Advanced Accounting Information Systems Day 29 Introduction to XBRL November 2, 2009

Announcements First XBRL assignment due 11/4 Graduate student paper topics Midterm progress Dr. Kurtenbach’s report

Objectives Obtain an overview understanding of XBRL and its role in computerized financial and business operations reporting Understand key terms such as taxonomy, instance document, markup, and meta-data Understand key aspects of SEC filing program Understand the XML document foundation Describe differences between XML and UBL

Question for today What is the purpose of UBL? How does UBL differ from XBRL?

Question for today What is the document exchange process in a simple procurement process?

Difference between HTML and XML Tags provide presentation information XML Extensible – adding meaning to data and storing and processing it as information As long as you follow the rules, you can extend or add to tags Markup Surrounding pieces of data with tags that add meaning

INTRODUCTION FINANCIAL REPORTING SYSTEM Web(HTML) XBRL(XML) Paper based financial statements reporting HTML based financial statements reporting XBRL based financial statements reporting Provide a standard method for preparing, analyzing, and exchanging financial information. Limited accessibility Not allow data exchange, intelligent search, and adaptive presentation Off Line LAN, Intranet, Internet

INTRODUCTION FINANCIAL REPORTING SYSTEM Paper Based HTML XBRL Presentation Content Actual Cash: 50000 Debt: 10000 Cash: 50000 Debt: 10000 Cash: 50000 Debt: 10000 <B> Cash: 50000 </B> <I> Debt: 10000 </I> Cash { font-weight: bold } Debt { font-style: italic } <Cash> 50000 </Cash> <Debt> 10000 </Debt> 8

XBRL BASICS Instance document Taxonomy XML file that contains business reporting information and represents a collection of financial facts and report-specific information using tags from one or more XBRL taxonomies Element A financial reporting concept, defined in XBRL Context Entity and report-specific information (reporting period, segment information, and so forth) required by XBRL that allows tagged data to be understood in relation to other information Taxonomy Electronic dictionary of business reporting elements used to report business information Standard taxonomy Developed for U.S. companies by XBRL.US Taxonomy extensions Created by individual companies

Definition, Content, and Presentation XBRL BASICS Facts Definition, Content, and Presentation Reporting Cash and Cash Equivalents $35,000 XBRL Taxonomy <element name="CashCashEquivalents" id="cust_CashCashEquivalents" type="xbrli:monetaryItemType" substitutionGroup="xbrli:item" nillable="true" xbrli:balance="debit" xbrli:periodType="instant"/> <cust:CashCashEquivalents decimals="0" contextRef="End2004" unitRef=“USD"> 35000 </cust:CashCashEquivalents> XBRL Instance Dictionary Human readable format <xsl:for-each select="//cust:CashCashEquivalents"> <xsl:if test="@contextRef[.='End2004']"> <xsl:value-of select="format-number(current(), '###,###')"/> </xsl:if> </xsl:for-each> XSLT Style Sheet Data (Content) Machine readable format Rendering (Presentation) 10

WHAT DOES XBRL LOOK LIKE? With XBRL, each item of a company’s reported information is tagged with a unique code identifier. HTML or PDF Format XBRL Format

HOW XBRL WORKS 12

MANDATE BASICS SEC rule proposal May 30, 2008 Adopted by SEC on December 17, 2008 Basics of the rule: Required primary financial statements (PFS) and footnotes for all issuers using US GAAP/IFRS for periods ending June 15, 2009 or later Year 1 – all large accelerated filers (worldwide equity float above $5 billion) Year 2 – all other accelerated filers Year 3 – all others First year PFS plus block tag footnotes 2nd year include detailed tag footnotes 30 day grace period for first filing of PFS and detailed footnotes

XBRL Emerging technology under the auspices of XBRL International Used to tag each piece of financial and business operations information in a standard way so that it can be validated, stored, and processed by computerized applications XBRL specifications Standard taxonomies Instance documents Metadata Adds meaning to data

Why is XBRL Important?

Brief History of XBRL

EVOLUTION OF XBRL: A HISTORICAL PERSPECTIVE 17 July 2000 First specification of the XBRL Taxonomy for Financial Statements for the commercial and industrial U.S. companies. April 2002 International Accounting Standards Board (IASB) released a core taxonomy of XBRL for Financial Statements (IASC 2001). April 2004 Revised XBRL Specification 2.1 was released by International Steering Committee of XBRL International. 1997 Charlie Hoffman introduces the potential use of XML for financial reporting. May 30, 2008 XBRL proposed mandating companies furnish statements in XBRL format. October 1999 First meeting of the XFRML Steering Committee. January 2006 SEC announces expedited reviews for XBRL filers. 01/1997 12/1997 12/1998 12/1999 12/2000 12/2001 12/2002 12/2003 12/2004 12/2005 12/2006 12/2007 12/2008 August 1999 12 companies, (besides the AICPA), including ‘Big 5’ joined the project as members of the XFRML Steering Committee. April 2000 XFRML Steering Committee was officially changed to XBRL Steering Committee. November 2001 The second specification of the XBRL was released for public comment (see at http://www.xbrl.org for details). December 2003 XBRL Specification 2.1 was approved and released by International Steering Committee of XBRL International. April 2005 SEC XBRL Voluntary Financial Reporting Program (VFRP) September 2007 XBRL US project team completes tagging of US GAAP (XBRL US GAAP Taxonomies 1.0). December 17, 2008 SEC adopts XBRL mandate. 17

Glossary of New Terms – Chapter 1 EDGAR FDIC FFIEC Instance documents Meta-data XBRL XBRL Specifications 2.1 XBRL taxonomies XML

XML Document Foundation XML vocabularies discussed in class Universal Business Language (UBL) XBRL Design goals of XML Usable over the Internet Support a variety of applications Be human-readable XML documents Contain tagged items of data and conform to specific rules and syntax that make them processable by all XML-enabled software applications Well-formed XML documents contain tags and data items in a nested hierarchy Element Tag set and its contents Matching beginning and ending tag name along with its content Root element Parent of the entire XML document

Rules for Well-formed XML Documents An XML document can have one and only one root element. All elements must have matching beginning and ending names, and XML is case sensitive Elements can contain attributes that add information about a specific element and appear following the beginning element name All elements must be properly nested

Purpose of Basic Rules for XML Documents Provide foundation for the creation of humanly-understandable tags (element names) to ‘markup’ data items with descriptive metadata (data about data) Provide structure that enforces a strict hierarchy that results in very efficient computer processing

UBL Catalogue Open-source software standards for e-business and Web services Created by OASIS Provides complete XML-based library of business documents to be used in e-business transactions Reusable data components Like all XML vocabularies, UBL has its own rules and guiding principles Prolog All XML documents start with a prolog Processing instructions to be used by an XML processor and additional information such as documentation and structure information

Rules for UBL documents Each has unique root element chosen to correspond to document’s purpose Each has required ID element to uniquely identify document and IssueDate element to fix it in time Each has two party elements appropriately named for purpose of document to identify provider/supplier and customer/buyer parties to document Each has at least one line element appropriately named for purpose of document. Each line element is required to have ID element and appropriate item information

Practice What are the child elements of the PostalAddress element shown in Figure 2.2?

XML Attributes All XML elements can have one or more attributes Contained within the beginning element name brackets (<>) and further explain the meaning of an individual element Have their own name and a value in the following format: AttributeName = “attribute Value”

Practice How would you interpret the data in the <Price> element within the second <CatalogueLine> element?

XML and UBL in Business

Glossary of New Terms Attributes Electronic data interchange Element OASIS Open-source software standards Prolog Reusable data component Root element UBL vocabulary Valid XML documents Well-formed XML documents XML web services

Questions for Wednesday What is the purpose of the XML schema language? Distinguish between Namespaces and XLink?