopher
Presentation
Connectivity
TCP/IP
HTML
XML
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How XBRL Solves Problems
Improves the way companies -- and applications
-- share business reporting information
5. XBRL data is used in the government
application and/or other comparable programs
3. XBRL information flows freely across the
Internet or VPN, LAN and WAN
1. Client Specific Data
Financial data multiple systems
FDIC Call Report
XML/XBRL translator
XML/XBRL translator
Common XBRL Vocabulary
Client COA to FDIC Taxonomy
FDIC Taxonomy
2. Application data is selected, cleaned and
tagged in XBRL
4. XBRL-tagged data is mapped into applications
specific data such the FDICs Call Reports
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What software sees is the differentiator and
drives benefits
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Benefits

• XBRL is
• NOT a new accounting standards but enhances the
  distribution and usability of existing financial
  statement information
• Enabler and an extension for native-XML database
  functionality for all financial statement
  information
• Can be stored as a form or a separate financial
  fact

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Raw XBRL
ltnumericContext id"rg.cy00.jpy" cwa"false"
precision"4"gt ltentitygt ltidentifier
schemeTicker"gtrglt/identifiergt lt/entitygt ltper
iodgt ltstartDategt2000-01-01lt/startDategt ltendD
ategt2000-12-31lt/endDategt lt/periodgt ltunitgt lt
measuregtiso4217jpylt/measuregt lt/unitgt lt/numeric
Contextgt
Rock Gravel Corp. Period from 1 Jan 2000 to 31
Dec 2000, In Yen Precise to 4 digits
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XBRL as a Translator

• Accounting is fragmented
• Hundreds of accounting software packages
• Many correct ways to interpret GAAP and
  Governmental accounting
• XBRL as common denominator
• Each set of financial data can conform to a
  single taxonomy.

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Who defines the tags?

• Tags are defined by industry consortiums
• Each industrys standard tags are commonly
  referred to as a taxonomy

37
XBRL Taxonomies in 2002

• Best practices
• e.g. ast.amz.goodwill Amortization of Goodwill
• e.g. Assets have current non current
  children
• e.g. Reusable common components taxonomy
• Focused development efforts
• IAS Taxonomy Core financials, Core Notes
• US GAAP CI Taxonomy
• UK GAAP CI Taxonomy
• Inland Revenue Computation Taxonomy
• FDIC Taxonomy (US)
• Canadian GAAP, others.
• US Standard GL taxonomy (Federal Govt.)

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XBRL for General Ledger
Developing an international core for reporting
general ledger transactions
39
XBRL.org Specifications
XBRL for Financial Statements
XBRL for General Ledger
XBRL for EDGAR Filings
External Financial Reporting
Business Operations
Internal Financial Reporting
Investment and Lending Analysis
Processes
XBRL for Audit Schedules
XBRL for Tax Filings
XBRL for Business Event Reporting
Investors
Financial Publishers and Data Aggregators
Companies
Participants
Auditors
Trading Partners
Regulators
Management Accountants
Software Vendors
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XBRL- General Ledger Goal

• A cross-jurisdictional, cross-industry
  fact-gatherer for representing the information
  found in a General Ledger, internationally.
  Bringing standardization to

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Requirements for XBRL GL
A Standard Format for

• 3rd party software to create journal entries to
  pull into client GL system
• To move unposted and posted GL information from
  divisions to consolidating systems, budgeting
  ,forecasting, reporting tools, and back
• To upload general ledger information, payables,
  receivable files and open balances for system
  migration or interfacing with Internet ASP

42
Requirements for XBRL GL
Standard Format to move information

• From client's systems to CPA
• From one CPA system (eg, write-up) to another
  (eg, tax) in an international context.
• Open receivables, open payables, inventory
  balances, and other asset-based measures for
  sharing with banks
• Detail drill-down for performance measurement
  reporting items

Standard Format to Represent
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Requirements for XBRL GL

• Extensible for any type of mandatory audit trail
• Extensible for meeting any "sub-ledger" need
• Designed as XBRL spec-compliant but for easy
  translation to other uses
• Cannot assume that XBRL period, entity, unit and
  other context (numeric, nonnumeric) will
  automatically be there.

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Accounting Bridging eBusiness and
Financial Reporting
Detail
Accounting Recognition
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XBRL-GL From Business Transactions to Financial
Statements
XBRL For Financial Statements
Recommended status 3/15/02
XBRL GL Core
Unique to each organization
XBRL GL Custom
Business Transactions
Not XBRL function of other consortiums
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XBRL-GL From Government Transactions to
Financial Statements
XBRL For Financial Statements
Federal Government Core
XBRL GL Core
Health and Human Services
XBRL GL Custom
Government Transactions
Not XBRL function of other consortiums
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General Ledger Holds More Valuable Information
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Components to Make Things Happen

• XBRL-GL Taxonomy - Uses Specification 2.0
• Core Schema
• Basic Concepts (with definitions) as structure
  for extension
• Presentation linkbase
• Default presentation order
• Label linkbase
• Default human readable labels

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Overview of the Structure of the GL Taxonomy

• Three Primary Levels
• accountingEntries
• entryHeader
• entryDetail

GL Journal Batches Target and Source
Application Creator Organization
GL Journal Header Journal Identifiers Entered
by Entry Date Posting Date Hash Totals
GL Journal Detail Lines Detail Identifiers Line
Number Amount Account XBRL Reference
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ReconciliationsAR
4. XBRL US ci accountsReceivableTradeNet.accountsR
eceivableTradeGross
US GL
xbrlElementaccountsReceivableTradeNet.accountsRe
ceivableTradeGross xbrlTaxonomyusgaap
Continential GL
US AR
3. XBRL GL entriesTypebalance summarized
amounts in account, period in time
or
Do the entries in 2 or 3 map to the total in 4??
2. XBRL GL entriesTypeentries represents
individual detail of entries
Do the entries in 2 sum up to the balances in 3?
Are all documents from 1. reflected in the
detailed entries of 2.? (documentTypeinvoice,
etc.)
1. XBRL GL entriesTypeassets represents AR
aging
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Cash Reconciliations and Tests
4. XBRL US ci cashAndCashEquivalents.Cash
US GL
xbrlElementcashAndCashEquivalents.Cash xbrlTaxo
nomyusgaap
Continential GL
US AR
3. XBRL GL entriesTypebalance summarized
amounts in account, period in time
or
US AP
2. XBRL GL entriesTypeentries represents
individual detail of entries
documentType check debit-memo credit-memo financ
e-charge invoice reminder voucher manual-adjustmen
t other
1. XBRL GL entriesTypeassets represents
detail of invoices, payments, etc. from both AR
and AP
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Standard Terms
Source Journal
ap cd cr gj pj pl sj se ud
Account Type
consolidating european iasb offsetting primary tax
usgaap other
Document Type
Document Type
adjusting budget comparative external-accountant s
tandard passed-adjusting eliminating proposed recu
rring reclassifying simulated tax other
check debit-memo credit-memo finance-charge invoic
e reminder voucher manual-adjustment other
account balance entries journal ledger assets tria
lbalance other
account bank employee customer job vendor fixed-as
set
- plus minus
account bank employee customer job vendor fixed-as
set
Account Class
asset liability equity income gain expense loss co
ntr-to-equity distr-from-equity comprehensive-inco
me
deferred posted proposed simulated tax unposted ot
her
beginning_balance ending_balance period_change oth
er
debit credit
CVE Type
customer employee vendor other
Debit/Credit
supplement supercede
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XBRL-GL

• Files and more information can be found at
  www.xbrl.org/gl/gl.htm

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Agenda

• XBRL US and Worldwide
• Making the Case for XBRL
• Government XBRL Applications
• Inside XBRL
• The Future of Digital Reporting

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XBRL US Federal Agencies

• Joint Financial Management Improvement Program
  (JFMIP) 2001 report
• JFMIP includes Department of Treasury,
  General Accounting Office, Office of Management
  and Budget, and the Office of Personnel
  Management.
• Core Financial System Requirements states To
  meet JFMIP interoperability requirements, the
  Core Financial system should support emerging
  XML-based specifications for the exchange of
  financial data such as Extensible Business
  Reporting Language (XBRL). Value Added Feature
  
• http//www.jfmip.gov/jfmip/.

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Commercial Financial Information Supply Chain
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Government Financial Information Supply Chain
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Federal Generally Accepted Accounting Principles
Hierarchy

• Department of Agriculture
• Department of Commerce
• Department of Defense
• Department of Education
• Department of Energy
• Department of Health and Human Services
• Department of Housing and Urban Development
• Department of the Interior
• Department of Justice
• Department of Labor
• Department of State
• Department of Transportation
• Department of the Treasury
• Department of Veterans Affairs

• Agency for International Development
• Environmental Protection Agency
• Federal Emergency Management Agency
• General Services Administration
• National Aeronautics and Space Administration
• National Science Foundation
• Nuclear Regulatory Commission
• Office of Personnel Management
• Small Business Administration
• Social Security Administration

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SFFAS Promulgation Process
Treasury http//www.treas.gov
Draft Statements of Federal Financial Accounting
Standard SFFAS
Federal Accounting Standards Advisory
Board FASAB (9 Board Members)
Appoints
Appoints
OMB http//www.whitehouse.gov/omb
GAO http//www.gao.gov
Statements of Federal Financial Accounting
Standards Amendments SFFAS 1 - Accounting for
Selected Assets and Liabilities SFFAS 2 -
Accounting for Direct Loans and Loan
Guarantee SFFAS 18 SFFAS 3 - Accounting for
Inventory and Related Property SFFAS 4 -
Managerial Cost Accounting Concepts and
Standards SFFAS 5 - Accounting for Liabilities
of the Federal Government SFFAS 12 SFFAS 6 -
Accounting for Property, Plant and
Equipment SFFAS 11, 14 16 SFFAS 7 - Accounting
for Revenue and Other Financing Sources SFFAS
13 SFFAS 8 - Supplementary Stewardship
Reporting SFFAS 11, 14 16 SFFAS 9 - Deferral
of Implementation Date for SFFAS 4 SFFAS 10 -
Accounting for Internal Use Software SFFAS 15 -
Managements Discussion and Analysis SFFAS 17 -
Accounting for Social Insurance
http//www.financenet.gov/fasab.htm
Treasury http//www.treas.gov
Approves
OMB http//www.whitehouse.gov/omb
GAO http//www.gao.gov
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Taxonomy Development and ResourcesGovernment
Policy

• GAP
• OMB Form and Content
• USSGL Crosswalk to OMB FC
• USSGL
• TFM
• SFFAS/SFFAC

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Potential Financial Statement Submission Process
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Agenda

• XBRL US and Worldwide
• Making the Case for XBRL
• Government XBRL Applications
• Inside XBRL
• The Future of Digital Reporting

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How will XBRL impact content based businesses?

• Intermediaries value added does not change
• Completeness History and breadth
• Consistency Data linkage via unique identifiers
• Availability, Anonymity of access
• Customization, Convenience
• Intensifies competition over unique content
• Producer consumer behaviors change slowly

Intermediary
Consumer
Producer
Intermediary
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How will XBRL impact content based businesses?

• Less data preparation
• Less data re-keying
• More direct communication among processes
• More emphasis on analytics
• Dashboards
• Expansion of non-financial information content
• Rapid transformation of products
• Semantic analysis
• Information agents
• Reduced data tailoring costs and revenues
• Reduced application tailoring costs and revenues

Source Liv Watson, Edgar Online
68
Why XBRL instead of our own Schemas?

• Dont reinvent the features of XBRL
• Item types financial parameters
• Predefined concepts (labels, references)
• Entities, periods, segments, scenarios
• Extensibility using XLink

• Business Information
• that is
• Financial in nature
• Enhances standard definitions
• Refers to multiple entities
• Refers to multiple periods

9,000
EPS
Information Producer
Information Consumer
2.5m
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Information Producer
Information Consumer
Information Producer
Information Consumer
69
XBRL uses XLink to represent all relationships
between data elements
ltelement idast.invgt
70
XLink allows customization and explicit, modular
changes to reusable material
label
label
ltelement idast.invgt
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Example XBRL for Web Site Reporting
GAAP CI v2 Taxonomy
Element Schema and Definition Linkbase
Calculation and Other Linkbases
72
What is XLink and why is XBRL based on it?

• XLink is a W3C standard way to use XML to
  represent all kinds of relationships between XML
  elements no matter where they are.

Linkbase
XML Document 1
XML Document 2
b explains a
ltP idcgt
ltP idagt
ltP idbgt
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Agenda

• XBRL US and Worldwide
• Making the Case for XBRL
• Government XBRL Applications
• Inside XBRL
• The Future of Digital Reporting

74
Present And Near Future Uses of XBRL

• B2G - Regulatory Applications
• Australian Prudential Regulatory Authority (2001)
• US Federal Depository Institution Corp. (2003)
• UK Inland Revenue (2004)
• B2L Business to Lenders
• Bank of America / Moodys Credit Analysis
  (2003)
• Deutsche Bank same
• B2M Business to Markets
• Traditional financial reporting (2002)
• Business performance reporting (2003)
• Internal applications

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Second Annual XBRL Academic CompetitionAdministe
red by Bryant College

• CONGRATULATIONS TO THE FOLLOWING TEAMS
• Application Development (Undergraduate)
  Conversion of XBRL document into different
  formats. Universität Mannheim, Germany
• Application Development (Graduate) The
  Chung-Yuan Christian University of Taiwan and
  Indiana University, USA Credit Analyzer dynamic
  financial analysis software tool
• International and U.S. Taxonomy IAS to U.S. GAAP
  XBRL Taxonomy Conversion Emporia State
  University

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Neal J. Hannon, CMAChair, Education Work Group,
XBRL Internationalnhannon_at_cox.net Photo
Credit Dave Garbutt, FRS, South Africa
Questions?