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eXtensible Business Reporting Language

eXtensible Business Reporting Language. Gent, April 2005. Enrique Bonsón Professor of Accounting, University of Huelva, Spain Vicepresident of XBRL Spain. Agenda. Digital reporting. 1. 2. XML-XBRL. XBRL Taxonomies. 3. XBRL Consortium. 4. (logotipo). Digital reporting.

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eXtensible Business Reporting Language

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  1. eXtensible Business Reporting Language Gent, April 2005 Enrique Bonsón Professor of Accounting, University of Huelva, Spain Vicepresident of XBRL Spain

  2. Agenda Digital reporting 1 2 XML-XBRL XBRL Taxonomies 3 XBRL Consortium 4

  3. (logotipo) Digital reporting White Book for Spanish Accountig Reform Guidelines: Codes of good practices Universal exchange format: XBRL Assurance services for digital information

  4. (logotipo) Codes of good practices AECA 2002 Regulations: Transparency law (july 2003) Developed by: Order of the Ministry of Economy ECO/3722/2003 Circular 1/2004 CNMV

  5. Agenda Digital reporting 1 2 XML-XBRL XBRL Taxonomies 3 XBRL Cosortium 4

  6. Innovation Technology Evolution of the Internet Browse the Web Connect pre-Web WebPages FTP, E-Mail,Gopher Presentation Connectivity TCP/IP HTML

  7. Browsing the Web (Content—without Context) Searching for the word “Mercury” on the Web can provide a wide variety of results—too many—such as: Hg

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

  9. Innovation Technology Evolution of the Internet Program the Web Browse the Web Web Services Connect pre-Web WebPages Automation FTP, E-Mail,Gopher Presentation Connectivity TCP/IP HTML XML

  10. XML • XML stands for: • eXtensible • Markup • Language • Universally accepted method of exchanging information

  11. What Is XML? • “XML is a platform-independent, self-describing, expandable, standard data exchange format”

  12. XML is Platform Independent • Windows • Unix • Macintosh • Mainframe

  13. XML is Self-Describing • Example: • <DATE>May 27, 2004</DATE> • Describes the information, not the presentation • Format neutral

  14. ORDER SOLD-TO PERSON FIRSTNAME Roberto LASTNAME Serra SOLD-ON 20040206 ITEM PRICE 15.95 BOOK AUTHOR Brown, Dan TITLE El código da Vinci XML <?xml version="1.0"?> <ORDER> <SOLD-TO> <PERSON> <LASTNAME>Serra</LASTNAME> <FIRSTNAME>Roberto</FIRSTNAME> </PERSON> </SOLD-TO> <SOLD-ON>20040206</SOLD-ON> <ITEM> <PRICE>15.95</PRICE> <BOOK> <TITLE>El código da Vinci</TITLE> <AUTHOR>Brown, Dan</AUTHOR> </BOOK> </ITEM> </ORDER>

  15. XML is Extensible • Whereas HTML has a fixed set of tags • <H1>, <B>, <PRE> • XML lets you create your own tags • <sugary-substance> • <Shakespearean-character> • <cash-equivalent>

  16. HTML <html> <body> <p>Purchase Order, Stock Number 1002, 2, 100</p> </body> </html> XML <purchase_order> <stock_number>1002</stock_number> <price>100</price> <number>2</number> </purchase_order> HTML vs. XML

  17. Tags are defined by industry consortiums Each industry’s standardtags are commonly referred to as a taxonomy Who defines the tags?

  18. XML & Data Exchange Improves the way companies -- and applications -- share information Enjoys strong industry and vendor support

  19. XML Summary • Uses tags to give context and structure to the content • Published as a recommendation by the W3 Consort • Auto Industry • <CAR-MODEL> • Provides a common way for disparate systems to exchange specific information (application integration) • Provides a means to separate data from style so a single source can be output for multiple uses • Separates data from logic of applications so that it can be reused for multiple purposes.

  20. Why Now ? HTML is the language that opened up the internet, enabling users to browse the web. Internet Domain Expertise XML The next step to using the internet for business. XBRL is a global e-business language for financial information, reporting and analysis.

  21. XBRL: eXtensible Business Reporting Language • Markup language based on XML • Created by XBRL.org • For financial information interchange among computers all over the world • A global effort to build the “digital business language” • To be made by all the financial information supply chain participants. • Http://www.xbrl.org

  22. Five Years Ago …October 14, 1999 XBRL began with the idea of a single individual - Charlie Hoffman, from a small CPA firm in a small town … … and 13 Sponsoring Companies

  23. XBRL is similar to the U.P.C Seal 99% of all packaged goods. “We showed that it could be done on a massive scale, that cooperation without antitrust implications was possible for the common good, and that business didn’t need the government to shove it in the right direction” — Alan Haberman, Chairman, Symbol Standardization Subcommittee “I think the industry has sold itself on a program that offers so little return that it simply won’t be worth the trouble and expense” — A Midwest Chain Executive, 1975

  24. Tax Regulators Investors Creditors Lenders Website Aggregators One way One way ERP G/L Packages CRM Transaction Creation 2-way 2-way • Orders • A/P • Delivery • Orders • A/R • Delivery XBRL Adds Reporting to E-Commerce BUSINESS Suppliers Customers

  25. Tax Regulators Investors Creditors Lenders Website Aggregators One way One way XBRL BUSINESS REPORTING BUSINESS ERP G/L Packages CRM Transaction Creation 2-way 2-way (e-)Commerce OTHER XML INITIATIVES Suppliers Customers • Orders • A/P • Delivery • Orders • A/R • Delivery XBRL Adds Reporting to E-Commerce

  26. XBRL is … • Standards-based electronic language for financial information, reporting and analysis • Not chart of accounts • Not accounting standards • Does not require greater disclosure • Does not require more frequent reporting

  27. XBRL for Financial Statements XBRL for G/L Journal Entry XBRL for Reporting Regulatory Filings XBRL for Business XBRL for Audit XBRL for Event Reporting Schedules Tax Filings XBRL Planned Specifications Internal External Investment Business Processes Processes Financial Financial and Lending Operations Reporting Reporting Analysis Financial Publishers Companies Investors Participants Participants and Data Aggregators Trading Management Auditors Regulators Partners Accountants Software Vendors

  28. Financial Reporting Across Jurisdictions Illustrative Taxonomy Development Matrix Australia U.K. U.S. IAS Germany Canada US GAAP Done Commercial & Industrial Commercial & Industrial (C&I) Companies (C&I) Companies US GAAP C & I, extended to C & I, extended to Mutual Funds Software Companies … … … … … … … … Industry Specific Reporting US GAAP C & I, extended to … … … … … … … … … … … … … … … … … … … … C & I, extended to … … … … … … … … … … … … … … … … … … … … Media & Entertainment Media & Entertainment US GAAP … … … … … … … … … C & I, extended to … … … … … … … … … C & I, extended to Agriculture Media & Entertainment US GAAP Financial Services Financial Services Companies … … … Companies … … … … … Roadmap for Taxonomies Today Within FYs

  29. XBRL Documents • Common interchange format and storage is good information management practice • Reduces redundancies & discrepancies • Repeatable processes using tools • A platform for continuous reporting Printed Financials Regulatory Filings Web Site Accounting System Tax Return Explanatory Text Third Party Information Trade Filings

  30. Today’s external reporting processes • Rework and delay • Ad hoc and non repeatable • No path forward Printed Financials Regulatory Filings Web Site Accounting System Tax Return Explanatory Text Third Party Information Trade Filings

  31. Financial Information Supply Chain Today’s External Position Company Financials Regulatory Filings Public Financials Company Financials Market Data Competitor/Industry Financials Analyst Analytical Models Assurance

  32. Financial Information Intermediary Supply Chain External Position Company Financials Regulatory Filings Public Financials Company Financials Financial Supply Chain Market Data Competitor/Industry Financials Analytical Models Assurance

  33. XBRL documents can be: • Prepared efficiently • Exchanged reliably • Published more easily • Analyzed quickly • Retrieved by investorssimply

  34. <10% Mechanics Best Practice: Time for Loan Processing—1.75 days Value-added Analysis and Decision-making? 90% + time spent on Mechanics With XBRL? More Time for Analysis => Better Analysis => Less Risk Or Mechanics Analysis Mechanics Analysis Mechanics Analysis Mechanics Analysis Process more loans in the same amount of time

  35. Benefits of XBRL • Reduce cost of analyzing and reporting financial information • Increase speed and efficiency of business decisions • Enhance the distribution and access of existing financial statement information • More readily exchanged • Increase and enhance analysis

  36. quiz So when will this happen? • Never. • After I retire. • Before I retire but too late for me to have to worry about it. • Sooner than I want to admit, but I still have enough time to procrastinate. • Next five years. • Next two to three years.

  37. SEC’s Strategic Plan Pg. 58: Accessibility and Usability of Registrant Filings: The SEC will explore the use of “tagged data” formats such as XBRL for financial disclosure, streamline forms and filing processes for registrants, and improve the internal processes and analytical tools used by staff to review filings.

  38. SEC Public Announcement The Commission will seek public comment on alternative methods and the costs and benefits associated with tagged data. In addition, the Commission will consider a staff proposal to accept voluntary supplemental filings of financial data using eXtensible Business Reporting Language (XBRL). This voluntary program would enable the Commission staff to further investigate the types of data tagging currently available in the marketplace. The Commission may propose a rule this fall that would, if adopted, establish the voluntary program beginning with the 2004 calendar year-end reporting season.

  39. SEC Proposed Rule September 27, 2004 • Proposed Rule to Establish Voluntary Programfor Reporting Financial Information of Edgar Using XBRL. • 30 day comment period • Concept Release • 30 day comment period

  40. Agenda Los nuevos informes financieros 1 2 XML-XBRL Taxonomías XBRL 3 El consorcio XBRL 4

  41. Equivalent to a dictionary They content all the elements to be used within a XBRL document Global taxonomies: AR y GCD International taxonomies: IASCF-IFRS y CRAS National-industry extensions National taxonomies: USA-GAAP, German GAAP, Australian GAAP Industry extensions XBRL Taxonomies

  42. AR TAXONOMY

  43. GCD TAXONOMY

  44. IASCF-IFRS TAXONOMY • Based on the IAS-IFRS bound volume • A digital version of IAS-IFRS • Primary Financial Statements • Explanatory Disclosures and Accounting Policies

  45. International Financial Reporting Standards (Taxonomía IFRS-GP) Taxonomía CRAS Taxonomía DGI Extensión nacional Extensión sectorial Extensión nacional sectorial Extensión para una empresa Documento XBRL

  46. Agenda Digital reporting 1 2 XML-XBRL XBRL Taxonomies 3 XBRL Consortium 4

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