Tax Data Collection and Other Nightmares XBRL GL, the Journal Taxonomy, Today Internal Reporting Track, November 5, th XBRL International Conference, Seattle, Washington, USA Eric E. Cohen,

TaxpayerAccountantAgent Audit Following up with IRS Results Audit Process Today

I want to be able to access the underlying detail to prove what you have reported! I don’t want you to have that access – but I want to be able to get that information myself! My life would be easier if the client’s detail automatically populated my write- up software.

Individual Income Sales Total Taxes Property Employment All Others Corporate Income Agencies Focus in on Tax Filing

But … Is Everything on the Level?

Regulator Regulations News Instructions Filing formats Reference Service CLIENT filing format RegulatorServiceExtranet3 rd PartiesRegulator Software developers Organizer Guidance Checklists Practitioner Aids Trading Partners Other Regulators The Market Lenders Integrated Non-integrated Outsources ASP Congress Treasury Tax Policy Analysts

Holistic = Win-win-win?  Format useful to tasks other than tax audit  Consolidation (drill down from tax audit)  Movement to internal/external auditors  Movement to budget/forecast  Standard format for ASP marketplace  Dealing with Taxes  Direct  Indirect

Data Transfer File Needs to Serve  ONE TOOL  Consolidation tool across systems  Feeder for management systems  Tool for internal and external auditors  Audit  Tax  Electronic Audit Trail from source to final  Paper source  Electronic source  SIMPLE ENOUGH FOR ALL

Shared Needs for Direct and Indirect Taxes People AccountsDocumentsResources EntriesXBRL Depreciation Tax specific entries Tax specific accounts

Standards: Benefits to Firms Small and Large  Smaller firms  Internal integration – transparent, simple  Integration with CPA tax systems  Large company  Preparation  Consolidation  Audit trail  Filing  Format  Transport  Integration with financial statement preparation  Tax Note  Research, cross organization analysis of effects of changes

To Meet The Need: XBRL GL  XBRL GL, the Journal taxonomy  Integrates accounting systems  Provides detail later summarized in  Financial reporting  Tax  Performance  Represents almost anything categorized to "accounts“  Customer and vendor master file information  Detail journals  Information represented in US, Japanese or European general ledger packages

Why is XBRL GL Needed? Different Data Dictionaries: Field names, field order System 1: AccountNo, Amount, Date System 2: MonetaryAmount, PostDate, AccountNumber System 3: PostingDate, Account#, Value System 4: Date, Journal, Account, Amount Similar Data Account, Amount, Date Different Representations for the same concepts in common data field Journal: PJ, Payroll Journal, Payroll Date: , , 12/31/03 Different Data Formats CSV ASCII WKS

XBRL GL Spans the GAP Different Data Dictionaries: Field names, field order System 1: AccountNo, Amount, Date System 2: MonetaryAmount, PostDate, AccountNumber System 3: PostingDate, Account#, Value System 4: Date, Journal, Account, Amount Similar Data Account, Amount, Date Different Representations for the same concepts in common data field Journal: PJ, Payroll Journal, Payroll Date: , , 12/31/03 Different Data Formats CSV ASCII WKS XBRL GL provides platform for agreed- upon and well defined list of concepts – make sure my “Account” and your “Account” means the same thing (not bank account or customer account but GL account.) Based on XML, XBRL GL is order independent; sharing element names for import/export means that AccountNo, AccountNumberm Account# and Account will all be express as one common name; applications will know what to expect inpublishing and consuming data files. So many external data formats; XML provides a popular and increasing supported / demanded data format. Once you have agreed on data field standardization, software applications require agreement on content in many cases. XBRL GL provides enumerated values to supplement XML data standards to help in this area.

Proprietary Formats: XML Alone qbxml smbxml Intacct xml SAP Peoplesoft xml qbxml smbxml Intacct xml SAP Peoplesoft xml Oracle

Standards-based Data Interchange XBRL GL qbxml smbxml Intacct xml SAP Peoplesoft xml qbxml smbxml Intacct xml SAP Peoplesoft xml Oracle Industry transactional XML

XBRL GL Can Represent  The chart of accounts, representing both posting accounts and customers, vendors, or other items that may be assigned an account in an international sense of the word;  Journal entries, both from subsystems and within the General Ledger or financial reporter;  Document summaries, with generic representations of the information that is presented on standardized business documents;  Descriptions of customers, vendors, employees and banks, either in connection with the chart of accounts (European style) or independently (US style);  Descriptions of inventory items, performance metrics or other quantifiable items;  Status documents, including listings of receivables still owing, payables yet owed, inventory in stock, as well as  Standard accounting summaries such as trial balances, “general ledger”, source journals and other accounting-oriented summaries.

XBRL GL Fills the GAPS between GAAPS BUSINESS Investors Aggregators RegulatorsCreditorsLendersTaxWebsite Transaction Creation ERP G/L Packages CRM Orders A/P Delivery Customers Orders A/R Delivery 2-way Suppliers One way One way XBRL BUSINESS REPORTING (e-)Business X12, EDIFACT, XML INITIATIVES XBRL GL Journal Taxonomy Detail Accounting recognition/ classification Intra system Detail to summary

From Bar Coded Transactions through …  Transactions (eCommerce)  Accounting entries and adjustments  Estimates, allocations, eliminations  Management, accountant entries

I N V O I C E May 2, 2003 Invoice #: ItemDescriptionQtyExtension 1078Blue Widget2002, Cyan Widget1001, Sub-total:47, Freight: Total:47, invoice

Uses Of XBRL GL Accounting System Budget Accounting System A Accounting System B Chart of Accounts Customers, Vendors, Employees Open AR, AP, Inventory Status Journal Entries, Ledger History Accounting System CPA Trial Balance Adjustments One Vocabulary One Framework

Concluding  One format  From initial entry through the information supply chain  Facilitating audit  Reducing compliance burden  With international agreement and usage  Facilitating a universal audit trail  Facilitating write all, black box, audit trail report  Providing integration for management and beyond

After the Audit

Questions?  Eric E. Cohen  PricewaterhouseCoopers   (585)  Find out more   Eric E. Cohen