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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

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)


Overview
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


Markup
Markup

  • What does this number mean?

    • 3763000000


Xbrl today tomorrow sla ny business finance february 11 2009
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)



Markup1
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>


Markup2
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”


Xbrl markup
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



Xbrl today tomorrow sla ny business finance february 11 2009
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



3m s financials 9 30 2008
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”


Xbrl instance dts
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?


Xbrl instances
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




Xbrl today tomorrow sla ny business finance february 11 2009
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


Xbrl today tomorrow sla ny business finance february 11 2009
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


Sec pcaob
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


Xbrl us
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


Xbrl us1
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


Adding value
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



Xbrl today tomorrow sla ny business finance february 11 2009

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


An opportunity
An Opportunity

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


Challenges opportunities
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


Summary
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!


Resources
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


Xbrl today tomorrow sla ny business finance february 11 2009

The future is already here – its

just unevenly distributed!

William Gibson

Thanks for your attention!

Skip