XBRL and Financial Applications Paul Snijders Board member XBRL Nederland Founding member XBRL in Europe Former vice chair XBRL Solutions group Project manager Architecture NTP

What do we want as SW vendor  New business opportunities  Government ‘inventing’ new requirement  ‘All’ our customers asking for it  One standard for many possibilities  Minimal investment  in other words: Make some money

XBRL: from a software point of view  XBRL with software eyes  XBRL Concepts  Implementation strategy  Threats and Opportunities key to market adoption

Will XBRL have an impact on software ?  XBRL and financial applications  XBRL and reporting software  XBRL and ETL vendors (Extract Transform Load)  XBRL and consolidation vendors  XBRL and Business Intelligence  XBRL throughout the reporting chain

Current software products Accounting ERP/GL Logic Business Intelligence Data Warehouse Logic Consolidation Reporting Financial Reporting Logic Tax reporting Tax Software Logic  Each application has a proprietary data model  Application have specific logic and business rules  Data is transformed multiple times

What is XBRL?  XBRL is just another data format  XBRL is a sophisticated XML implementation  XBRL contains reporting definitions  XBRL has data validation and quality inside  XBRL removes many export formats  XBRL is NOT a standard chart of accounts  XBRL is a very active consortium

XBRL is externalization XBRL delivers a complete standardization and externalization of data definition, business rules and reporting requirements  Data exchange format  Data definitions also labels, references  Multiple data models Hierarchical, dimensional and relational  Reporting rules  Validation rules  Business rules Externalization of:  Exports, Queries  Data Dictionary  Application data model RDMB, Cubes  Reporting software  Application logic  Business Logic Impact on

Example XBRL Based on Taxonomy Goodwill Turnover Common stock CEO Bill Gates Profit Financial or business fact

How it works Validation Compliance checking Analysis Mapping Validation Companies XBRL Report Reporting Taxonomy creation Accounting rules Validation Regulator Taxonomy

XBRL: more than a data definition Label Cash & Cash Equivalents Label Kas en Geldmiddelen Formulas Cash Beginning Balance ≥ 0 References IAS 16, 2, a Presentation Annual report Presentation Balance sheet Indirect Presentation Income statement Presentation Cash flow statement Calculation Cash = Currency + Deposits Currency Euro/US$ M2, Segment2 Prod TV Hifi Segment2 Video Audio Scenario Budget Actual Period FY 2004 Q1, Segment1 Benelux EU Label Comptant et Comptant Equivalents Label Geld & Geld nahe Mittel Label Гроші та їх еквіваленти XBRL Taxonomy XBRL Instance Elements Profit : Entity: XYZ Ltd

Example taxonomy hierarchy - NTP Dutch GAAPRelationsData typesDutch GAAPRelationsData types IFRS Relations Presentation Calculation Dutch Gen-base Generic Elements Netherlands Dutch GAAPRelationsData types Form set Report Dutch Core Domain specific Tax Admin Annual reports Statistics Form Sets Per sub/target group International basis

Instance document <ifrs:profit contextRef=“Contex1” unitRef=“Euros” Decimal=“0”> Value Definition Taxonomy iso4217:EUR Unit Defintion Virtual Company North Actual Context Definition Simplified

Different data models in XBRL Element 1: 4000 Element 2: 203 Element 3: Amsterdam Element 4: 8000 Element 5: KPMG Simple list + Element 1: Element 2: Element 3: 4000 Element 4: Address Element 5: Street Element 6: zip Hierachy Relational 6000 Street 4Address 4 Employee 4 Street 3 Street 2 Street 1 Street 4000 Address 3 Employee Address 2 Employee Address 1 Employee 1 Salary AddressName Employee Employee Employee Employee 1 Insur. GrossNameSoc.Sec Multi dimensional Costs Sales Profit BudgetActualSales, 2006 April Product D UK Product C 700Product B Product A FranceGermanySales, 2006 Actual, April X X

Sofisticated technical fundament Taxonomy XBRL- Instance XBRL Spec 2.1 XBRL Spec 2.1 XML Schema XML Schema Instance Schema Instance Schema Xlink Schema Xlink Schema FRTA Taxonomy guidelines FRIS Instance guidelines Validation & Conformance suite pages spec 700+ Conformance tests 150+Mb Test set

More technical capabilities XBRL specification 2.1 Schema driven XML language Heavy use of X-link Data structuring Relational data models Multidimensional structures Hierarchical data Flat structures Multiple data representations Fully extensible Taxonomies Data structuring XML and custom data types Presentation & Calculation

And more great material to expect Link Role Registry (LRR)(100%) Dimensional taxonomies (90%) Formula linkbase(80%) Functions(80%) XBRL GL (95%) Versioning(1%) Approval processes(90%) Entity taxonomies(0%) Consolidation linkbase(0%) Rendering standards(5%)

Who is involved in reporting Internal IT departments Finance (Control/Consolidation) Reportees External Software vendors Consultancy System Integrators Auditors (also EDP auditors)

Software functionalities  Exploring taxonomies  Mapping to applications/Data  Validation (technical)  Compliance monitoring  Audit & control  Transactions in XBRL (XBRL-GL)

Opportunities for SW vendors  Single export format  New reporting functionalities  Enhance application data model  Reporting data structures?  Relational/multidimensional  New audit and control capabilities  XBRL GL support  XBRL as application data model

XBRL consortium deliverables Ready to use global standard Complete data model Standardization on export formats Standard transaction level format Multi language support Data quality and validation References to guidelines Generic business rules Presentation views Intrinsic flexibility FREE OF CHARGE

Alternatives  Make  Hard coded implementation  Generic implementation  Buy  Ready to use Reporting Module  Generic XBRL Product  XBRL Library /XBRL Engine The biggest question of all: What new solutions can I offer?

Appl. Database XBRL as hard coded format hardcoding Not a generic solution Recoding on any taxonomy change No new taxonomies New coding for new instances Dead end street

Generic approach GUI Business Software Complete Reporting Data Model XBRL Solution Mapping Standard Software Financial Report XBRL Standard Format Taxonomy Building Instance Creation Validation Compliance Audit & Control XBRL-GL Functionalities

Options XBRL GUI Business Software1 Build - Make your own XBRL processor - Application development XBRL GUI XBRL Engine GUI Business Software2 OEM - Buy XBRL components - Application development GUI Business Software 3 XBRL Engine Reporting Module Buy - Ready to use XBRL module - Simple implementation

Easiest road map 1.Embed existing Reporting Module 2.Provide basic XBRL output 3.Make use of XBRL functionalities Presentation, Calculation, data validation 4.Enhance with validation options 5.Provide taxonomy building options 6.Embed XBRL data concepts in your application 7.Support XBRL GL 8.Support all other XBRL stuff Formulas, functions, dimensions, Conformance suite

Financial application in the future ERP/GL Logic Data Warehouse Logic Financial Reporting Logic Tax Software Logic Data models XBRL Business rules XBRL Meta data XBRL exchange format XBRL Reporting International standard XBRL transactions XBRL

XBRL: Threat or opportunity 1.Transparent and open Data model 2.You have to support complex technology 3.Extra maintenance 4.Possible threat to several solutions 5.Low license revenue 6.Open source XBRL 1.Better serve customers 2.Only one export format to maintain 3.New solutions & functionalities 4.New business opportunities 5.Extra licenses from new products

Todo’s  Knowledge  Build your own XBRL team  Technology  To what extent to provide support  Data  How far to go with data integration?  Business  What can you charge the customer?

Market development - thank you XBRL Global sophisticated standard Complete set of material Complete test sets Ready to use reporting data model Single format Reduction of maintenance Guaranteed use and market demand Huge market potential

“Above all, continue with your enthusiastic contributions to the global development of the XBRL standard. As I said at our last XBRL Conference in Tokyo: Have no doubt, you are changing the world for the better” Chairman Christopher Cox, U.S. Securities and Exchange Commission San Jose, California, Jan. 18, 2006

Interesting promoters “One way, perhaps, to distance ourselves from relying on these quarterly earnings forecasts, is to make progress toward real- time disclosure. ” Michael G. Oxley, House Committee on Financial Services Washington, March 29, 2006

Paul Snijders Board member XBRL Nederland Founding member XBRL in Europe Former vice chair XBRL Solutions group Project manager Architecture NTP Free Taxonomy Viewer Visit the Semansys booth