XBRL (eXtensible Business Reporting Language) - Is It In Your Future?

1. XBRL (eXtensible Business Reporting Language) - Is It In Your Future? Lance LaCross, CPA Senior Solutions Consultant March 21, 2011 2011 Spring MWUG Session

2. 2011 Spring MWUG Session Agenda • XBRL - eXtensible Business Reporting Language • What is it? • Basic Concepts / Terminology • Process Flow • Examples • History • Where Did It Come From? • Why Use It? • Compliance • Benefits • Today • Options • Future • QAD

3. Content—Without Context • Searching for the word “Mercury” on the Web can provide a wide variety of results—too many—such as: Hg

4. Auto Industry • <CAR-MODEL> • Chemical Industry • <SYMBOL> • Publishing or Mythology • <GOD> • <RECORD-LABEL> • Music Industry • Aerospace Industry • <PROGRAM> • Astronomy • <PLANET> “Content in Context” (Industry-specific)

5. XBRL – Simple Explanation Instead of treating financial information as a block of text - as in a standard internet page or a printed document - it provides an identifying tag for each individual item of data.  This allows for the introduction of XBRL tags enables automated processing of business information by computer software, cutting out laborious and costly processes of manual re-entry and comparison.  Computers can treat XBRL data "intelligently": they can recognize the information in a XBRL document, select it, analyze it, store it, exchange it with other computers and present it automatically in a variety of ways for users.  XBRL can save costs and streamline processes for collecting and reporting financial information.  Consumers of financial data, including investors, analysts, financial institutions and regulators, can receive, find, compare and analyze data much more rapidly and efficiently if it is in XBRL format. XBRL can handle data in different languages and accounting standards.  It can flexibly be adapted to meet different requirements and uses.  Data can be transformed into XBRL by suitable mapping tools or it can be generated in XBRL by appropriate software.

6. What Barcode has done for Inventory Control Efficiency Savings Quality

7. Is What XBRL Is Doing For Business Reporting

8. What is XBRL? • XBRL (eXtensible Business Reporting Language) is an open standard which supports information modeling and the expression of semantic meaning commonly required in business reporting. (www.xbrl.org) • The computer language for the electronic communication of internal and external business report information. It is becoming a standard for storing, communicating and reusing business and financial information • International supply chain standardization effort backed by over 800+ organizations and 12,000 categories being adopted by regulators/companies across the world • Cross-platform, technology-agnostic, Internet-friendly global standard based on XML…eXtensible Markup Language

9. What is XBRL? Cont… • Replaces manual process steps with automation • Applicable all types of business information: Financial facts, non-financial, rules, formulas, controls, processes, resources and a set of taxonomies defining dependencies of such facts • XBRL is XML (Extensible Markup Language) based and is represented as a tree like structure • XBRL has a set of standard validation rules containing formulas for validating values stored in an XBRL format • Open standard – free of license • Developed by the XBRL Consortium

10. Who is the XBRL Consortium ? • XBRL International www.xbrl.org is a not-for-profit consortium of approximately 650 companies and agencies worldwide working together to build the XBRL language and promote and support its adoption. • The consortium members meet periodically in international conferences, conduct committee work regularly via conference calls, and communicate in email and phone calls throughout the week. • This collaborative effort began in 1998 and has produced a variety of specifications and taxonomies to support the goal of providing a standard, XML-based language for digitizing business reports in accordance with the  rules of accounting in each country and/or with other reporting regimes such as banking regulation or performance benchmarking.

11. XBRL Terms? Calculation DTS Definition Taxonomy Extension Element Taxonomy Attributes Footnote Instance Document Linkbase Label Presentation Schema Reference

12. How XBRL Works

13. XBRL Logical Model

14. XBRL Terms • Taxonomy = Electronic dictionary of business reporting elements used to report business data. They define the specific tags that are used for individual items of data (such as "net profit"), their attributes and their interrelationships. Different taxonomies will be required for different business reporting purposes. Some national jurisdictions may need their own reporting taxonomies to reflect local accounting and other reporting regulations (US GAAP, IFRS, etc.) • Many different organizations, including regulators, specific industries or even companies, may require taxonomies or taxonomy extensions to cover their own specific business reporting needs (SEC, FDIC, etc.) • It is composed of an element names file (.xsd) and relationships files directly referenced by that schema. The taxonomy schema files together with the relationships files define the concepts (elements) and relationships that form the basis of the taxonomy. The set of related schemas and relationships files altogether constitute a taxonomy.

15. XBRL Terms • An XBRL taxonomy can contain the following attributes: • Schema: A group of structured elements that may be used in instance documents. We will call this the dictionary of defined terms. • Label: Labels or text associated with the elements in the dictionary may be created in different languages and used for different purposes when composing different instance documents. • Reference: References to legal texts or accounting standards on which the concept is based. These references play an important role when determining the use of concepts during the creation of instance documents. • Formula: Formula rules associated with the elements in the dictionary. • Presentation: Rules to specify the formatting of a report . • Calculation: Rules for calculations (additions and subtractions) between elements in the taxonomy that are used to validate instance documents. • Definition: Additional rules to document relationships between elements in the taxonomy and that are used to validate the instances. Note a Concept = XBRL technical term for Element

16. XBRL Terms cont… • Instance/ Instance document = 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. • Value / Facts • Context • Concepts • Dictionaries (Taxonomy)

17. Taxonomy Attributes/Links

18. XBRL Instance

19. Reporting Concepts - GOODWILL

20. Reporting Concepts – GOODWILL cont…

21. Reporting Concepts – GOODWILL cont…

22. FASB Taxonomy GAAP Update

23. IFRS Taxonomy Update

24. SEC XBRL Website

25. SEC XBRL Website Standard Taxonomy Example

26. SEC XBRL Website Standard Taxonomy Example

27. Sample of XBRL

28. Sample of XBRL - Readable

29. History of XBRL • In the beginning – there was financial reporting…

30. History of XBRL cont… • 1998 • Charles Hoffman, a CPA (Knight, Vale, and Gregory)and investigates how XML could be used for electronic reporting of financial information. • The High Tech Task Force reports results to the AICPA Committee on Committee Organization. The AICPA decides to fund a project to create a prototype set of financial statements in XML. • 1999 • The AICPA Board of Directors agree to fund the XBRL effort.  Twelve companies quickly join the effort (along with the AICPA) as members of the XBRL Steering Committee • The first meeting of the XBRL Steering Committee takes place in the offices of the AICPA in New York City.   • 2000 • XBRL releases the first XBRL specification for financial statements for commercial and industrial companies in the United States. The committee announces the formation of an international organization to position for rapid global expansion and adoption. • Bill Gates declares XML to be the next revolution on the Internet and announces the .net strategy, which includes XML tools in upcoming Microsoft products.  •  The Chairman of the SEC, acknowledges XBRL and recommends its further development at the Fall AICPA Council in Las Vegas. 

31. History of XBRL cont… • 2001 • XBRL holds its first international meeting in London. Representatives from 10 countries attend the first meeting. XBRL announces that the International Accounting Standards Board has released a draft of an IAS taxonomy for review. • XBRL Australia, XBRL Canada, XBRL Germany, XBRL IASB, XBRL Japan, XBRL-Netherlands, and XBRL-UK form the first jurisdictions to support the development of XBRL • XBRL finalizes the Enhanced XML Schema-Based Specification for Global Business Reporting • 2002 • The Australian Prudential Regulatory Agency (APRA), one of the world’s largest regulatory agencies, announces that XBRL is being used to overhaul data collection from 11,000 super funds, insurers and banks required to report to it on a regular basis. • Microsoft becomes the first technology company to report financials in XBRL • 6th XBRL International Conference in Tokyo, Japan – announcement by Japanese Tax Agency and Tokyo Stock Exchange of plans to adopt XBRL, a focused effort by the Domain Working Group to define key issues requiring resolution in order to simplify implementation of XBRL, and the formation of the Credit Risk Assessment Services Working Group. • The Japanese National Tax Agency (Zeimusho) announced they would begin accepting XBRL formatted electronic tax filings in 2003.

32. History of XBRL cont… • 2003 • The US Federal Deposit Insurance Corporation (FDIC) is completing a set of draft taxonomies that will be used as part of a major contract to be awarded this June to process quarterly Call Reports from over 8,400 US banks.   • The UK Inland Revenue is pressing ahead with its plans for filing of Corporation Tax using XBRL. • The Dutch Tax Authority, Central Bank and Bureau of Statistics outlined their interests and commitments on XBRL. • The Danish Commerce and Companies Agency unveiled its XBRL-enabled online companies registry. • 2004 • TSX Group Inc. (TSX Group) becomes the first Canadian public company, as well as the first publicly-listed stock exchange globally, to publish its annual financial results in XBRL.  • The U. S. Securities and Exchange Commission (SEC) announces program to assess the benefits of data tagged with XBRL (Extensible Business Reporting Language). XBRL-US says it is confident that the program will demonstrate that adoption of XBRL will bring broad benefits.

33. History of XBRL cont… • 2005 • The U.S. SEC adopts rules establishing a voluntary program for reporting of financial information on EDGAR using XBRL. • London Conference discusses requirements, promises and challenges of deployment of XBRL for regulatory reporting by the banking industry in Europe • Spanish Stock Exchange begins use of XBRL • XBRL in use in China • Present • Annual International XBRL Conference • Financial Executives International (FEI), an association for chief financial officers and other senior finance executives, has placed XBRL near the top of its list of financial reporting challenges for 2007, saying the standard would gain momentum with increasing voluntary adoption during the year • Continued Worldwide Adoption of XBRL • UK government proposed to make the use of XBRL mandatory for company tax filings from March 2010 • BRL reporting is already required in The Netherlands • Mandatory use of XBRL filing was already announced by the National Bank of Belgium in 2008 • Bulgaria, Italy, Finland, France, Greece, Hungary, Lithuania, Luxembourg, Poland and Spain have already announced that XBRL is to be made mandatory this or next year • Continued Refinement of Technical Specifications (2.1) & Taxonomy

34. SEC Schedule of Adoption 2009 - Large Accelerated Filers(~500 companies) • Greater than $5B public equity float • Detail tagging of financials • Block tagging of notes/schedules 2010 - All other Large Accelerated Filer(~1,200 companies) • Detail tagging of financials • Block tagging of notes • •Large Accelerated Filers • Detail tag statements and notes/schedules

35. SEC Schedule of Adoption 2011 - All remaining Filers(~7,200 companies) • •Statements in detail • •Notes/Schedules in block tagging All other Large Accelerated Filers and Large Accelerated Filers • •Detail tag statements and notes/schedules 2012 All companies(~8900 companies) • •Detail tag statements and notes/schedules

36. Why Use It? - Benefits & Compliance

37. Why Use It? • Compliance • Industry Regulation • Governmental Agencies • Regulators • Lenders • Others consumers of financial information

38. XBRL Global Regulatory Adoption • KOSDAQ – Korea • National Tax Agency of Japan • New Zealand Exchange • Patent and Registration Office (PRV – Sweden) • U.S. Securities & Exchange Commission • Shanghai Stock Exchange • Shenzhen Exchange • Tokyo Stock Exchange • UK Financial Services Authority • UK Inland Revenue • US Federal Financial Institutions Examination Council (includes FDIC) • More … • Australian Tax Office • Banco de España • Bank of Japan • Bundesbank • Committee of European Banking Supervisors (CEBS) • Chinese Securities Regulation Commission (CSRC) {sponsoring Shenzen and Shanghai exchanges} • Danish Commerce & Companies Agency • Dutch Tax Authority • Dutch Water Authority • Eurostat • EU Commission – XBRL in Europe • Financial Service Agency of Japan • The Irish Revenue • Spanish Stock Exchange Commission

39. Why Use It? • Benefits – 2 Key Areas • Data Collection and Reporting • Data Consumption and Analysis

40. Benefits • XBRL offers major benefits at all stages of business reporting and analysis.  The benefits are seen in automation, cost saving, faster, more reliable and more accurate handling of data, improved analysis and in better quality of information and decision-making.  • XBRL enables producers and consumers of financial data to switch resources away from costly manual processes, typically involving time-consuming comparison, assembly and re-entry of data.  They are able to concentrate effort on analysis, aided by software which can validate and manipulate XBRL information.  • Those who stand to benefit include all who collect business data, including: governments, regulators, economic agencies, stock exchanges, financial information companies and the like, and those who produce or use it, including accountants, auditors, company managers, financial analysts, investors and creditors.  • Among those who can take advantage of XBRL include accountancy software vendors, the financial services industry, investor relations companies and the information technology industry.

41. Options: • Audience Question ? • Current Requirements • Current Process? • Current XBRL Product?

42. Options: • Manual Input xlink:label="ifrs_AssetsTotal_lbl"  xml:lang="en">Property, Plant and Equipment, Net</label><label xlink:type="resource"  xlink:role="http://www.xbrl.org/2010/role/periodStartLabel" • Tools • www.xbrl.org/tools • Products & Services • www.xbrl.org/productsandservices

43. QAD Direction Roadmap:

44. Summary XBRL Is Transforming Business Reporting It Is The Global XML Standard For Business And Financial Reporting XBRL Is Here

45. Questions / Answers

46. May 9-12 in San Antonio, Texas QAD Explore 2011 Customer Conference Learn More:www.qad.com/explore

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