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April 26, 2013

6th University of Kansas International Conference on XBRL Transparency , Assurance, and Analysis. April 26, 2013. J. Louis Matherne Chief of Taxonomy Development lmatherne@fasb.org. Topics. Key Goals for 2013 FASB Financial Data Analysis ASU Integration

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April 26, 2013

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  1. 6th University of Kansas International Conference on XBRLTransparency, Assurance, and Analysis April 26, 2013 J. Louis Matherne Chief of Taxonomy Development lmatherne@fasb.org

  2. Topics • Key Goals for 2013 • FASB Financial Data Analysis • ASU Integration • Understanding User Requirements • UGT Element Usage

  3. Key Goals for 2013 • Concurrent Taxonomy Exposure Drafts (TED) /Implementation Guides (IG) with Accounting Standards Updates Exposure Drafts • Help drive improvements in data quality • Promote a stable taxonomy • XBRL Implementation Guides • Increase input from data aggregators / users • Establish banking / financial services industry group • Support change management for all constituents

  4. FASB Financial Data Analysis

  5. FASB Data Requests • FASB XBRL Team assists in obtaining financial statement data • Disclosure topics where we have provided data: • Expected return of pension plan assets • FVO disclosures • Repurchase agreements • Joint ventures of REITs • Accounting changes and error corrections • Business combinations • Segments • Unremitted foreign earnings • Revenue recognition element use and label terminology

  6. XBRL DataExample 3 – FASB Data Request Query: • Identify trend in expected return on plan assets Can this be obtained through XBRL data?

  7. XBRL DataExample 3 – FASB Data Request Key: Element Name

  8. XBRL DataExample 3 – FASB Data Request Run query

  9. XBRL DataExample 3 – FASB Data Request Results Exported to Excel

  10. XBRL DataExample 3 – FASB Data Request Results - Table

  11. ASU Integration

  12. Financial Reporting Model Focus is on Application Focus is on Principles Accounting Standard Setters Data Modelers Traditional print media New digital media

  13. Taxonomy Exposure Draft Process • Accounting Standards Update (ASU) Exposure Process On FASB AgendaDeliberate ExposureDraft Final Ballot Deliberate Ballot • Taxonomy Exposure Draft (TED) Process ExposeTaxonomyFragment Model Disclosure Watch Engage Revise Revise Final Steps • Create example disclosure with ASU Project Team • Create elements & modeling • Create instance document • Expose TED concurrent with ASU ED • Revise based on public feedback and Board deliberations • Release in base taxonomy as complete

  14. Accounting Standards Updates • XBRL team member assigned to project team based on topic area • Participation/presence at Board discussions • Links on website between exposure documents and XBRL ASU Taxonomy change page • Benefits of earlier integration in the process • Inform standard setting process • Conceptually align approach • Consider implications of data model • Assist with research

  15. Recent Projects • Reclassifications from AOCI • Discussions with project team influenced modeling - users wanted effect of reclassificationadjustmentson Income Statement line items • XBRL Team prepared memo to Board on impact to UGT of presentation considerations • Participated in Board meeting to discuss memo • Follow up with Board member individually for further discussion • Resulted in ASU containing XBRL team recommendation (parenthetical requirement) • Repurchase Agreements • Discussions with project team on differences in definition of repurchase agreements between ASUs (Balance Sheet Offsetting and Repurchase Agreements) • Identified need for additional element to reconcile

  16. Recent Projects • Revenue Recognition • Discussions with project team regarding impact to UGT of changes to presentation and disclosure requirements from original ED • Identified area in which XBRL data could assist project team with research • Clarified intent regarding contract assets/liabilities resulting in potential less impact to UGT • Discontinued Operations • Discussions with project team on appearance of redundancy in disclosure requirements, inconsistency in implementation guidance and reversion of definition • Result is clarification of disclosure, removal of inconsistencies in exposure draft and update of NTS for change in definition

  17. Review of ASU Impact to UGT – XBRL Team • Most current draft available/listen to Board discussions • Important to understand underlying accounting & user expectations • Scope changes impact • Focus on presentation / disclosure areas and implementation guidance section • Identify areas of UGT that will be impacted • Flat file useful for filtering (references, element search) • Amendment section of ASU • Identify disclosure sections of UGT impacted • Consider impact to other areas (cash flow, disclosure overlap)

  18. Review of ASU Impact to UGT – XBRL Team • Assess impact • New elements • Deprecations • Definition changes (conform to style guide) • Calculation relationship changes (additions, deletions) • Reference changes (additions, deletions) • Structure appropriateness • Dimension/Line item approach • Balance type - Income or cash flow perspective • Period type – consider context guide • Item type – consider EFM, SEC Staff Interpretations Question E.21, unit registry • Conform to XBRL Style Guide

  19. Review of ASU Impact to UGT – XBRL Team • Discussion with project team • Prepare targeted questions to clarify open items • If extensive may be helpful to show specific section of ASU compared to section of UGT • Expectations of line items for general requirements • Which amounts expected to agree to face financials • Expectation of further breakdowns of values • Impact to other areas of Codification/UGT • Discussion with TAG • Modeling considerations

  20. Meeting Data Provider Requirements

  21. What we know so far about data provider expectations • Data quality and assurance • Extensions are a concern but can be manageable • Tagged earnings release • Greater coverage of the 10K and 10Q • Reported fact value relationships matter • Much analysis is performed based on topic • How to identify changes from filing to filing and taxonomy to taxonomy • Prefer tabular information over narrative • Expressed concern that service providers are providing conflicting guidance • Looking forward to inline XBRL

  22. FASB – Addressing data provider requirements • Revised, streamlined, and stable calculation hierarchy • Stabilize taxonomy but XBRL taxonomy and instances will continue to change • Need to focus on better change management from a data provider perspective

  23. UGT Element Usage

  24. UGT Element Usage 2012 10-Ks “Rough” Estimate

  25. UGT Element Usage 2012 10-Ks “Rough” Estimate

  26. UGT Element UsageAssume All Used Equally Normalized?

  27. UGT Element Usage Target?

  28. UGT Element Usage – Ideal? UGT Element Usage Target?

  29. Questions ?

  30. Bonus Slides

  31. Data Modeling in the Standard Setting Process

  32. Modeling ASU Presentation and Disclosure Requirements • Shift from modeling based on: • Paper-based financial reports presentations • COD/ASU descriptions and related implementation presentations • Shift modeling to: • Consideration of underlying relationships among fact values • Contemplation of data consumption

  33. Questions we need to ask 1. WHAT is the underlying relationships of reported fact values based on common or unique disclosure structures? • 2. WHAT is the best way to capture the underlying relationship - through a calculation or dimensional model? • 3. WHAT is the most effective way to provide the information to data consumers?

  34. The General Principles Behind Our “Data Modeling” Approach General Principles: • Recognize Primary Domain - Primary Line Items • For example, Balance Sheet items, or “Revenue” etc. • Identify Secondary Attributes or Disaggregation – Dimension • Each disclosure is a further description of face statement fact value attributes

  35. Connect Financial Reports Analysis with Data Modeling Other Considerations: • Same Facts Should be Modeled in the Same Way • Users’ Perspective/Business Objective • Example Reclassification from AOCI ASU The Board received requests from financial statement users looking for the effect of reclassificationadjustmentson INCOME STATEMENT LINE ITEMS; AOCI and reclassification components are two fact value attributes of the primary domain and are modeled as dimensions.

  36. 7 “What” Questions We Should Ask During the Data Modeling Process * Subject to circumstance where no actual financial reports available

  37. Organize the Disclosures in the “Template”

  38. Data Model Scorecard® A tool that helps us evaluate the “template” post data modeling process. www.stevehoberman.com Steve Hoberman & Associates, LLC

  39. Example – Other Comprehensive Income

  40. Disclosing Reclassifications Out of AOCI on the Face Statements How do you distinguish expense amounts before and after the effect of reclassifications out of OCI? How do you distinguish gain on sale of securities amounts before and after the effect of reclassifications out of OCI? Whatif there is more than reclassification adjustment?

  41. Using “Line Item” Approach

  42. Using “Dimension” Approach

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