Improving the quality and
timeliness of internal reports
Walter Hamscher (walter@hamscher.com)
Chair, XBRL International Steering Committee
Consultant to PricewaterhouseCoopers
The business reporting supply-chain
Processes
Business
Operations
Internal
Financial
Reporting
Externa
l
Financi
al
Reporti
ng
Investment,
Lending, and
Regulation
You are here
Financial
Publishers
and Data
Aggregators
Companies
Participants
Trading
Partners
Management
Accountants
Auditors
Software Vendors
Investors
Regulators
Improving the quality and timeliness of
internal reporting using XBRL
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The Goal
The Obstacles
What XBRL Offers
Why XBRL Now
Next Steps
Goal 1: Consistent, uniform data produced
efficiently
Department Level
Form
Data
Submits
Extract
Division Level
Submits
Merge
Data
Prepare
Report
Receives
Find
Sources
Supp Info Query
Forms
Forms
Group LevelParticipants
Send
Form
Data
Division
Detail
Requests
Forms
Receives
Collect
Data
Maintain
Definitions
Distributes
Processes
Goal 2: Repurpose consistent data as
needed
Regulator, Partner…
Analyze
Data
Net
Department Level
Form
Data
Submits
Extract
Division Level
Submits
Merge
Data
Send
Form
Data
Receives
Participants
Collect
Data
Dept Detail
Prepare
Report
Receives
Group Level
Find
Sources
Supp Info Query
Forms
Forms
Requests
Forms
Maintain
Definitions
Distributes
Processes
Improving the quality and timeliness of
internal reporting using XBRL
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The Goal
The Obstacles
What XBRL Offers
Why XBRL Now
Next Steps
Reporting challenges
 Timeliness and quality of
source data and estimates
 Inconsistent terminology
 Changing collection
requirements
 Implementation cost &
resistance to change
Variant of Pareto’s 80-20
postulate:
 80% of effort in reporting
goes into dealing with the
20% of the data that is not
already well-structured and
organized in a stable,
widely used format
Solutions offered by a standard language
 Timeliness and quality of
source data and estimates
 Inconsistent terminology
 Changing collection
requirements
 Implementation cost and
resistance to collaboration
 Minimize data re-keying
and copy-and-paste using a
universal format
 Single definitions shared
within an organization by all
software applications
 Software able to use new
and changing data
definitions immediately
 Open, royalty free,
independent standard and
consortium
Process efficiencies are hard to achieve
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
Different Representations for the
same concepts in common data field
WKS
Journal: PJ, Payroll Journal, Payroll
XLS
Date: 12-31-03, 20031231, 12/31/03
Improving the quality and timeliness of
internal reporting using XBRL
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The Goal
The Obstacles
What XBRL Offers
Why XBRL Now
Next Steps
What is XBRL?
Technical Details
 XBRL = eXtensible Business
Reporting Language
 Freely available extension of XML
(root language)
 NOT a new accounting standard,
ERP, or software package
– Already adopted by SAP,
Oracle, PeopleSoft, Microsoft
Office, Microsoft Business
Solutions, and over 20 other
products
 Leverages existing technology
and can adapt to ANY reporting/
accounting system
Implications
 Maps to existing data in
legacy systems or newer
ERP systems operating
today
 Uses standards to leverage
investments in financial
management systems
 Bridges today’s environment
to future architectures such
as .NET
 Enables a financial reporting
environment in which results
can be shown in a shorter
payback period.
How XBRL differs from XML
XBRL adds to XML:
 Multi dimensional financial
Definitions
data representations
 Financial reporting
vocabularies (taxonomies)
 Aliases and other definition
AKA Liquid Assets
XBRL
Item
“200”
 Mathematical relationships
between concepts
 Flexibility about how to
 Structure for authoritative
policies and guidance
Reporting apps need these
even when using XML
GAAP I.2.(a)
CoA 1100
Cash & Cash Equivalents
relationships
present items to users
References
Presentation
Calculations
Formulas
Cash = Currency + Deposits
Cash ≥ 0
Contexts
US $
FY2003
Budgeted
What XML Offers
Department Level
Form
Data
Submits
Extract
Division Level
Submits
Merge
Data
Prepare
Report
Receives
Find
Sources
Supp Info Query
Forms
Forms
Group LevelParticipants
Send
Form
Data
Division
Detail
Requests
Forms
Receives
Collect
Data
Maintain
Definitions
Distributes
Processes
Co.
Specific
Definitions
Co.
Specific
Definitions
Distributes
Regulators, Partners, Outsourcers
What XBRL Offers
Department Level
Form
Data
Submits
Extract
.
Division Level
Submits
Merge
Data
Prepare
Report
Receives
Analyze
Data
Net
Find
Sources
Supp Info Query
Forms
Forms
Group LevelParticipants
Send
Form
Data
Division
Detail
Requests
Forms
Receives
Collect
Data
Maintain
Definitions
Distributes
Processes
.
Net
Co.
Specific
Definitions
Co.
Specific
Definitions
Std.
Data
Vocabulary
Std.
Data
Vocabulary
Distributes
Internal reporting demonstration
1. Today’s
Asset Summary
Request
3. Today’s
Asset
Report
Site
User
Amherst
2. XBRL
Asset
Request
Analyst
Boston
4. XBRL
Conversion
5. XBRL
Asset
Summary
 Change shape of data, not site user activities
 Reduce manual intervention for data quality
Another internal reporting demonstration
3. Today’s
Payables
Reports
Site
User
Amherst
4. XBRL
Conversio
n
2. Select
from
Taxonomy
5. Payables
Details
6. XBRL
Conversio
n
1. Today’s
Payables
Request
Analyst
Boston
7. Payables
Summaries
 Change shape of data, not site user activities
 Reduce manual intervention for data quality
Basel New Accord (Basel II)
1. Capital Requirements
 Standardized Approach
 Internal Rating - Foundation
 Internal Rating - Advanced *
2. Supervisory Review
3. Market Discipline
 Core disclosures
 Possible supplemental
disclosures
For each portfolio,
 Number of borrowers, and
 Distribution of borrowers
across rating grades for the
last 1, 2 and 3 years
 Distribution of rating
migrations for the last 1, 2 and
3 years
 In the advanced approach,
distribution of rating migrations
weighted with (a) nominal
exposure and (b) EAD, both
after 1,2 and 3 years.
Basel II reporting process
Reporting to the
market
Group level information
consolidation
Disparate Business
units (legal entities)
Investors
Regulators
Analysts
Rating
Agencies
…
Basel II impact on internal reporting
Reporting to the
market
Investors
Regulators
Rating
Agencies
Analysts
Group level information
consolidation
XBRL
XBRL
XBRL
Disparate Business
units (legal entities)
XBRL
…
Improving the quality and timeliness of
internal reporting using XBRL
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
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

The Goal
The Obstacles
What XBRL Offers
Why XBRL Now
Next Steps
Representative XBRL-enabled products
 Shipping
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SAP mySAP financials
Microsoft Business Solutions Axtapa
Oracle FSG
Creative Solutions (et al.)
 Announced
 Microsoft Office 2003 Add-in
 Hyperion Financials
 PeopleSoft Enterprise Financial Management
 Custom
 CaseWare Financials
 Hitachi GEMPlanet
Live applications
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APRA (2001)
EDGAR Online (2001)
DATEV/Bundesbank (3Q 2002)
Wacoal (4Q 2002) – Internal Reporting
OneSource (1Q 2003)
Tokyo Stock Exchange (1Q 2003)
Sumitomo Mitsui Banking Corp. (1Q 2003)
Danish Commerce & Companies (2Q 2003)
Dutch Water Authority (3Q 2003) – Internal Reporting
UK Inland Revenue (4Q 2003)
KOSDAQ – Korea (4Q 2003)
National Tax Agency of Japan (1Q 2004)
US FDIC (3Q 2004)
 Morgan Stanley, Reuters, Microsoft
 NASDAQ-MSFT-PricewaterhouseCoopers Pilot
Improving the quality and timeliness of
internal reporting using XBRL





The Goal
The Obstacles
What XBRL Offers
Why XBRL Now
Next Steps
Putting a dollar value on straight-through
reporting with XBRL: Sample case
 Committee report – known as-is
 226 person-hours
 2 ½ elapsed weeks
 Committee report – estimated to-be
 Automating extraction and aggregation, eliminate rework
 32 person-hours
 Less than 1 week
 200 person-hours times # of committee reports
 $_, _ _ _, _ _ _ ?
Improving the quality and timeliness of
internal reporting using XBRL
 The Goal
 Consistent, uniform data information produced efficiently
 The Obstacles
 Inconsistent information models; 80-20 rule of business reporting
 What XBRL Offers
 A standardized reporting XML vocabulary that can be deployed at all
levels of an organization to accelerate process improvements
 Why XBRL Now
 XBRL contrasted with coding directly in XML
 XBRL software in the marketplace and adoption
 Next Steps
 Examine your hidden costs of inefficient internal reporting
What you will learn in this session
 XBRL-enabled reporting – Tools
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Cuthbertson - CaseWare
Furusho - Fujitsu
Hoffman - UBmatrix
Mueller - Corel
Wallis – Hyperion Solutions
Zwiebach - Oracle
 Technical directions for XBRL International - Technologies
 Cohen - PricewaterhouseCoopers
 vun Kannon - KPMG
 Live applications – Solutions
 Sambuichi - Hitachi
 Snijders - Semansys
 Are XBRL and your organization ready for each other?
 Pryde – KPMG; Panel with E&Y and Microsoft
Improving the quality and
timeliness of internal reports
Walter Hamscher (walter@hamscher.com)
Chair, XBRL International Steering Committee
Consultant to PricewaterhouseCoopers