1. ACG 5405 Introduction to XBRL

2. What is a Supply Chain?

3. Financial Reporting Supply Chain Source: http://www.bionicturtle.com/learn/article/extensible_business_reporting_language_xbrl_part_1_why_xbrl

4. Financial Reporting Supply Chain Who’s in the Supply Chain? –all stages of the preparation, approval, audit, analysis, and use of financial reports. –Participants in the financial reporting supply chain include: accountants working within organizations, company management, boards of directors, audit committees, outside auditors, standard setters, regulators, investment bankers, lawyers, credit rating agencies, investors, and others. The International Federation of Accountants Financial Reporting Supply Chain Survey Results:International Federation of Accountants Survey Results –Financial Reports have become less useful Complexity Burdens of Compliance –cause "the essence of the business" to be overlooked. –XBRL could be a useful tool to help them find and interpret financial reporting information,although there was a low level of understanding about how XBRL exactly works. –Regulators were the most positive respondents about the use of XBRL –auditors and users also considered that having information presented using XBRL would be useful.

5. XBRL A tool to create efficiency in the Financial Reporting Supply Chain But First......

6. Networks and Connectivity What is the primary problem with networking/connectivity? –Software applications that do not understand each other … therefore special interfaces must be designed & maintained, etc. –And humans have different understandings and views of data and information produced by the applications

7. Electronic Data Interchange (EDI) Computer-Computer Exchange of Data Business Data Direct processing Standardized –ANSI X12ANSI X12 US and Canada –EDIFACT International

8. EDI Components

9. Electronic Data Interchange Set EDI Service Bureau

10. XML in Business What if you need to move information from one business application to another within your organization? What if you have data in a number of different databases that you frequently need to integrate, compare, share internally? What if you need to share information with trading partners & others outside your organization? XML provides the necessary rules, syntax & structure to make it possible!

11. XML How can you appropriately structure information exchanges so that they can be seamless & efficient? –There are 2 parts to the solution: –1) Metadata – adding data about the data … data that gives the data more meaning Tags that give meaning to the Data –2) Agreement on structure of the data being shared … an agreed upon vocabulary defining the rules the metadata must follow Taxonomies create this structure In addition, the solution must be general enough to be able to be applied universally!

12. Metadata – Data about data - Flickr Flickr

13. What is this – Untagged Data

14. What is this?

15. How can we understand Untagged Data

16. Tags give meaning to the Data 794144497 Object Sale GazeboGiver 200 2008-03-13 23:14:32 Jumphere Carver 17201 789465371 Stipend Base 400 2008-03-11 02:54:20 SYSTEM 17001

17. XML Extensible Markup Language Markup? –Data being exchanged Sent from computer-to-computer (intra and inter- organizationally) –Defining the data Enclosing the data with descriptions of what the data is –<> Tags used to enclose data Used to create Vocabularies –Standardized sets of tags (kind of like EDI) –XBRL is one such vocabulary –UBL is another

18. XBRL: What is it? XBRL (Extensible Business Reporting Language) is a royalty-free, open specification for software that uses XML data tags to describe financial information for public and private companies and other organizations. XBRL benefits all members of the financial information supply chain by utilizing a standards-based method with which users can prepare, publish in a variety of formats, exchange and analyze financial statements and the information they contain. The world's leading accounting, financial, government and software organizations are involved in the adoption and use of XBRL in the U.S.

19. Interactive Data XBRL –Liberates financial data from financial documents –How do we validate the data? Huge opportunity for CPA’s

20. What was accounting like before XBRL? Accounting Cycle –Journal, Ledger, Trial Balance, Financial Statements –Debits and Credits Text based! Manual input, manual interpretation, Re- entry of data for each separate use

21. XBRL X –eXtensible Beyond original intended use Extended by End User Tags extend use B –Business Financial Statement Reporting R –Reporting Using US GAAP L –Language XML Vocabulary based on XML –Extensible Markup Language –Rules for describing data

22. Who is behind XBRL Securities Exchange Commission –Public filings are currently voluntarily filed in XBRL format –Mandatory public filings coming soon... –Interactive Data! AICPA –Efficiencies to the accounting profession –Re-use of data without manual re-entering XBRL International –Non-profit Organization –Creates Standards XBRL U.S. –Charged with creating US GAAP taxonomy

23. XBRL Milestones April 1998 –XBRL is conceived by Charles Hoffman, a CPA with the firm Knight Vale and Gregory in Tacoma, Washington October 1999 –AICPA hosts first meeting July 2000 –Spec 1.0 is released and International organization created February 2005 –SEC creates voluntary program for reporting XBRL financial data on EDGAR September 25th 2006 –SEC’s chairman Christopher Cox announces contracts totaling $54 million... To Modernize and Maintain the EDGAR Database to Use Interactive Data Complete XBRL Code Writing for U.S. GAAP Financial Statements Create Interactive Data Tools for Investors

24. XBRL Milestones September 2006 –XBRL US, the United States jurisdiction of XBRL International, spins off from the XBRL committee of the AICPA. September 25th 2007 –SEC’s chairman Christopher Cox announces the completion of all development work on data tags for financial reporting in accordance with U.S. generally accepted accounting principles October 9th 2007 –SEC’s chairman Christopher Cox announces the creation of a new office within the 74-year old agency to lead the transformation to interactive financial reporting by public companies –... the new office is the agency-wide disclosure modernization program December 5, 2007 –US GAAP Taxonomies released for Public Comments February 11, 2007 –Second Draft of US GAAP Taxonomy Released for review –Advisory Committee on Improvements to Financial Reporting (appointed by SEC Chairperson) recommended mandated XBRL tagged filings for largest 500 companies followed by a phased in approach

25. XBRL Milestones April 16, 2008 –SEC Mandates use of XBRL June 5, 2008 –Final XBRL “US” taxonomies Acknowledged January 2009 –SEC Final Rules Published

26. XBRL Mandated Filing Dates Company Type Financial Statements Block FootnotesDetailed Footnotes > 500 Billion in outstanding stock ~ 55 companies 12-15-2009 12-15-2010 Large Companies 12-15-2010 12-15-2011 Small and IFRS reporting companies 12-15-2011 12-15-2012

27. SEC Webcast on XBRL Companies must post complete set of XBRL documents (Ex 101), not just instance document on their websites Companies are NOT obligated to provide viewers to users of the XBRL files/data New Element Extensions –New Monetary element Give it a debit or credit attribute Or a definition –Provide “hints” to help user understand what the element represents

28. Extensions Element Name –Should not contain company name or period- specific information SEC permitting first companies to submit using 2008 XBRL taxonomy until 2009 one is available July 22 Use Tags that are as specific as possible but that don’t exclude anything in the data

29. XBRL – Case Study: United Technologies Corporation From June 2007 Journal of Accountancy Current Process to create a 10Q: –Multiple ERP’s feed into –Hyperion Financial Consolidated (segment level) Uploaded to Corporate Overall Consolidation –Additional Information Emailed and manually entered –All Converted to Word –All is validated back to source –Word converted to HTML for EDGAR filing Total Time: 850 hours

30. XBRL – Case Study: United Technologies Corporation

31. The XBRL Structure Tags –Description of what data is 1000 Attributes –Meta-data (data describing data) 1000 Relationships –Is something described as related to ?

32. XBRL – Lets put it all together Instance Document –Contain tags describing data –ICU MedicalICU Medical Schema –Contains the definition of the tags LinkBases –Contains relationships between tags Taxonomy –Combination of Schemas (defining elements) and LinkBases (relating elements) –XBRL USXBRL US

33. Types of LinkBases Presentation –How to organize output E.g. what tags make up Current Assets Calculation –How related tags are summed (+ or -) Definition –Different tag names are related for the same thing Inventory and Merchandise Inventory Reference –A tag element and the standard reference (FASB) for an element Label –Machine Readable to Human Readable CashAndCashEquivalents = Cash and Cash Equivalents