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SEC Voluntary Filing Program & XBRL Implementation for Financial Reporting Efficiency

Learn about Microsoft's experience with the SEC Voluntary Filing Program and the implementation of XBRL for more efficient financial reporting. Discover the benefits, challenges, and the impact on business operations and risk management.

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SEC Voluntary Filing Program & XBRL Implementation for Financial Reporting Efficiency

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  1. SEC Voluntary Filing Program Taylor Hawes Controller – Global Platforms & Operations Microsoft Corporation

  2. SEC Voluntary Reporting Program on the EDGAR System • Effective date March 16, 2005 • Allows companies to “furnish” XBRL tagged financial statements • Added Rule 401 to Regulation S-T allowing filers to furnish supplemental information using XBRL • Allows for company flexibility in filing financial statements, with or without footnotes and MD&A • Can submit XBRL tagged document either with the official filing or as an amendment, however, there is no submission deadline • Must correlate to a standard GAAP Taxonomy • Relief for liability if error is not materially misleading or false

  3. SEC Voluntary Reporting Program on the EDGAR System • SEC would like to study: • Search capability of EDGAR database • Capability to perform financial comparisons amongst registrants • Ability to perform financial analysis (ratios, etc.) • Impact on staff’s ability to review filings more timely and efficiently • Use of tagged data for risk assessment • Compatibility of XBRL with other Commission requirements

  4. Financial Reporting Process

  5. Publish Instance Document & Taxonomy Create an instance document and validate calculations Review & Validate Instance Document Extend the taxonomy if necessary Assess Scope of Reporting & Download Taxonomy Compare & map 10K/10Q to GAAP Taxonomy Identify a team: Accountant & Developer (XML) Financial Reporting XBRL Project

  6. Microsoft Facts…. • Was one of the first companies to make XBRL tagged financials available on www.microsoft.com March 2002 • Was the first company to furnished complete 10Q March 2005 quarter (MD&A, Financial Statements and Footnotes) in anticipation of Voluntary Filing Program • Was the first company to furnish complete 10K FY2005 • 80+ Hours for first effort • Used 4 different programs to extend, tag and validate • Instance document totaled 92 pages • Over 8,000 tagged items • Over 20 Taxonomy extensions • Most significant challenge was footnote tables for “Segment Reporting” • Instance document was reviewed 3X by two different people • Did not request audit of tagged document

  7. Internal Value Proposition

  8. Data Data Enterprise Use of XBRL Business Performance Management Competitive Analysis Risk Management Auditor tools 404 Monitoring Business Operations Acquisition Integration General Ledger Consolidation Real-time Connection SEC Filings SEC Disclosure Checklist Dept of Commerce Banks Data Drill down External Reports Internal Reports

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