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XBRL Today & Tomorrow SLA-NY Business & Finance February 11, 2009

XBRL Today & Tomorrow SLA-NY Business & Finance February 11, 2009. Clinton E. White, Jr (Skip) Professor of Accounting & MIS Lerner College of B&E University of Delaware (www.buec.udel.edu/whitec/NYFeb2009). Overview. What is XBRL?

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XBRL Today & Tomorrow SLA-NY Business & Finance February 11, 2009

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  1. XBRL Today & TomorrowSLA-NY Business & FinanceFebruary 11, 2009 Clinton E. White, Jr (Skip) Professor of Accounting & MIS Lerner College of B&E University of Delaware (www.buec.udel.edu/whitec/NYFeb2009)

  2. Overview • What is XBRL? • An XML vocabulary for business operations and financial reporting! • It is information versus data! • How does it work? • Instance docs report facts as values of concepts • Taxonomies define the concepts & their relationships • How does one work with XBRL? • Many tools in an evolving market

  3. Markup • What does this number mean? • 3763000000

  4. XML • The eXtensibleMarkupLanguage • Actually a set of rules & syntax: • Creating XML documents • Processing XML documents • Creating XML languages • Schema, XLink, Namespaces, XSLT, XQuery • Creating XML vocabularies • XBRL • UBL (the Universal Business Language)

  5. Accounting “data”

  6. Markup • What if we start marking up this piece of accounting data with metadata? • First, mark it up with a name representing an accounting concept: • <AccountsReceivableNetCurrent> 3763000000 </AccountsReceivableNetCurrent>

  7. Markup • Then, add more “context” information: • Identify which taxonomy this accounting concept is defined in: • <us-gaap:AccountsReceivableNetCurrent> 3763000000 <us-gaap:AccountsReceivableNetCurrent> • Identify what reporting context applies: • contextRef=“I2008Q3” • And what currency & precision applies: • unitRef=“USD” decimals=“-6”

  8. XBRL Markup • And, what we now have is: • <us-gaap:AccountsReceivableNetCurrentcontextRef=“I2008Q3” unitRef=“usd” decimals=“-6”> 3763000000</us-gaap:AccountsReceivableNetCurrent> • A piece of marked up “information” in XBRL format that can be understood by a human or a software application

  9. Accounting “information”

  10. XBRL • XBRL taxonomies: • Agreed upon names/definitions for accounting & financial reporting “concepts” • Standardized = Understandable, Comparable, Efficient, Reusable, … • XBRL instance documents: • Report facts tagged with agreed upon concept names

  11. 3M Company’s financials (09/30/2008)

  12. 3M’s Financials (9/30/2008) • Understanding 3M’s financials: • 224 reported “items” (facts): • 212 “elements” from US-GAAP XBRL taxonomies • 12 “extension elements” from MMM taxonomy • 8 separate context elements • 2 separate taxonomies each with linkbases • us-gaap – “primary accounting & reporting elements” • mmm – “3M’s extension elements”

  13. XBRL Instance & DTS How this Element relates to other Elements XBRL Taxonomy (dictionary of elements representing concepts) How this Element is calculated XBRL Instance Document • Each XBRL instance is linked to at least one XBRL taxonomy • Which in turn is linked to XBRL linkbases which describe important characteristics about each element • DTS How this Element should be presented in a std. rpt. What labels are used for this Element What is the definition & authoritative reference for this Element What dimensions apply to this Element?

  14. XBRL Instances • The bad news: • XBRL instances representing SEC filings are very complex and difficult for a human-reader to understand • The good news: • XBRL instances are meant to be consumed by software applications • And, the applications and tools are getting better every day

  15. US GAAP Taxonomies V1.0

  16. US GAAP Taxonomies V1.0

  17. SEC • Old EDGAR: • Document filing system • PDF, Word, HTML • New EDGAR: • Interactive data repository • Each item is tagged in a standardized, computer-readable report • Interactive analysis tools & support • Advisory Committee on Improvements to Financial Reporting

  18. SEC • XBRL filings: • Issued “proposed rule” requiring XBRL filings (April 2008) • Issued rule “mandating” XBRL filing in 3 phases (December 2008) • Phase 1: • Require 500 largest companies to “furnish” XBRL financial statements w/footnotes as blocks of text • Phase 2: • Require all domestic accelerated filers to join • Phase 3: • Require all companies to “file” in XBRL format w/detailed footnotes

  19. SEC & PCAOB • Issues: • Should assurance be provided on XBRL statements? • Is the phase-in too conservative? • Should tagging be “deeper”? • Starting with block tagging of disclosures • More detailed tagging of disclosures to be phased in with subsequent filings

  20. XBRL.US • XBRL US Taxonomy Project • 1.0 Release (2008-04-28) • Banking & savings institutions • Broker dealer • Commercial & industrial • Document and entity information • Insurance • Real estate • Next release: mid-February 2009 • usgaap.xbrl.us

  21. XBRL.US • XBRL US Taxonomy Project • Preparer’s Guide (April 2008) • Public review workshops & Webinars • Case study to demonstrate the application of XBRL to external reporting and consumption and analysis “before” and “after” • Comcast, 3M Corp, & EDGAR Online

  22. Adding Value • How does XBRL add value? • Standardizes business & performance information – • “Processing information not data” • More reliable, accurate and reusable • Can help eliminate “spreadsheet hell” • From manual re-entry and assembly processes to automated analysis & validation processes • Can increase transparency & shareholder value • More usable, comparable, & more analysts coverage

  23. http://www.sec.gov/spotlight/xbrl/xbrlwebapp.shtml

  24. The Business Reporting Supply Chain XML Specs XBRL External Reporting Processes XBRL GL Business Operations Internal Business Reporting External Business Reporting Investment Lending Regulation Economic Policymaking Participants Central Banks Companies Financial Publishers & Data aggregators Investors Trading Partners Management accountants Auditors Regulators Software Vendors Source:Mike Willis, PWC & XBRL

  25. An Opportunity • Treat it as an opportunity to streamline internal and external reporting processes and strengthen internal controls over the reporting process

  26. Challenges/Opportunities • New & unfamiliar IT • Tools & assistance evolving rapidly • Can dramatically improve info. processing • Lack of professional guidance • Can participate as it evolves • Standardization means efficiency • Greater agility in managing info. • Faster, more flexible access & analysis • Lower compliance costs

  27. Summary • XBRL is: • An XML vocabulary for standardized business operations and financial reporting • Instance documents report facts, each fact is defined in an XBRL taxonomy • Evolving and will continue to mature • Advice: • Get smart with XBRL - it is part of your future!

  28. Resources • Textbooks: www.skipwhite.com • The Accountant’s Guide to XBRL • The Guide & Workbook for Understanding XBRL • www.rivetsoftware.com • Dragon Tag and Genesis • www.ubmatrix.com • Processing engine and ERP suite • www.fujitsu.com • InterstageXwand • www.windowslive.com • FR Live • www.tryxbrl.com • www.sec.gov

  29. The future is already here – its just unevenly distributed! William Gibson Thanks for your attention! Skip

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