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Managers’ briefing: Why XBRL?
Steven Baker DecisionSoft Ltd
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Intro DecisionSoft Ltd: Subject: Agenda:
A background in XML data modelling and processing, A leading role in creating the XBRL Specification, Five years’ experience implementing online XML and XBRL processing systems, particularly for government Subject: The “how” of electronic business reporting Agenda: General problems XML vs XBRL Architecture Benefits Selecting XBRL General ledger Status
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General problems Existing manual processes are:
Slow Inaccurate Expensive Hard to integrate Electronic business reporting facilitates: Improved processes Improved confidence Accelerated decision making Lower costs XBRL is the standard for electronic business reports
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XML vs XBRL XML – eXtensible Markup Language
A set of rules for how any data can be expressed as text; it is a syntax. A foundation for particular applications Immensely flexible XBRL – eXtensible Business Reporting Language An application of XML One design for business reports in XML
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An example XBRL report
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The components of XBRL The report (or instance) The taxonomy
The business data we care about For every item of data, provides Context Units Precision The taxonomy Defines the business data that may be reported Provides: Allowable data items Labels for those items Relevant references Relationships: How items are calculated from one another How items might be presented Equivalence and other miscellaneous relationships Can be extended
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XBRL architecture Business Information XBRL Taxonomies
Catalogued in Business Information Accounts, Tax, Expenditures, Income, Facts XBRL Report XBRL Reports Defines legal items Details reported in XBRL Int’l Defines format Define s format XPath, XSL and XPointer will be discussed in detail in a later session. This section is a brief introduction to XPath as it is used in the Inland Revenue schemas. Pattern matching - the ability of XPath to check that the nodes in an XML document match a specific pattern.
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Technology stack Report Taxonomy XML Schema Namespaces XML
Individual reports Specific reporting items Framework for Taxonomy and Report Distinguish domains (IR, Int’l, internal) XPath, XSL and XPointer will be discussed in detail in a later session. This section is a brief introduction to XPath as it is used in the Inland Revenue schemas. Pattern matching - the ability of XPath to check that the nodes in an XML document match a specific pattern. Base syntax
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A typical XBRL-based system
Analysts Validate XBRL report Store Corporations, Agents, Individuals XBRL reports Re-publish Regulators Investors
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XBRL actors Who creates instances? Who creates taxonomies?
An entity with business facts to report Corporations, departments, subsidiaries Who creates taxonomies? Authorities such as regulators or other authoritative bodies. For example: IASC Foundation: IFRS taxonomy Institute of Chartered Accountants in England and Wales: UK GAAP taxonomy UK HMRC: corporation tax taxonomy Companies for internal reporting What moves where when? Taxonomies retrieved by software developers and tools Reports submitted by producers as required
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Taxonomies and validation
Reports should be validated which proves: Only known items have been reported Known items are those declared, with one or more labels and possibly references The figures add up Other constraints have been met Equivalent items have the same value All required items are present (others) Valid reports can be processed with increased confidence
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Demonstration
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Benefits of XBRL Assurance Interoperability Flexibility
Esp. for regulators and investment banks Manual errors eliminated Internal consistency checked by validation Security through digital signatures Interoperability An open standard using an open format Flexibility Analysis of data Output to Web, PDF, spreadsheet, word processor.
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Why to select XBRL Realise the benefits of electronic reporting
Speed, accuracy, efficiency and assurance Adopt the world-wide standard IFRS and GAAP use XBRL Converge on one design for electronic reporting Use standard tools No vendor lock-in XBRL is open
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XBRL-GL The XBRL standard for General Ledger
Intended to bring together internal business data: Chart of accounts Journal entries Historical transactions Does not require a standard chart of accounts, but can be used to link to one Further opportunities for convergence
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Where is XBRL now? Version 2.1 published 31 Dec 2003 XBRL is stable
No version 3 or even version 2.2 is planned. XBRL is in use Edgar Online Microsoft Reuters TSX Group UK HMCR and others Also: Support from about 250 leading companies including Microsoft, Oracle, SAP, Peoplesoft, KPMG, PWC, Ernst and Young, Deloitte and other major firms
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Conclusion Extensive business benefits are available from adopting the world-wide standard for electronic business reporting XBRL provides a standard design of XML document for business reporting Also general ledger XBRL enjoys extensive support and is open
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