XBRL and Stock Exchanges: The benefits of IFRS webbased reporting

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XBRL and Stock Exchanges The benefits of IFRS
web-based reporting
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Presenters
Kurt Ramin IASC Foundation, Commercial
Director Chair of XBRL International kramin_at_iasb.o
rg.uk

• Josef Macdonald
• IASC Foundation, XBRL Practice Fellow
• Vice Chair of Domain Working Group, XBRL
  International
• jmacdonald_at_iasb.org.uk

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This Session

• Why IFRS?
• About this Study
• Benefits
• Observations
• Conclusions

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Who are we? The IASC Foundation
Trustees (19)
Trustees (19)
Trustees (19)
SAC (52)
Board (14)
Steering Committees Other Advisors
IFRIC (12)
Staff
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Why IFRS and Stock Exchanges?

• IFRS roll out Europe, Asia/Pacific, etc
• An XBRL thought leader
• Encourage SXs to consider XBRL and IFRS
• Transparency and Comparability

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IFRS concerned with

• Increase transparency
• Improve comparability
• Increase quality
• Facilitate maintenance
• Increase speed to produce financial statements

IASC Foundation XBRL Mission Statement The IASC
Foundation XBRL Working Group is committed to
developing, in the public interest, a
standardised set of high quality, understandable
and interoperable electronic global taxonomies
that facilitate the mediation of transparent and
comparable information in general purpose, web
based, financial statements. In addition, the
IASC Foundation XBRL Working Group cooperates
with XBRL International and other electronic
standard setters to achieve interoperability in
electronic standards around the world.
IASB Mission Statement The Board is committed to
developing, in the public interest, a single set
of high quality, understandable and enforceable
global accounting standards that require
transparent and comparable information in general
purpose financial statements. In addition, the
Board cooperates with national accounting
standard setters to achieve convergence in
accounting standards around the world.
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IFRS Around the World
 
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Global Standards

• "This underscores another significant step in our
  partnership with national standard setters to
  reach a truly global set of accounting standards.
  While we recognize that there are many challenges
  ahead, I am extremely confident now that we can
  eliminate major differences between national and
  international standards, and by drawing on the
  best of U.S. GAAP, IFRSs and other national
  standards, the worlds capital markets will have
  a set of global accounting standards that
  investors can trust.(emphasis added)
• Hailing the agreement reached between FASB and
  IASB, quote
• by Sir David Tweedie

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Global Support

• "Another good example of a specific XML schema is
  this XBRL, eXtensible Business Reporting
  LanguageThis one is pretty exciting in that
  companies that in the past would have posted
  financial data, say, as just a Web page you could
  go read, now we'll put it in a structured XML
  form"
• Great Plains Convergence, Remarks by Bill Gates

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Benefits of XBRL

• Better More Effective Use
• Improved quality and accuracy
• Improved operating efficiency and effectiveness
• Improved comparability
• Improved navigation
• Improved accessibility
• Faster More Quickly and More Often
• Decisions are acted upon more quickly
• Disclosures can be prepared and updated more
  quickly
• Efforts to comprehend and analyse data are
  reduced
• Cheaper Less Resources Required
• Less effort to prepare and use filings
• Software independent
• Data reuse no rekeying!

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What? FRTA, Taxonomies, etc
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This Session

• Why IFRS?
• About this Study
• Benefits
• Observations
• Conclusions

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Phased Study/Project

• Phase I
• Interview 5-10 exchanges
• Draft Synopses
• Phase II
• Whitepaper
• Case Studies
• FAQ

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(No Transcript)
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Phased Study/Project

• Phase III
• Review phase I
• Interview at least 5 more exchanges
• Re-interview first phase exchanges
• Consider adding SX Academic Study
• Finalise White paper, Case Studies and FAQ
• Phase IV
• Develop website
• Phase V
• Build demo/prototype

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Countries Approached
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Countries to be approached
? ? ?
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This Session

• Why IFRS?
• About this Study
• Benefits
• Observations
• Conclusions

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Stock Exchanges?

• Current State
• Too much data rekeying
• Emphasis on format paper based systems
• Risks from errors
• Collection, processing and distribution
  inefficient
• Benefits
• Seamless flow of data
• Filtered data
• Validation
• Create enhanced/new revenue opportunities
• SX saves time and resources

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Michael Sanderson, CEO, NASDAQ Europe

• 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

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Brokers/Analysts

• Current State
• Data collection and extraction process difficult
• Analysis difficulties
• Information available has been scaled back
• Benefits
• Access the information they want to see
• Easier access
• Automatically identify and then process data

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Alfred R. Berkeley III - Vice Chairman of NASDAQ

• "XBRL will promote the democratization of
  financial data -- making it equally available to
  everyone. Instead of people spending, say, 10
  hours to re-key data and one hour to analyze it,
  they can spend five minutes getting the data
  ready and spend one, two, three or more hours to
  analyze it, as they prefer, and get more and
  better analysis in less time than it took before."

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Investors

• Current State
• Data collection and extraction process difficult
• Analysis difficulties
• Information available has been scaled back
• Benefits
• Access the information they want to see
• Easier access
• Automatically identify and then process data

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John Connors, Chief Financial Officer, Microsoft

• "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."

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Other Regulators

• Current State
• Data collection process duplicated
• Little or no communication between regulators
• Onerous
• Benefits
• Decrease compliance burden
• Create once, use many times
• Efficient

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Other Regulators Multiple Uses
Accounting System(s)
Accounting System(s)
XBRL
Accounting System(s)
Other Sources of Information
XBRL
Other Sources of Information
Other Sources of Information
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Issuers

• Current State
• Data collection process difficult
• Form filling repetitive
• Information available has been scaled back
• Benefits
• Reuse data
• Faster
• Less onerous

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This Session

• Why IFRS?
• About this Study
• Benefits
• Observations
• Conclusions

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This Session

• Why IFRS?
• About this Study
• Benefits
• Observations
• Conclusions

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10 Best Practice Tips!

• 10. Assess your readiness
• 9. Ignore Kool-aide drinkers prognosticators
• 8. Assess XBRLs maturity
• 7. Think carefully about maintenance

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How Long?
Milestones
STANDARD SETTING STAGES
ANTICIPATED LEVEL OF ADOPTION
Wide Usage Significant Market Benefits Validated
Global Recognition
2009 ?
High It is a Standard

• XBRL Use Grows
• Geographically
• By Industries
• Types of BR

• Maturity of Core Components
• Taxonomies
• Software Tools
• Impl. Guidance

Medium - Best Practice
Market Acceptance
2005 2008?
Low Industry Leaders Pockets
User and Preparer Implementation Guidance is
Developed
Technology Standard and Base Taxonomies are
Developed
New Existing Software is XBRL Enabled
Very Low Innovators
Base Development
2001 2005
Denotes estimated status of meeting the milestone
Significant Market Need Demand
Participation of Key Stakeholders
Organizational Development Structure
International Participation and Focus
Conceptualisation
1999 2001
Source Ernst Young
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10 Best Practice Tips!

• 10. Assess your readiness
• 9. Ignore Kool-aide drinkers prognosticators
• 8. Assess XBRLs maturity
• 7. Think carefully about maintenance
• 6. Participate in XBRL.org
• 5. Worry about security
• 4. Worry about security some more
• 3. Review your filing forms first
• 2. Build a prototype
• 1. Get buy-in from issuers

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Presenters
Kurt Ramin IASC Foundation, Commercial
Director Chair of XBRL International kramin_at_iasb.o
rg.uk

• Josef Macdonald
• IASC Foundation, XBRL Practice Fellow
• Vice Chair of Domain Working Group, XBRL
  International
• jmacdonald_at_iasb.org.uk