eXtensible Business Reporting Language (XBRL) - an Update - IFAC
eXtensible Business Reporting Language (XBRL) - an Update - IFAC eXtensible Business Reporting Language (XBRL) - an Update - IFAC
eXtensible Business Reporting Language (XBRL) - an Update November 9, 2010 Mike Willis Partner, PricewaterhouseCoopers LLP Chairman, XBRL International Mike.willis@us.pwc.com 001 813 340 0932
- Page 2 and 3: Compliance Processes Implications C
- Page 4 and 5: Built-in = More automated reporting
- Page 6 and 7: Communication Processes Transparenc
- Page 8 and 9: What is XBRL Freely available Suppl
- Page 10 and 11: Financial Statement Disclosures Exa
- Page 12 and 13: Examples of Noise, Omissions, Error
- Page 14 and 15: Dell 10-K vs. Yahoo (Assets)
- Page 16 and 17: Dell 10-K vs. Google (Liabilities)
- Page 18 and 19: Dell 10-K vs. Google (Cash Flows)
- Page 20 and 21: MSFT 10-K vs. MSN 10-K (Income Stat
- Page 22 and 23: MSFT 10-K vs. MSN 10-K (Income Stat
- Page 24 and 25: MSFT 10-K vs. MSN 10-K (Liab & Equi
- Page 26 and 27: Caterpillar 10-Q vs. Google (Assets
- Page 28 and 29: Caterpillar 10-Q vs. Google (Income
- Page 30 and 31: Examples of Social Analytics Curren
- Page 32 and 33: Fujitsu - "How XBRL Transformed Fuj
- Page 34 and 35: The Problem at Wacoal…
- Page 36 and 37: The ROI at Wacoal XBRL GL used to s
- Page 38 and 39: Resources • XBRL International ht
<strong>eXtensible</strong> <strong>Business</strong> <strong>Reporting</strong><br />
<strong>L<strong>an</strong>guage</strong> (<strong>XBRL</strong>) - <strong>an</strong> <strong>Update</strong><br />
November 9, 2010<br />
Mike Willis<br />
Partner, PricewaterhouseCoopers LLP<br />
Chairm<strong>an</strong>, <strong>XBRL</strong> International<br />
Mike.willis@us.pwc.com<br />
001 813 340 0932
Compli<strong>an</strong>ce Processes Implications<br />
Common Implementation Scenarios<br />
- Out-source<br />
- Bolt-on<br />
- Built-in<br />
- Embed<br />
Common Preparer Processes<br />
- M<strong>an</strong>ual access<br />
- M<strong>an</strong>ual assembly<br />
- Linear / distributed review<br />
- M<strong>an</strong>ual / reactive <strong>an</strong>alytics<br />
- Enterprise (only) view
5<br />
C<br />
u<br />
← Largely unaffected | Largely Affected →<br />
r<br />
4<br />
r<br />
Supplemental Data<br />
e<br />
n<br />
t<br />
ERP<br />
1 2<br />
ERP<br />
ERP<br />
Consolidation<br />
1. Linear Document Review<br />
2. Distributed Document Review<br />
3. M<strong>an</strong>ual Assembly via<br />
two processes<br />
4. M<strong>an</strong>ual Spreadsheet Aggregation<br />
5. M<strong>an</strong>ual Queries of sub-ledgers<br />
s<br />
a<br />
m<br />
p<br />
l<br />
e<br />
Review <strong>an</strong>d Check<br />
r<br />
e<br />
p<br />
o<br />
3<br />
10-Q in Word<br />
10-Q in HTML<br />
Review <strong>an</strong>d Check<br />
10-Q in <strong>XBRL</strong> Regulator<br />
Outsourced <strong>an</strong>d Bolt-on approaches
Built-in = More automated reporting assembly <strong>an</strong>d review<br />
5<br />
ERP<br />
ERP<br />
Consolidation<br />
3<br />
Report<br />
Writer<br />
1 2<br />
10-Q in <strong>XBRL</strong>,<br />
Word, PDF<br />
ERP<br />
1. Contextual Review<br />
2. Collaborative Review<br />
3. Automated Assembly via a<br />
single process<br />
4. Automated Aggregation<br />
5. Automated Queries of subledgers<br />
Supplemental Data<br />
4<br />
Regulator
Benefits of Built-in Adoption Include:<br />
Effectiveness <strong>an</strong>d efficiency in the last mile of report assembly <strong>an</strong>d review<br />
processes via reduction of m<strong>an</strong>ual effort through automation<br />
• Assembly process - from m<strong>an</strong>ual to automated; from centralized to<br />
decentralized<br />
• Review process - from linear to contextual; from distributed to<br />
collaborative<br />
• Controls - from m<strong>an</strong>ual to streamlined/automated<br />
• Enh<strong>an</strong>ced ability to benchmark, <strong>an</strong>alyze <strong>an</strong>d access data<br />
• Streamlined Reports (not just <strong>an</strong>nual / quarterly regulatory reports)<br />
- Board of Directors Package / Audit Committee Package<br />
- Press Releases, Quarterly Statistical Summary, Proxy<br />
- Signific<strong>an</strong>t Accounting Issues Memo, Emerging<br />
Accounting Issues, Rep Letters<br />
- Others
Communication Processes<br />
Tr<strong>an</strong>sparency "New Math" (= Available) + (Accessible + Reusable)<br />
Traditional proprietary <strong>an</strong>d unstructured formats (PDF, html, Word, Excel,<br />
asci, etc.)<br />
Where do <strong>an</strong>alysts currently obtain the data that populates their <strong>an</strong>alytical<br />
models?<br />
Are these third party data aggregator sources:<br />
Accurate? (20% to 25% error rate)<br />
Complete? (80% to 90% omission rate)<br />
Timely? (24 to 72 hour delay)<br />
St<strong>an</strong>dardized comp<strong>an</strong>y disclosures provides direct, accurate, complete <strong>an</strong>d<br />
timely communication<br />
Broadcasting via RSS versus website posting<br />
Who is using <strong>XBRL</strong>? (Regulators, <strong>an</strong>alysts, auditors, investors, etc.)<br />
Social Analytics<br />
Is tr<strong>an</strong>sparency a two way street?
Internal M<strong>an</strong>agement Processes<br />
Traditional proprietary software applications have common attributes:<br />
Physical integration,<br />
Technical <strong>an</strong>d/or m<strong>an</strong>ual queries,<br />
Embedded intellectual property<br />
These attributes enable / create costly mainten<strong>an</strong>ce, rigid / siloed processes,<br />
inherent opacity,<br />
St<strong>an</strong>dardizing proprietary systems <strong>an</strong>d abstracting select intellectual property<br />
Enh<strong>an</strong>ces internal tr<strong>an</strong>sparency<br />
Lowers systems mainten<strong>an</strong>ce costs (eliminates the N 2 mapping problem)<br />
Enh<strong>an</strong>ces access <strong>an</strong>d reuse of data, business rules, presentation <strong>an</strong>d<br />
relationships<br />
Improves overall business process agility<br />
Comp<strong>an</strong>y examples (60% cost reductions; 80% time reductions, control <strong>an</strong>d<br />
agility enh<strong>an</strong>cements)
What is <strong>XBRL</strong><br />
Freely available Supply Chain St<strong>an</strong>dard for <strong>Business</strong> Information Processes<br />
International Open Market Consortia with collaboration of over 650<br />
org<strong>an</strong>izations from 30 countries<br />
Enables st<strong>an</strong>dardization of:<br />
• Information elements (enables information exch<strong>an</strong>ge across disparate software)<br />
• Information definitions (enables sem<strong>an</strong>tic agreement, access <strong>an</strong>d reuse)<br />
• Labelling (enables association of multiple l<strong>an</strong>guages to individual elements<br />
across software)<br />
• Presentation concepts (enables presentation abstraction / templates)<br />
• Formulas / business rules (enables reusable <strong>an</strong>alytical models <strong>an</strong>d social<br />
collaboration)<br />
• Relationships between information elements <strong>an</strong>d other resources (enables<br />
explicit <strong>an</strong>d executable relationships)<br />
These st<strong>an</strong>dardization concepts are process centric <strong>an</strong>d move beyond the<br />
idea of a fixed data template<br />
Worldwide adoption summary
Appendix<br />
Communication Distortion examples (Dell, Microsoft, Catapillar)<br />
Examples of Social Analytics<br />
M<strong>an</strong>agement <strong>Reporting</strong> case study examples (Fujitsu, Wacoal)<br />
Where to find more resources
Fin<strong>an</strong>cial Statement Disclosures<br />
Examples of third party parsing distortions of comp<strong>an</strong>y<br />
disclosures.<br />
What are investors looking for?<br />
• Comp<strong>an</strong>y disclosures that are:<br />
-Complete<br />
-Accurate<br />
-Timely<br />
-Relev<strong>an</strong>t<br />
-Insightful<br />
-Reusable
Unfortunately…..Noise, Omissions, Errors <strong>an</strong>d other<br />
communication problems<br />
• Comp<strong>an</strong>ies Publish content: earnings releases, quarterly <strong>an</strong>d <strong>an</strong>nual<br />
reports, etc.<br />
• Third party intermediaries:<br />
– Parse comp<strong>an</strong>y documents in 24 to 72 hours<br />
– Structure comp<strong>an</strong>y information using proprietary taxonomies<br />
– Sell comp<strong>an</strong>y information to comp<strong>an</strong>y constituents<br />
• Third party parsing processes:<br />
– Reclassify comp<strong>an</strong>y disclosure concepts<br />
– Omit key comp<strong>an</strong>y specific unique disclosures<br />
– Ch<strong>an</strong>ge comp<strong>an</strong>y disclosure concepts<br />
• Comp<strong>an</strong>y m<strong>an</strong>agement receives inquiries that don't make <strong>an</strong>y sense<br />
• Worse yet, comp<strong>an</strong>y constituents rely upon the inaccurate disclosures <strong>an</strong>d<br />
m<strong>an</strong>agement doesn’t get inquiries that would allow for correction
Examples of Noise, Omissions, Errors<br />
• Three comp<strong>an</strong>y disclosure examples provide useful evidence as<br />
to a potential value proposition for enh<strong>an</strong>cing how comp<strong>an</strong>y<br />
reported disclosures are made more reusable by investors <strong>an</strong>d<br />
<strong>an</strong>alysts.<br />
• M<strong>an</strong>y corporate fin<strong>an</strong>cial executives presume that what they<br />
report is what is being used by their constituents <strong>an</strong>d are simply<br />
not aware of these third party processes that distort their reported<br />
disclosures.<br />
• As evidenced in the following slides, even the most basic<br />
disclosures from the bal<strong>an</strong>ce sheet, income statement <strong>an</strong>d<br />
statement of cash flows are routinely omitted, ch<strong>an</strong>ged,<br />
normalized or adjusted.<br />
• The usefulness of the comp<strong>an</strong>y disclosures c<strong>an</strong> be enh<strong>an</strong>ced<br />
through a more direct communication between the comp<strong>an</strong>y <strong>an</strong>d<br />
its constituents that eliminates comp<strong>an</strong>y specific intermediary<br />
distortions through comp<strong>an</strong>y mapping to publicly available<br />
reporting taxonomies.
Examples of Noise, Omissions, Errors<br />
Following are specific examples for 3 comp<strong>an</strong>ies:<br />
•Dell vs Yahoo! <strong>an</strong>d Google<br />
•Microsoft vs MSN Money<br />
•Caterpillar vs Yahoo! <strong>an</strong>d Google<br />
•<br />
• The colors of the various boxes do not have a consistent<br />
me<strong>an</strong>ing; rather are intended to highlight the ch<strong>an</strong>ges to,<br />
tr<strong>an</strong>slation of, <strong>an</strong>d omissions of comp<strong>an</strong>y reported disclosures by<br />
the third party aggregators. Typically, the comp<strong>an</strong>y report is on<br />
the left h<strong>an</strong>d side of the slide <strong>an</strong>d the third party data on the right.<br />
• The Search engine sources are used for comparison purposes<br />
as they are publicly available sources of the underlying third party<br />
aggregator data. The distortions evidenced in the following slides<br />
are very common. These are not isolated incidents.
Dell 10-K vs. Yahoo (Assets)
Dell 10-K vs. Yahoo (Liabilities)
Dell 10-K vs. Google (Liabilities)
Dell 10-K vs. Yahoo (Cash Flows)
Dell 10-K vs. Google (Cash Flows)
Dell 10-K vs. Google (Income)
MSFT 10-K vs. MSN 10-K (Income Statement)
MSFT 10-K vs. MSN 10-K (Cash Flows)
MSFT 10-K vs. MSN 10-K (Income Statement)
MSFT 10-K vs. MSN 10-K (Assets)
MSFT 10-K vs. MSN 10-K (Liab & Equity)
Caterpillar 10-Q vs. Yahoo (Assets)
Caterpillar 10-Q vs. Google (Assets)
Caterpillar 10-Q vs. Yahoo (Income Statement)
Caterpillar 10-Q vs. Google (Income Statement)
Examples of Social Analytics<br />
Social <strong>an</strong>alytics - St<strong>an</strong>dards enable collaborative development <strong>an</strong>d<br />
mainten<strong>an</strong>ce of formulas <strong>an</strong>d models among authorized individuals.<br />
PricewaterhouseCoopers iDP
Examples of Social Analytics<br />
Current Processes<br />
Reinvestment to replicate system<br />
controls <strong>an</strong>d reporting with each<br />
system ch<strong>an</strong>ge<br />
M<strong>an</strong>ual processes to work around<br />
inflexible physical structures<br />
Lack of tr<strong>an</strong>sparency of information in<br />
reporting<br />
Poor data quality adversely impacts<br />
decision making<br />
Inflexible source driven reporting<br />
High cost of obtaining <strong>an</strong>d using<br />
internal/external benchmarking content<br />
Physically integrated BI/CPM systems<br />
tracking lagging indicators<br />
Enh<strong>an</strong>ced Processes<br />
Preservation of system controls <strong>an</strong>d<br />
reporting investment with each system<br />
ch<strong>an</strong>ge<br />
Automated processes enabling lower<br />
costs, improved quality & timeliness<br />
Enh<strong>an</strong>ced tr<strong>an</strong>sparency, access <strong>an</strong>d<br />
control of reporting information<br />
Data quality Improvements as<br />
validation rules are pushed to source<br />
Collaborative user driven reporting<br />
provides better access to more<br />
relev<strong>an</strong>t information<br />
Real time access to benchmarking<br />
content<br />
More effective BI/CPM environment<br />
tracking leading indicators
Case Study Implementation Examples<br />
Within the <strong>Business</strong> <strong>Reporting</strong> Supply Chain<br />
Wacoal<br />
UTC<br />
Fujitsu<br />
Processes<br />
<strong>Business</strong><br />
Operations<br />
Internal<br />
<strong>Business</strong><br />
<strong>Reporting</strong><br />
External<br />
<strong>Business</strong><br />
<strong>Reporting</strong><br />
Investment,<br />
Lending,<br />
Regulation<br />
Economic<br />
Policymaking<br />
Wacoal<br />
St<strong>an</strong>dardized Ledgers<br />
- Real time cash m<strong>an</strong>agement<br />
- Shortened month-end closing<br />
time by two days,<br />
- improved quality of m<strong>an</strong>agerial<br />
reporting.<br />
- Automated access of business<br />
unit ledgers & sub-ledgers<br />
- Post-merger system<br />
interoperability via st<strong>an</strong>dardized<br />
ledgers taking weeks<br />
Fujitsu<br />
St<strong>an</strong>dardized Ledgers<br />
- Improved internal tr<strong>an</strong>sparency<br />
- Enh<strong>an</strong>ced process agility<br />
- Reduced IT mainten<strong>an</strong>ce costs<br />
United Technologies<br />
<strong>XBRL</strong> enabled Report Writer<br />
Reduced cost/time of report<br />
assembly <strong>an</strong>d review by 25%
Fujitsu - "How <strong>XBRL</strong> Tr<strong>an</strong>sformed Fujitsu's IT<br />
Platform"
The ROI at Fujitsu<br />
<strong>XBRL</strong> GL used to provide a st<strong>an</strong>dardize layer of information <strong>an</strong>d business<br />
rules across some 150+ disparate internal systems<br />
Prior Processes<br />
M<strong>an</strong>ual access to trial bal<strong>an</strong>ce level<br />
data contained across disparate<br />
business unit systems<br />
Redund<strong>an</strong>t business rules within each<br />
of the disparate business unit systems<br />
Multiple data uses required additional<br />
input, excessive labor cost, poor data<br />
quality <strong>an</strong>d timing.<br />
Process Inflexibility via physical<br />
integration of disparate systems w/<br />
1269 interfaces<br />
Enh<strong>an</strong>ced Processes<br />
More detailed <strong>an</strong>d automated access<br />
to business unit ledger detail enabling<br />
better insights for better decisions<br />
Centralized m<strong>an</strong>agement <strong>an</strong>d control<br />
of information models <strong>an</strong>d business<br />
rules executed across disparate<br />
systems<br />
Reduction of indirect costs <strong>an</strong>d<br />
enh<strong>an</strong>cements in data quality <strong>an</strong>d<br />
availability of relev<strong>an</strong>t information<br />
Process Agility via st<strong>an</strong>dardized<br />
interoperability of disparate systems
The Problem at Wacoal…
…The Solution at Wacoal<br />
Case Study Paper available here<br />
Date 35
The ROI at Wacoal<br />
<strong>XBRL</strong> GL used to st<strong>an</strong>dardize the general ledgers <strong>an</strong>d sub-ledgers across 32<br />
subsidiary systems<br />
Prior Processes<br />
Opaque <strong>an</strong>d infrequent information for cash<br />
m<strong>an</strong>agement<br />
Delayed closing processes due to m<strong>an</strong>ual<br />
data exch<strong>an</strong>ges <strong>an</strong>d poor data quality.<br />
Multiple data uses required additional input,<br />
excessive labor cost, poor data quality <strong>an</strong>d<br />
timing.<br />
M<strong>an</strong>ual access of business unit ledgers &<br />
sub-ledgers<br />
Post-merger physical integration of<br />
acquired comp<strong>an</strong>ies systems taking<br />
months/years<br />
Reinvestment to replicate system controls<br />
with each system ch<strong>an</strong>ge<br />
Enh<strong>an</strong>ced Processes<br />
Real time cash m<strong>an</strong>agement<br />
Shortens month-end closing time by two<br />
days, <strong>an</strong>d improves the quality of<br />
m<strong>an</strong>agerial reporting.<br />
Reduction of indirect costs <strong>an</strong>d<br />
enh<strong>an</strong>cements in data quality <strong>an</strong>d<br />
availability of relev<strong>an</strong>t information<br />
Automated access of business unit ledgers<br />
& sub-ledgers<br />
Post-merger system interoperability via<br />
st<strong>an</strong>dardized ledgers taking weeks<br />
Preservation of system controls <strong>an</strong>d<br />
investment with each system ch<strong>an</strong>ge<br />
36
Resources<br />
for Internal Process implementations<br />
• <strong>XBRL</strong> Global Ledger Taxonomy<br />
• <strong>XBRL</strong> Global Ledger Training Materials<br />
• <strong>XBRL</strong> Global Ledger Use Cases<br />
• ERP Mapping Demo<br />
• ERP Access Demo<br />
• Altova MapForce Mapping Video
Resources<br />
• <strong>XBRL</strong> International http:www.xbrl.org<br />
• <strong>XBRL</strong> Mexico www.xbrl.org.mx<br />
• <strong>XBRL</strong> US http://www.xbrl.us<br />
• US SEC http://www.sec.gov<br />
<strong>XBRL</strong> Spotlight page<br />
• Getting Started with the <strong>XBRL</strong> Global Ledger http://www.iphix.net/resources/howto.htm<br />
• IFRS <strong>XBRL</strong> http://www.ifrs.org/<strong>XBRL</strong>/<strong>XBRL</strong>.htm<br />
• US GAAP <strong>XBRL</strong> http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176157088308
THANK YOU!<br />
November 9, 2010