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Tax Data Collection and Other Nightmares XBRL GL, the Journal Taxonomy, Today

Tax Data Collection and Other Nightmares XBRL GL, the Journal Taxonomy, Today. Internal Reporting Track, November 5, 2003 8 th XBRL International Conference, Seattle, Washington, USA Eric E. Cohen, eric.e.cohen@us.pwc.com. Audit Process Today. Following up with IRS. Taxpayer. Accountant.

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Tax Data Collection and Other Nightmares XBRL GL, the Journal Taxonomy, Today

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  1. Tax Data Collection and Other Nightmares XBRL GL, the Journal Taxonomy, Today Internal Reporting Track, November 5, 2003 8th XBRL International Conference, Seattle, Washington, USA Eric E. Cohen, eric.e.cohen@us.pwc.com

  2. Audit Process Today Following up with IRS Taxpayer Accountant Agent Audit Results

  3. I want to be able to access the underlying detail to prove what you have reported! I don’t want you to have that access – but I want to be able to get that information myself! One solution - or many? My life would be easier if the client’s detail automatically populated my write-up software.

  4. Employment Corporate Income Individual Income Total Taxes Property Sales All Others Agencies Focus in on Tax Filing

  5. But … Is Everything on the Level?

  6. Service Congress Treasury Tax Policy Analysts Regulator filing format CLIENT Guidance Checklists Practitioner Aids Organizer Regulations News Instructions Filing formats Reference Integrated Non-integrated Outsources ASP Trading Partners Lenders Other Regulators The Market Regulator Service Extranet 3rd Parties Regulator Software developers

  7. Holistic = Win-win-win? • Format useful to tasks other than tax audit • Consolidation (drill down from tax audit) • Movement to internal/external auditors • Movement to budget/forecast • Standard format for ASP marketplace • Dealing with Taxes • Direct • Indirect

  8. Data Transfer File Needs to Serve • ONE TOOL • Consolidation tool across systems • Feeder for management systems • Tool for internal and external auditors • Audit • Tax • Electronic Audit Trail from source to final • Paper source • Electronic source • SIMPLE ENOUGH FOR ALL

  9. Depreciation Shared Needs for Direct and Indirect Taxes Tax specific accounts Accounts Resources Documents Tax specific entries Entries People XBRL

  10. Standards: Benefits to Firms Small and Large • Smaller firms • Internal integration – transparent, simple • Integration with CPA tax systems • Large company • Preparation • Consolidation • Audit trail • Filing • Format • Transport • Integration with financial statement preparation • Tax Note • Research, cross organization analysis of effects of changes

  11. To Meet The Need: XBRL GL • XBRL GL, the Journal taxonomy • Integrates accounting systems • Provides detail later summarized in • Financial reporting • Tax • Performance • Represents almost anything categorized to "accounts“ • Customer and vendor master file information • Detail journals • Information represented in US, Japanese or European general ledger packages

  12. Why is XBRL GL Needed? Similar Data Account, Amount, Date Different Data Dictionaries: Field names, field order System 1: AccountNo, Amount, Date System 2: MonetaryAmount, PostDate, AccountNumber System 3: PostingDate, Account#, Value System 4: Date, Journal, Account, Amount Different Data Formats CSV ASCII WKS Different Representations for the same concepts in common data field Journal: PJ, Payroll Journal, Payroll Date: 12-31-03, 20031231, 12/31/03

  13. XBRL GL Spans the GAP XBRL GL provides platform for agreed-upon and well defined list of concepts – make sure my “Account” and your “Account” means the same thing (not bank account or customer account but GL account.) Similar Data Account, Amount, Date Based on XML, XBRL GL is order independent; sharing element names for import/export means that AccountNo, AccountNumberm Account# and Account will all be express as one common name; applications will know what to expect inpublishing and consuming data files. Different Data Dictionaries: Field names, field order System 1: AccountNo, Amount, Date System 2: MonetaryAmount, PostDate, AccountNumber System 3: PostingDate, Account#, Value System 4: Date, Journal, Account, Amount Different Data Formats CSV ASCII WKS So many external data formats; XML provides a popular and increasing supported / demanded data format. Different Representations for the same concepts in common data field Journal: PJ, Payroll Journal, Payroll Date: 12-31-03, 20031231, 12/31/03 Once you have agreed on data field standardization, software applications require agreement on content in many cases. XBRL GL provides enumerated values to supplement XML data standards to help in this area.

  14. Proprietary Formats: XML Alone qbxml qbxml smbxml smbxml Intacct xml Intacct xml SAP SAP Peoplesoft xml Peoplesoft xml Oracle

  15. Standards-based Data Interchange qbxml XBRLGL qbxml smbxml smbxml Intacct xml Intacct xml SAP SAP Peoplesoft xml Peoplesoft xml Oracle Industry transactional XML

  16. XBRL GL Can Represent • The chart of accounts, representing both posting accounts and customers, vendors, or other items that may be assigned an account in an international sense of the word; • Journal entries, bothfrom subsystems and within the General Ledger or financial reporter; • Document summaries, with generic representations of the information that is presented on standardized business documents; • Descriptions of customers, vendors, employees and banks, either in connection with the chart of accounts (European style) or independently (US style); • Descriptions of inventory items, performance metrics or other quantifiable items; • Status documents, including listings of receivables still owing, payables yet owed, inventory in stock, as well as • Standard accounting summaries such as trial balances, “general ledger”, source journals and other accounting-oriented summaries.

  17. Tax Regulators Investors Creditors Lenders Website Aggregators One way One way XBRL BUSINESS REPORTING XBRL GL Journal Taxonomy BUSINESS ERP G/L Packages CRM Transaction Creation 2-way 2-way (e-)Business X12, EDIFACT, XML INITIATIVES Suppliers Customers • Orders • A/P • Delivery • Orders • A/R • Delivery XBRL GL Fills the GAPS between GAAPS Detail to summary Intra system Detail Accounting recognition/ classification

  18. From Bar Coded Transactions through … • Transactions (eCommerce) • Accounting entries and adjustments • Estimates, allocations, eliminations • Management, accountant entries Common building blocks - REA

  19. I N V O I C E Invoice #: 10037 May 2, 2003 ABC Sales Corp. Item Description Qty Extension 1078 Blue Widget 200 2,803.78 1083 Cyan Widget 100 1,402.93 Sub-total: 47,592.33 Freight: Total: 47,592.33 <documentType>invoice</documentType> <documentNumber>10037</document Number> <documentDate>2003-05-02</documentDate>

  20. Uses Of XBRL GL UBL Universal Audit Trail One Vocabulary One Framework UAT MISMO HR-XML Accounting System Trial Balance Accounting System Budget CPA Adjustments Accounting System A Chart of Accounts Accounting System B Customers, Vendors, Employees Open AR, AP, Inventory Status Journal Entries, Ledger History

  21. Concluding • One format • From initial entry through the information supply chain • Facilitating audit • Reducing compliance burden • With international agreement and usage • Facilitating a universal audit trail • Facilitating write all, black box, audit trail report • Providing integration for management and beyond

  22. After the Audit

  23. <xbrl> Eric E. Cohen eric.e.cohen@us.pwc.com Questions? • Eric E. Cohen • PricewaterhouseCoopers • eric.e.cohen@us.pwc.com • (585) 271-4070 • Find out more • www.xbrl.org • www.pwcglobal.com/xbrl

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