XBRL Awareness Seminar
Presented by the members of XBRL-US
13 Sept 2005, Chicago
Event and Webcast Hosted by PR Newswire
Agenda

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

Welcome
Overview of XBRL; the need for standards (what)
Benefits of XBRL (why)
Overview of the SEC VFP; preparation case
study
 Technical overview (how)
 Wrapup and Q&A
XBRL Overview
What’s the Problem?
 Business reporting information producers,
processors, and consumers all looking for
increased efficiency
 Increasing costs of manual processing
 Increasing demands for additional processing (e.g.
Sarbanes-Oxley requires SEC to do more checking)
 Analysts need to track more firms, look at more
information for each firm
 Manual processing (i.e. rekeying) prone to errors
 Reuse, repurposing of information expensive
Why Change Business Reporting?
Data Preparer Pressures:
 Users/consumers are demanding more complete,
timely data
 Data is more complex
 Required to report more often, more quickly
 Need to decrease costs
Data User/Consumer Pressures:
 Greater transparency and detail
 Easier to process and make decisions
 Act more quickly
 Need to decrease costs
2
Consolidated Profit and Loss Account
for the year ended December 31, 2004
Blah
blah
blah
Blah blah
blah
blah
Blah
blah
blah
Blah blah blah
blah
blah
Profit
925
448
Blah
blah
blah
Earnings per share
3.6
11.0
Time to move into the 21st Century
 The Star Trek test: how should it work?
Can Automation Help?

Yes, but automation requires
1. Intelligent financial data
2. An agreement on how to describe the information, i.e.
a Standard
1. Intelligent Data
 Data that knows about itself; self-describing
 HTML/PDF are electronic, but not intelligent
 Simply an electronic version of a paper document; not
much better than a fax
 “The problem with WYSIWYG is that’s all you get”
 PDF not any better than an OCR’d printed report; data
still needs to be manually rekeyed and analyzed
 Example: FDA is moving away from PDF and towards
XML for pharmaceutical approval applications
You Can Probably Figure This Out
 In the following example, what does “1211”
represent?
XBRL International
1211 Avenue of the Americas
19th floor
New York, NY 10036
www.xbrl.org
 Easy for humans because context defines the
semantics of the content – but more difficult for
machines
But What’s This?
37
HTML Doesn’t Help…
<b>37</b>
…but XBRL Does
<OperatingProfit decimals="6"
unitRef="USD">37</OperatingProfit>
XBRL and XML
 XBRL is an application of XML, a means of
describing financial information using XML syntax
 Intelligent data that can be




Reused
Repurposed
Exchanged/submitted
Machine processed
XBRL the Next Big Thing
 Gartner lists XBRL as one of four “Next
Generation Architectures” together with Service
Oriented Architecture, Web Services Enabled
Business Models, and Business Process
Platforms
“Next Generation Architecture will constitute the third big
era in the IT industry’s history (the first having been the
hardware era and the second belonging to software).”
(23 Aug 2005)
2. Need for Standards
 For intelligent information exchange to work we
need agreed-upon ways to describe the
information
 Examples of standards




Electrical plugs and sockets
Traffic laws
Fax machines
Railroad gauges
The Railroad Example
Business Reporting Supply Chain
Processes
Business
Operations
XBRL
Internal
Financial
Reporting
External
Financial
Reporting
XBRL
XBRL
Financial
Publishers
and Data
Aggregators
Companies
Participants
Trading
Partners
Investment,
Lending, and
Regulation
Management
Accountants
Auditors
Software Vendors
Regulators
Investors
Two Things Named “XBRL”
 XBRL is a technology used for financial reporting
 XBRL is a consortium formed to promote the
adoption of the technology
The XBRL Technology
 “tag” or “element”: the wrapper for each data point
 XBRL specification: defines XBRL taxonomies
and instances
 XBRL taxonomies: the set of elements (tags)
used to define your data
 XBRL instances: the file created using a
taxonomy, which contains financial information
that you create and deliver
The XBRL International Consortium
 A worldwide consortium of participants in the
business and financial information supply chain.
 Oversee the creation, development, submission
and maintenance of the XBRL specification and
related taxonomies for business & financial
reporting data
The XBRL-US Jurisdiction
 “The mission of XBRL-US is to make XBRL the
de facto standard for all internal and external
business reporting for U.S. organizations”
XBRL US Member Companies
Adobe Systems
AICPA
AIG
Allocation Solutions
BDO Seidman
Booz Allen Hamilton
Bowne & Co.
Business Objects
Business Wire
Capital Printing Systems
Capricorn Research
CCH Tax and Accounting
Cognos
Creative Solutions
Deloitte & Touche
Dynamic Access System
EDGAR Filings
EDGAR Online
Ernst & Young
FactSet Research Systems
FDIC
Financial Executives International
Forum Systems
Fujitsu
GCom2 Solutions
Grant Thornton
Hitachi America
Innodata Isogen
Institute of Management Accountants
Ipedo
KPMG
Merrill
Microsoft
Morgan Stanley
PR Newswire
PricewaterhouseCoopers
PTC
RIA Compliance/Thomson
Rivet Software
RR Donnelley
R.S. Rosenbaum
SAS Institute
SavaNet
SimpleX Data Technologies
Standard Advantage
UBMatrix
Xaware
Benefits of XBRL
Michelle Savage
Vice President, Investor Relations Services, PR Newswire
Vice-Chair, XBRL-US Steering Committee
Chair, XBRL-US Adoption Working Group
External Reporting
 Can help facilitate the comparability and granularity of
financial disclosure
 Can help make the analysis timely and transparent
 Can help simplify some aspects of the analysis of complex
financial reporting
Source: Morgan Stanley Research; company reports
XBRL: A major
advance in financial
reporting
 HTML, PDF,Word, ASCII Text
renditions of reports only
exploit the ease of distribution
and visual presentation that
the Internet offers
 In practice they are of little
value to a computer
 XBRL will allow accurate,
relevant, scalable querying of
financial information
Sources of information for analysts
Fundamental Analysis and Consistency
Analysts
Company B
Company A
Regulatory Filings
ISP
10K Wizard
XBRL
EdgarPro
Integrated
Models
•Multiperiod
estimates
•Risk profiles
•Management
assessments
…
Management
Reports
Earnings
Announcement
News
Releases
XBRL
Internet Data Purveyors
Investors
Use Case: Updating Financial Models
Quick Comments
 Immediate response to
earnings releases
 Time pressure restricts the
level of analysis
Detailed Analyses
 More detailed analysis of
filings
 Routine reports should be
easier to complete
Source: Morgan Stanley Research
Workflow: Updating Financial Models
Current Workflow
 Report published over the
wire services in ASCII Text
and possibly to the
company web site in HTML
or PDF format
 Analyst manually
transcribes numbers into
spreadsheet model and…
 …analyses results quickly
in order to get a comment
out
Process with XBRL
 Report published in XBRL
format
 Numbers automatically
loaded into spreadsheet by
an Excel add-in
 Analyst has more time to
analyse results with
confidence
Use Case: Analyzing Footnotes
 GAAP disclosure of assumptions in footnotes
 Stock options
 Operating leases
 Pensions
 Content within footnotes tagged
 Companies can choose to tag to this level of
detail
 Improves the clarity of information
Use Case: Comparing Financial
Information
Very detailed comparisons
 In-depth analysis of specific
areas of company financials
 Frequency of reports limited
by time to collate
Very broad thematic reports
 Key report for investors on
market-wide issues
 Number of companies
included restricted by time
Source: Morgan Stanley Research
Workflow: Comparing Financial
Information
Current Workflow
 Comparable data are
sourced from
Process with XBRL
 Query submitted to XBRL
data aggregator
 Aggregate databases
 Results returned effectively
 Separate company financials
immediately
 Data must be checked to
ensure it is complete and  More time to analyze more
comparable
companies
 More time is spent on
collation and verification
than on analysis
Why XBRL will improve financial analysis
 Accuracy
 Greater confidence in numbers used for analysis
 Reliable results in higher quality conclusions
 Timeliness
 More time to focus on analysis, not process
 Shorter “time to market”
 More frequent high-quality analysis
Results
 XBRL will improve the relevance
and quality of financial analysis
Stocks with higher corporate
governance standards have
outperformed
180
 Companies should look at XBRL
as a way to improve
communication with their
stakeholders
GMI “Top 26”
160
140
S&P 500
120
100
 Greater transparency results in
a lower cost of capital
80
1999
2000
2001
2002
2003
2004
Source: Governance Metrics International
Internal Reporting
Payroll
Customers
Partners
Billing
A/R
Vendors
Partners
General
General
Ledger
Ledger
A/P
Lenders
Investors
Regulators
Analysts
Auditors
Attorneys
(Excel, html,
ascii text, etc.)
Internal Reporting
XBRL GL
 Handles all business and financial information
within an organization
 Data is created independent of reporting
 System is independent
 Allows for consolidation
Conclusion
XBRL will improve the flow of information in the
corporate reporting supply chain.
Results on Wall Street:
 Better, more transparent financials
 Increase in sell side coverage
 Buy side can analyze more companies
 Increase in liquidity in the capital markets
SEC VFP overview; case study
 Ruth Kaufman, International EDGAR Manager,
RR Donnelley
SEC Voluntary Filing Program –
SEC’s Interest in Assessing XBRL
 SEC’s Mission:
 Protect investors and maintain the integrity of the securities
markets
 Potential Impact of Tagged Data and XBRL
 Internal  Screening / Risk Assessment
 Financial statement reviews
 External  Streamlined and more effective communication of company
results
 Better and faster investor access to financial information
 Improved analysis for investors
SEC Voluntary Filing Program –
Final SEC Rules
• Amendments to Regulation S-T establish
voluntary program
• EDGAR Filer Manual updated for XBRL upgrade
to EDGAR system
• Voluntary Filing Program commenced
April 4, 2005
• Volunteers may furnish supplemental financial
information using XBRL
• Official HTML or TEXT filings still required
SEC Voluntary Filing Program –
Form of Submissions
XBRL documents are furnished as Exhibit 100 to:
• Exchange Act periodic reports
• Exchange Act Reports on Forms 8-K or 6-K
• Investment Company Act filings
XBRL documents are disseminated on EDGAR
SEC Voluntary Filing Program –
Registrants Have Flexibility
The VFP program does not:
 Limit participation by size, specific industry, or type of
registrant.
 Impose any filing deadlines:
 Furnish no earlier than the related Exchange Act filing
 Impose a minimum level of tagging beyond financials (i.e.,
volunteers have flexibility in determining the nature and extent
of tagging).
 Require volunteers to certify the XBRL-related documents.
 Require auditors to attest to the financial information included
in the XBRL-related documents.
 Require participation for a set period of time (free to start or
stop any time).
The Program has established appropriate liability protections for
volunteers and allows participants to resubmit XBRL-Related
Documents, if deemed necessary.
SEC Voluntary Filing Program –
Description of XBRL Data
Volunteers must provide disclosures about the XBRL
documents:
 Use cautionary language
Users of this data are advised pursuant to Rule 401 of Regulation S-T that the information contained in the XBRL
documents is unaudited and these are not the official publicly filed financial statements of ABC Corporation. The purpose
of submitting these XBRL formatted documents is to test the related format and technology and, as a result, investors
should continue to rely on the official filed version of the furnished documents and not rely on this information in making
investment decisions.
In accordance with Rule 402 of Regulation S-T, the information in this Current Report on Form 8-K, including Exhibit
100, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into
any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act,
except as shall be expressly set forth by specific reference in such filing.
 Describe as “unaudited” or “unreviewed”
 Forms 8-K and 6-K must reference the official filing to
which the data relates
SEC Voluntary Filing Program –
Content of XBRL Documents
Mandatory Content:
• Complete set of financial statements, however:
• Notes to financial statements may be omitted,
• Schedules may be omitted, but IM companies must
include Schedule I – Schedule of Investments
or
• Earnings information in a Form 8-K or 6-K
or
• Financial highlights or condensed financial
information for IM companies
SEC Voluntary Filing Program –
Content of XBRL Documents
Optional Content:
• Audit opinion
• Interim review reports
• Reports of management on the financial
statements
• Certifications
• MD&A (or MDFP for IM companies)
Case Study - Motivations to Participate in
SEC Voluntary Filing Program


Better Understand and Evaluate XBRL
Improve Usability of Reports for Stakeholders:
Investors, Lenders, Regulators


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Enhanced analytical capabilities
 Performance versus other companies
 Performance versus multiple prior periods
Lower cost of consuming information
Faster access to information which allows for more timely
decision making
Enhanced functionality
Prepare to Comply with Potential Future Mandates to
use XBRL in Filings
Improve Internal Efficiency of Financial Reporting

Decrease costs, time and effort
Case Study Considerations
 What applications do you currently use to
create compliance documents?
 What do you use for GL?
 How do you connect them?
 Re-keying introduces errors
Case Study - Approach
 Dual roles: reporting entity and filing agent
 Created cross-functional team (Finance,
Marketing, Operations, IT, IR, etc.)
 Educate, educate, educate
 Decide on initial approach and obtain Executive
buy-in
Case Study – Business Decisions
WHO?
 Identify Project Leader
 Determine team members
 Assess level of internal and external expertise needed
WHAT?
 Should we file our own XBRL?
 Which document should we choose?
 How deep should we tag (F/S, MD&A)?
 Should a rendering/viewing be created to proof XBRL?
 Internal sign-off?
 Legal for 8-K / Finance for XBRL
 Additional steps after SEC submission (website, IR
activities, internal awareness)?
Case Study – Business Decisions
WHEN?
 Start with 12/31/04 year-end information or 2005
quarterly information
 Expected Frequency: once or periodically?
HOW?
 At which data point should information be tagged in
XBRL (e.g., ERP, G/L, Word document)?
 Select core taxonomy to be used
 Which software should be utilized?
 Which processes should be followed in order to create,
review, validate, submit and post the Instance
Document and Taxonomy Extension?
Case Study - Process
 Following official filing, map line items to existing
tags and flag items to go in extension taxonomy
 New items are created and presentation and
calculation linkbases set up
 Create contexts, units
 Populate data
 XBRL level validation
 SEC level validation
 Render and proof
 Test, test, test…. and then test again
 File
Case Study Observations
 The first time a company places their financials in
XBRL requires a significant time commitment.
The company will have to map tags to each data
point on their financials.
 Subsequent forays take significantly less time
since the tags have been previously established.
 XBRL is code that a computer understands – it
will not make sense to a human eye.
Case Study – XBRL: Machine Readable
Case Study – XBRL – Business Reporting
Equivalent of the Barcode
Efficiency
Savings
Quality
Feel free to ask SEC Staff about the
Voluntary Filing Program
 Jeff Naumann naumannj@sec.gov, Brigitte Lippmann or any of the
other names listed on the final rule release
(www.sec.gov/rules/final/33-8529.htm)
 General inquiries: xbrlprogram@sec.gov
Other Resources
 www.XBRL.org
 Accounting professionals
 Filing agents
 Software vendors
XBRL Technical Overview
 Wayne Harding, VP Business Development, Rivet
Software
Think about…
Information that is easier to use will be
used more!
How?
Provide structure to the information!
Also think about…
Gorn
Tribbles
Road Blocks
 Costs – the “ROI”





Learning curve
Application purchase
Labor hours
“No time”
Sometimes payback is hard to quantify
Why the SEC needs help…
see also: sec.gov/spotlight/xbrl.htm
700000
600000
500000
400000
# of Filings
Avg size
300000
200000
100000
0
2000
2001
2002
Source: EDGAR On-line
2003
2004
2005*
* = filings annualized based on 6 months
Think of a spreadsheet…
200,000
Think of a spreadsheet…
$ 200,000
Think of a spreadsheet…
Revenue
$ 200,000
Think of a spreadsheet…
Year ending 2004
Revenue
$ 200,000
Think of a spreadsheet…
Year ending 2004
Revenue
$ 200,000
The Result:
<period>20041231,duration=12mos</period>
<revenue> USD,200000</revenue>
Financial
Statements
Consumers of
Financial
Statements
Apply XBRL Core
Schema
Apply “Taxonomy”
Financial
Statements
Extend “Taxonomy”
(if needed)
Instance Document
Creation
Consumers of
Financial
Statements
Web Site (formatted
via a “style sheet”)
Analytics (e.g., Edgar
On-Line iMetrics)
New Releases
Via PR Newswire
Regulatory Filings
To Create an XBRL Document
(“Instance Document”)
 Native within your existing application(s)





Oracle
SAP
SAS
Hyperion
Audit Software: ACL, Caseware
 Part of a suite – MBS and FRx
 Third party tools
 Hitachi
 Fujitsu
 Rivet
To Create an XBRL Document with Rivet





Use Excel™ and Word™
Establish the Entity
“Tag” the data
Validate the data
Export into an instance document
Establish the Entity
“Tag” the data
Validate the data – Part One - Viewer
Validate the data – Part II
Export into an Instance Document
Think about…
Information that is easier to use will be
used more!
How?
Provide structure to the information!
SEC VFP Filers
Wrapup
Summary of Presentations




XBRL Overview
Benefits of XBRL
SEC Voluntary Program; Case Study
Technical Overview
Available Resources
 FAQs, tutorials, case studies, list of available
tools, specifications, presentations, etc.
 www.XBRL.org
 www.XBRL.org/US
 Public discussion email list
 http://finance.groups.yahoo.com/group/xbrl-public/join
 Unofficial websites
 http://www.xbrlspy.org/
 http://xml.coverpages.org/xbrl.html
 http://bryant2.bryant.edu/~xbrl/
Call to Action: XBRL-US Membership
 Organizational or Individual/Academic
memberships
 Includes membership in International consortium
 Benefits of membership:
 Participation in creation of specifications; set direction
of specs, make sure they meet your needs
 Early access to specifications; first to market
 Networking with XBRL experts
 Exposure as supporter of XBRL
 For more information see www.XBRL.org/US/join
Call to Action: Participate in SEC VFP
 Markup your financials in XBRL
 Submit to SEC
Q&A