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Frequently Asked Questions. Who is using XBRL for what? What is most urgent for XBRL International? How will XBRL impact content based businesses? Why XBRL instead of our own XML Schemas? What XBRL tools and products are available? What is XLink and why is XBRL based on it?

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Frequently asked questions
Frequently Asked Questions

  • Who is using XBRL for what?

  • What is most urgent for XBRL International?

  • How will XBRL impact content based businesses?

  • Why XBRL instead of our own XML Schemas?

  • What XBRL tools and products are available?

  • What is XLink and why is XBRL based on it?

  • When will XBRL become widely used?

  • Who is behind XBRL… and why?

  • Is XBRL like FpML (RIXML, MDDL, SomeotherML)

  • Where can I get a copy of these slides?


Frequently asked question who is using xbrl for what
Frequently Asked Question:Who is using XBRL for what?

  • B2G - Regulatory Applications

    • Australian Prudential Regulatory Authority (2001)

    • US Federal Depository Institution Corp. (2002)

    • UK Inland Revenue (2003)

  • B2L – Business to Lenders

    • Bank of America / Moody’s – Credit Analysis (2003)

    • Deutsche Bank – same

  • B2M – Business to Markets

    • Traditional financial reporting (2002)

    • Business performance reporting (2003)

  • Internal applications


Frequently asked question what is most urgent for xbrl international
Frequently Asked Question:What is most urgent for XBRL International?

  • Taxonomies

    • Wide coverage

    • Consistent practices

    • Reusability

  • Specifications

    • Enhanced validation

    • Richer representations

    • Move to interoperability

  • Implementations

    • Profiles


Taxonomy as dictionary
Taxonomy as Dictionary

Disclosure

Income

Expense

Result

inc

exp

inx

Advertising

Marketing

Profit

Net Interest

exp.adv

exp.mkt

inx.prf

inx.int


Taxonomy as classification
Taxonomy as Classification

Disclosure

Defined as

Income

Expense

Result

Defined as

Defined as

Advertising

Marketing

Profit

Net Interest


Taxonomy as calculation
Taxonomy as Calculation

Disclosure

Added into

Income

Expense

Result

Subtracted from

Added into

Added into

Advertising

Marketing

Profit

Net Interest

Added into


Taxonomy as reusable building block
Taxonomy as Reusable Building Block

Disclosure

Added into

Income

Result

Expense

Subtracted from

Added into

Added into

Advertising

Marketing

Profit

Net Interest

Rebates

Added into

Website Expenses


Example xbrl for web site reporting

Insider trades

Company Site Custom Taxonomy

US Site Taxonomy

Element Schema and

Definition Linkbase

imports

Significant events

Element Schema and

Definition Linkbase

Calculation and

Other Linkbases

Calculation and

Other Linkbases

Restrictions on redefining links

imports

Example: XBRL for Web Site Reporting

GAAP C&I v2 Taxonomy

Element Schema and

Definition Linkbase

Calculation and

Other Linkbases


Taxonomy as collaborative effort
Taxonomy as Collaborative Effort

  • Agree naming

  • Agree structure

  • Agree schedule

Disclosure

Income

Expense

Result

Advertising

Marketing

Profit

Net Interest


Xbrl taxonomies in 2002
XBRL Taxonomies in 2002

  • Best practices

    • e.g. ast.amz.goodwill = Amortization of Goodwill

    • e.g. Assets have “current” & “non current” children

    • e.g. Reusable common components taxonomy

  • Focused development efforts

    • IAS Taxonomy: Core financials, Core + Notes

    • US GAAP C&I Taxonomy

    • UK GAAP C&I Taxonomy

    • Inland Revenue “Computation” Taxonomy

    • FDIC Taxonomy (US)

    • Canadian GAAP, others.


Validation
Validation

  • The financial information integration problem

    • Any (XBRL) application involving data transfer across enterprises must validate incoming data one way or another.

    • Consumer can validate after the fact, return errors (bad)

    • Producer can validate before submitting (good)

  • Common solutions and their consequences

    • Custom code, database constraints

    • XML Schema validation

  • Computation linkbases

    • Like XML Schema – used in many programming environments

    • Native to XBRL and works well for financial computations

    • Do this the way other standards bodies would


Validating xbrl today

XBRL Taxonomy

Calculation and

Other Linkbases

Element Schema

Imports

Imports

Schema Validation

Form AA Schema

Schedule BB Schema

“Include only directors’ comp”

Schema Validation

Schema Validation

CalculationArc cwa Validation

Form BB Filing

Validating XBRL today

Current assets, liabilities,

Pretax profit, expenses,

Directors compensation…

“Include only profit and expenses which must be whole numbers”

Form AA Filing


Validation levels

Benefit of Upstream

Validation: Low

Benefit of Upstream

Validation: High

Validation Levels

  • Data elements

    • “Current assets” is represented by uk:ast.cur

  • Primitive data types

    • The value of uk:ast.cur must be nine digits and not negative

  • Compound data structures

    • A Maturity Breakdown must contain Loans, Securities and Derivatives

  • Calculated data values

    • RIAC4410 = RIAC4411 + RIAC4412, plus or minus 1

  • Co-Constraints among data values – “Business Rules”

    • Box27 is True if and only if Box28 is the same as Box29

  • Cross-document constraints

    • If Box28 is larger than any other value ever reported, Var50 is True


Computation linkbases sample business rule
Computation LinkbasesSample “business rule”

Upper tolerance

FRB Edit Check 0125

True/false

Result

Constant

Lower tolerance

Riad4011-Q1 >= Riad4022-Q2

Formula

Constant

Variable

Outstanding Loans in Q1

Monetary

Variable

Outstanding Loans in Q2

Monetary


Computation linkbases vun kannon
Computation Linkbases (Vun Kannon)

<element name="FRB-EDCK-0125" type="xbrl:booleanItemType">

<annotation>

<documentation>

Current quarter value should be greater than or equal to previous quarter's value.

</documentation>

<appinfo>

<xbrl:formula select="(number($riad4011-q1) - $lower_tolerance)

>= (number($riad4011-q2) + $upper_tolerance)"

xlink:type="resource" xlink:label="RI_FRB-EDCK-0125_fm" xlink:title="RI_FRB-EDCK-0125_fm">

<xbrl:variable name="riad4011-q1" xlink:type="simple" xlink:href="ffiec-031.xsd#riad4011">

<xbrl:precondition name="period" interval="m" value="6 9 12"/>

<xbrl:precondition name="period" minimum_value="20010101"/>

</xbrl:variable>

<xbrl:variable name="riad4011-q2" xlink:type="simple" xlink:href="ffiec-031.xsd#riad4011">

<xbrl:restriction name="period" interval="m" offset="-3"/>

</xbrl:variable>

<xbrl:constant name="upper_tolerance" value="0"/>

<xbrl:constant name="lower_tolerance" value="0"/>

<ffiec:edit type="i"/>

</xbrl:formula>

</appinfo>

</annotation>

</element>


Entity linkbase proposal
Entity Linkbase proposal

  • Proposed additional computation / validation requirements:

    • Ability to define, publish and re-use general financial formulas

    • Ability to express computational relationships across entities


Entity linkbase proposal1
Entity Linkbase proposal

  • Common need to represent financial relationships among subsidiaries, owned assets, etc.

TLA

Enron Group

(Virtual)

St. Advil’s

Hospital

owns

100%

owns

50%

owns

100%

BFD

TBD

owns

100%

owns

100%

Enron

Enron JV’s (Virtual)

MA_571XVH

(Asset)


Entity linkbase proposal sample fragment
Entity Linkbase proposalSample fragment

<ownershipLink>

<!-- TLA has two fully owned subsidiaries, TBD and BFD. -->

<entity xlink:label="tla" xlink:type="resource" xlink:title="tla“ />

<entity xlink:label="tbd" xlink:type="resource" xlink:title="tbd"/>

<entity xlink:label="bfd" xlink:type="resource" xlink:title="bfd"/>

<ownershipArc weight="1" from="tla" to="tbd" xlink:type="arc"/>

<ownershipArc weight="1" from="tbd" to="tla" xlink:type="arc"/>

<ownershipArc weight="1" from="tla" to="bfd" xlink:type="arc"/>

<ownershipArc weight="1" from="bfd" to="tla" xlink:type="arc"/>

</ownershipLink>

TLA

owns

100%

owns

100%

BFD

TBD


Augmented computation linkbase compact reusable business rules

All Owned Entities

Corresponding “Flow” type items

in corresponding Periods

For all Owned Entities

Corresponding “Flow”type items

in corresponding Periods

For all Owned Entities

Corresponding “Flow”type items

in corresponding Periods

Augmented Computation Linkbase:Compact, reusable business rules

  • TLA Q1 Revenue = TBD Q1 Revenue + BFD Q1 Revenue

  • HPCQ Q2 Interest = HP Q2 Interest + Compaq Q2 Interest

  • etc…

Upper tolerance

Check

True/false

Owner/Owned Flow Items

Formula

Constant

Lower tolerance

Result

Owning Entity

All “Flow” type Items

In All Periods

Variable

Variable


Augmented computation linkbase sample business rule
Augmented Computation Linkbase Sample “business rule”

<xbrl:formulaType select="(number($R1)) - $lower_tolerance) >= (number($R2) + $upper_tolerance)"

xlink:type="resource" xlink:label="GTPP" xlink:title="GTPP">

<xbrl:variable name="P" type="period"/>

<xbrl:variable name="E" type="entity"/>

<xbrl:variable name="I" type="item"/>

<xbrl:variable name="R1">

<xbrl:precondition name="entity" bind="$E"/>

<xbtl:precondition name="item" bind="$I"/>

<xbrl:precondition name="period" bind="$P"/>

<xbrl:precondition name="period" interval="m" value="6 9 12"/>

<xbrl:precondition name="period" minimum_value="20010101"/>

</xbrl:variable>

<!-- ... -->

</xbrl:formulaType>

<xbrl:formulaInstance xlink:label="GTPP">

<xbrl:bind name="P" value="20010101P3M"/>

<xbrl:bind name="E" xlink:href="entity.xml#bailey_bank"/>

<xbrl:bind name="I" xlink:href="ffiec-031.xsd#riad4011"/>

</xbrl:formulaInstance>

…but my point is…


Creating a specification in a capital s standards body
Creating a Specification in a “capital-S” Standards Body

  • Requirements document

    • Market requirements – define needs, assess current solutions

    • Technical requirements – compatibility with other open specs

    • Use cases – specific cases to be covered

  • Specification document

    • Technical documents including design rationale

  • Reference implementation

    • Sample instances, documentation of instances

    • Sample application that illustrates correct semantics

  • QA and Review process

    • Define criteria, set deadlines, have 2nd editor, vote.


Implementation profiles
Implementation Profiles

  • Excited advocates of XBRL face cost uncertainties

    • Process analysis of exporting, transmitting, revising, importing

    • Authenticating sender and receiver, privacy, version control

    • Schema and linkbase version management, repositories

  • Current solutions require reinvention of wheels

    • Plug XBRL payloads into an existing communication path

    • Develop dedicated login, signature, transport

  • Publish suggested bindings to other specifications

    • OFX2 – not typically used for reporting, but it would work

    • SOAP / WSDL / UDDI / XLANG – Web Services

    • ebXML – business transaction protocol, process definitions


Producer consumer interactions appearing in all e reporting

Register, retrieve, update producer and producer standing data;

Register, revoke, update authorized persons at the producer;

Register, revoke, update authorized intermediaries reporting on behalf of the producer;

Obtain new versions of the reporting form; communicate other change notices;

Submit a test report, submit an actual report;

Obtain an error check or analysis on a report;

Recall a previously submitted report; submit an updated report; modify individual data items within a report;

Confirm acceptance or rejection of a report;

Obtain a transaction history, version history; access log, and detailed audit trail of reports, by institution and/or report.

Producer-Consumer interactions appearing in all e-reporting


Frequently asked question how will xbrl impact content based businesses
Frequently Asked Question: data;How will XBRL impact content based businesses?

  • Intermediaries’ value added does not change

    • Completeness – History and breadth

    • Consistency – Data linkage via unique identifiers

    • Availability, Anonymity of access

    • Customization, Convenience

  • Intensifies competition over unique content

  • Producer & consumer behaviors change slowly

Intermediary

Consumer

Producer

Intermediary


Frequently asked question how will xbrl impact content based businesses1

Source: data;

Liv Watson, Edgar Online

Frequently Asked Question:How will XBRL impact content based businesses?

  • Less data preparation

  • Less data re-keying

  • More direct communication among processes

  • More emphasis on analytics

  • Dashboards

  • Expansion of non-financial information content

  • Rapid transformation of products

  • Semantic analysis

  • Information agents

  • Reduced data tailoring costs and revenues

  • Reduced application tailoring costs and revenues


Icc information

Source: data;

Terry Dawson, ICC

ICC Information

  • Part of the Bonnier Group, BBI

    • 61 companies covering 19 European countries

    • local information specialists

    • core competence based around content

    • XML adopted throughout BBI

  • ICC Information - UK & Irish company info.

    • Private Companies, Directors & Shareholders

      • Capture

      • Analysis

      • Direct & Indirect distribution


Why xbrl is important to icc

Source: data;

Terry Dawson, ICC

Why XBRL is important to ICC

  • Standardisation of content is always important!

  • Isolates content value in purchasing decisions

  • Provides greater distribution opportunities

  • Standardises delivery platforms beyond XML

  • Supports analysis methods and data structure

  • Potential to significantly reduce costs

  • Leverages existing technology and skills

  • Positive revenue impact


Mid and long term impacts

Source: data;

Terry Dawson, ICC

Mid and Long-term impacts

  • For the Industry

    • reduced switching costs / development expense

    • increasing emphasis on content and end-user integration

    • reduced publishing costs

    • intermediaries must seek new ways of adding value

  • For ICC Information

    • greater ability for content to be integrated in a wide variety of applications

    • cost of capture reduces (subject to UK Companies House & other Company Registries adopting)


Frequently asked question why xbrl instead of our own schemas
Frequently Asked Question: data;Why XBRL instead of our own Schemas?

  • Don’t reinvent the features of XBRL

    • Item types – financial parameters

    • Predefined concepts (labels, references)

    • Entities, periods, segments, scenarios

    • Extensibility using XLink

  • Business Information

  • that is

  • Financial in nature

  • Enhances standard definitions

  • Refers to multiple entities

  • Refers to multiple periods

9,000

EPS

Information

Producer

Information

Consumer

€ 2.5m

57%

Information

Producer

Information

Consumer

Information

Producer

Information

Consumer


Frequently asked question why xbrl instead of our own schemas1
Frequently Asked Question: data;Why XBRL instead of our own Schemas?

  • ICAEW

  • IASB

  • AICPA

  • IDW

  • JICPA

  • CICA

  • CPAA


Frequently asked question what is xlink and why is xbrl based on it

b data; explains a

b is the same as c

Frequently Asked Question:What is XLink and why is XBRL based on it?

  • XLink is a W3C standard way to use XML to represent all kinds of relationships between XML elements no matter where they are.

Linkbase

XML Document 1

XML Document 2

<P id=“c”>

<P id=“a”>

<P id=“b”>


Xbrl uses xlink to represent all relationships between data elements

<Label> data;Current Assets</Label>

<element id=“ast.cur”>

Definition:

more

general

label

label

<Label>Inventory</Label>

Presentation:

before

reference

<P>A formal explanation of Inventory in the Accounting Literature</P>

<element id=“ast.fixed”>

XBRL uses XLink to represent all relationships between data elements

<element id=“ast.inv”>


Xlink allows customization and explicit modular changes to reusable material

<Label> data;</Label>

<element id=“ast.cur”>

Definition:

more

general

<Label> </Label>

Presentation:

before

reference

<P>A formal explanation of Inventory in the Accounting Literature</P>

<element id=“ast.fixed”>

XLink allows customization and explicit, modular changes to reusable material

label

label

<element id=“ast.inv”>


Frequently asked question what about other financial markup languages
Frequently Asked Question: What about other financial markup languages?

  • MDDL – Market Data

  • RIXML – Research Reports

  • FpML – Financial Instruments

  • SMDX – Statistical Metadata

  • ISO 15022 – UML repository of financial data fields and business processes (SWIFT, FIX, etc.)

  • NewsML – News Packaging and Distribution

  • PRML – Press Releases

  • IFX and OFX – Financial transactions


What is the role of xbrl in finance

Source: markup languages?

Tony Coates, Reuters

What is the Role of XBRL in Finance?

  • Beyond company reports, XBRL is a good format to choose wherever a numerical breakdown/roll-up needs to be expressed.

  • If there are no such breakdowns, then the main XML file risks being just another XML file

  • Little to be gained from using XBRL, unless a significant proportion of items have accepted XBRL definitions

  • So it is a matter of horses for courses

  • XBRL’s forte is numerical breakdown/roll-ups

  • Supports drill-down into numbers of interest.


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