eXtensible Business Reporting Language - Edelweiss

XBRL
eXtensible Business
Reporting Language
The Future of Financial Reporting
February 3, 2011
Ram Iyer

Contents
1
XBRL- Background
2
Advantages of XBRL
3
How KPMG can help
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
1
1

1.
XBRL- Background
2

What is XBRL
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
•3

Analysing Data – The Old Way
ABC Ltd
Financial Statements
XYZ Ltd
Financial Statements
.doc / .xls /
.ppt / html/pdf
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
4

Analysing Data – The XBRL Way!
User’s Software
ABC
Financial Statements
XBRL file
XYZ
Financial Statements
.doc / .xls /
.ppt / html/pdf
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
5

Introduction to XBRL (eXtensible Business Reporting Language)
• Bar code
• Computer language
• Member of XML language family
• Extensible
• Enables reading of documents
• Innovation
• Tagging
• Taxonomies
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
6

How it Works (1)
7
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.

How it Works (2)
8
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.

How it Works (3)
9
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.

How it Works (4)
10
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.

How XBRL Helps
• Compiling, storing, using data
• Can change language labels
• Transferring data (apps, locations)
• Computer, mobile, blackberry, tablet
• Financial data
• Non-financial data
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
11

Potential Uses (Examples)
Supplier Data
Regulatory Filings
Forms
Customer Data
Financial Statements
Project Info
Employee Data
MIS / Budgets
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
12

The Mechanics
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
13

What the Preparer Needs
1.
Taxonomy
Extension Taxonomy /
Coding expertise 2.
3.
Engine / Tool
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
14

Example of Taxonomy – Plain English
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
15

Example of Taxonomy - xml
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
16

History of XBRL
1
No fee for using
2
Developed and maintained by not-for-profit organization called XBRL
International
3
Created in 1999 with funding from AICPA
4
Hundreds of members like accounting firms, businesses, regulators,
accounting standard setters
5
Recognizes “jurisdictions”
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
17

Global Scene
• Several countries have already mandated XBRL-based filing of financial statements.
• In Israel, all public companies are mandatorily required to do their filing using XBRL-based
interface called MAGNA.
• In Japan, beginning financial year 2008-09, approximately 5,000 companies and 3,000 investment
funds are compulsorily required to do their filings using XBRL-based EDINET system.
• USA has already mandated XBRL-based filing for its top 500 companies effective June 2009. By
the middle of 2012, all domestic and foreign companies that are publicly traded in the United
States are required to provide their SEC filings using the XBRL format beginning with simple
block tagging but progressing to more complex detail tagging of financial information including
footnotes and schedules.
• Similarly, in China, Singapore, Germany, Italy, Korea, India, etc., XBRL filing is currently
mandatory for certain select companies.
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
18

Indian Scene
• XBRL India is a provisional jurisdiction of the XBRL International created by The Institute of
Chartered Accountants of India (ICAI) to spearhead the promotion and adoption of XBRL in India.
• Members of XBRL India include the premier organisations like Reserve Bank of India (RBI),
Securities and Exchange Board of India (SEBI), Ministry of Corporate Affairs (MCA), Bombay Stock
Exchange Limited (BSE), National Stock Exchange of India Limited (NSE), Insurance Regulatory
and Development Authority (IRDA).
• XBRL India (under ICAI leadership) has developed an Indian GAAP Taxonomy.
• Exposure draft of a banking taxonomy complying with Basel-II Reporting Requirements was also
published a few months back and, further, it has received acknowledged status from the XBRL
International.
• Taxonomy for non-banking financial companies is also in the offing.
• Optional filing notified by NSE.
• Certain RBI forms mandatory.
• Several organizations have adopted XBRL.
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
19

Regulatory development - India
SEBI
• Filing of specified information by listed companies through XBRL enabled technology viz. the
Corporate Filing and Dissemination System (CFDS)
Stock exchanges
• The BSE and NSE, have already adopted an XBRL-based reporting system under a unified
electronic platform popularly known as the ‘CorpFiling’ system.
• Currently, the top 100 companies in India are using ‘CorpFiling’ to submit their disclosures to the
two exchanges.
Ministry of Corporate Affairs
• Project MCA-21 using XBRL targets to create an information sharing platform with regulators and
ministries to provide an early warning system for the ministry.
• The MCA, has resolved to implement XBRL for all companies in India from 2011.
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
20

Preparing for XBRL
Roll-out
Convert to
XBRL
Inventory of
Data-Gathering/
Collation Activities
Getting the
best out of
XBRL
Standardize the
Information
Identify
XBRL
Opportunities
Plan the Project
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
•21

Further Information- useful websites for XBRL
Xbrl.us
Xbrl.org
Xbrl.org/in
Several other websites/books
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
22

2.
Advantages of XBRL
23

Advantages of XBRL
Key advantages of XBRL include:
• Transparent filing of financial statements;
• Universally-accepted data format;
• Efficient and timely transfer of data;
• Quick and easy analysis of financial data, both internally and across companies;
• Improved monitoring by regulators, viz. SEBI, RBI, MCA, Stock Exchanges, etc.;
• Easier detection of errors and inconsistencies;
• Significant cost reduction in data collection and data analyses;
• Increased accuracy of financial data;
• Improved performance measurement, cost accounting and decision making;
• Globalization of financial and business data;
• Global sharing of resources;
• Easier and more efficient financial analysis by auditors;
• Real time reporting and validation of data.
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
24

3.
How KPMG can help.
25

How KPMG can help-The Need
Some of the key challenges that the Corporates might encounter in its financial reporting process
are:
• Availability of adequate and appropriate skilled
resources to meet the financial reporting
deadlines specifically at period ends.
• Smooth and timely closure of reporting.
• Highly volatile and complex IFRS literature having
an impact on the taxonomies.
• Requirement of training the human resources to
keep pace with XBRL and its finer details.
• The software/tool to be used for the purpose of
tagging the financials.
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
26

Thank You
Ram Iyer
Director
Accounting Advisory Services
KPMG in India
Phone: +91 (22) 30901946
Email: rgiyer@kpmg.com
© 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International Cooperative ("KPMG International").