1 Neal Hannon and Saeed Roohani XBRL Educational Resource Center At Bryant College XBRL Education Co-Chair Phone: The Next Technology Revolution XML XBRL Rhode Island Society of Certified Public Accountants May 17, 2001

2 Defines Tags

3 XBRL International is gaining strength XBRL activities occurring in— –United States –Canada –Australia –China & Hong Kong –Japan –Malaysia –New Zealand –Singapore –Taiwan –Germany –India –Ireland –Netherlands –Nordic Federation (Denmark, Norway, Sweden) –South Africa –Spain –Switzerland –United Kingdom And on a global level through the— –International Accounting Standards Council –International Press Telecommunications Council –International Standards Organization

4 XBRL International is gaining strength On a Global level through the— –International Accounting Standards Council –International Press Telecommunications Council –International Standards Organization On a Country Level: –United States –Canada –Australia –China & Hong Kong –Japan –Malaysia –New Zealand –Singapore –Taiwan –Germany –India –Ireland –Netherlands –Nordic Federation (Denmark, Norway, Sweden) –South Africa –Spain –Switzerland –United Kingdom

5 How we are organized – US Jurisdictional Working GroupChair CommunicationsChristy Reichhelm (Microsoft) DomainSergio de la Fe (KPMG) EducationNeal Hannon (IMA, Bryant College) Jenia Gorfunkel (S&P) LiaisonZach Coffin (KPMG) Liv Watson (Edgar Online Inc) SpecificationDavid Vun Kannon (KPMG) Luther Hampton (e-Numerate) StrategyLouis Matherne (AICPA) Mike Willis (PwC) ToolsEric E. Cohen (PwC) Web siteGeni Whitehouse (Navision) ProcessMike Willis (PWC) ObjectGary Gannon

6 XBRL Impact "The explosive growth of the Internet is not only changing the way companies conduct their business, it also promises to forever alter the way they communicate business performance.” - CFO Magazine, February 2000

7 XBRL Documents XBRL for Financial Statements XBRL for General Ledger XBRL for Journal Entry Reporting XBRL for Credit Reporting XBRL for Performance Press Releases XBRL for Risk Reporting XBRL for Regulatory Filings XBRL for Tax Filings XBRL for Assurance Schedules XBRL for Authoritative Literature XBRL for “Business” Reporting

8 XBRL Support “I would like to see you develop valuation models that result in consistent, comparable and fair values of assets and liabilities. I would like to see you hone specific, but plain English definitions for the types of information you believe should be included in public disclosure. I would like to see you take your XBRL project a step further, providing account classifications for companies in common industries. In short, I challenge you to turn all of this data into meaningful information for investors.” - Arthur Levitt, Chairman, U.S. Securities & Exchange Commission October 24, 2000, at the Fall Council of the AICPA (Las Vegas, Nevada)

9 XML for Financial Reporting Enables a dramatic improvement in the processing of financial reports XBRL documents can be— –Prepared efficiently –Exchanged reliably –Published more easily –Analyzed quickly –Retrieved by investors simply to enable smarter investments

10 XBRL is: –NOT a new accounting standards but enhances the distribution and usability of existing financial statement information –Enabler and an extension for relational database functionality for all financial statement information Benefits

11 Problems XBRL Addresses Ineffective communication to investors Inefficient aggregation and analysis Inefficient creation of financial statements

12 Why XBRL ?  Enable business reporting that leverages the Internet & XML  Effective access and analysis of business reports  Improve corporate communications with stakeholders

13 Process Benefits: Lowering Financial Reporting Cost Who benefits Regulatory Filings Web Site Tax Return Trade Filings Printed Financials Accounting System Third Party Information Explanatory Text Today’s external reporting processes –Rework and delay –Ad hoc and non repeatable –No path forward

14 Process Benefits: Lowering Financial Reporting Cost Who benefits Regulatory Filings Web Site Tax Return Trade Filings Printed Financials Accounting System Third Party Information Explanatory Text XBRL Documents Common interchange format and storage is good information management practice –Reduces redundancies & discrepancies –Repeatable processes using tools –A platform for continuous reporting

XBRL: Interoperability & Multiple Uses Other Sources of Information US GAAP Financial Statement In English US GAAP Financial Statement In Dutch US GAAP Financial Statement to the Web US GAAP Financial Statement to Print US GAAP Financial Statement to Cell Phone XBRL Other Sources of Information G/L Package XBRL ERP Custom Developed Systems Other Sources of Information XBRL

XBRL: Interoperability & Multiple Uses Other Sources of Information US GAAP Financial Statement EDGAR Filing Tax Filing Bank Filing Press Release XBRL Other Sources of Information G/L Package XBRL ERP Custom Developed Systems Other Sources of Information XBRL Investors & Creditors News Agencies And Others Government

Once Every Event is tagged in XBRL… Other Sources of Information IAS Financial Statement in German US GAAP Financial Statement In English French Tax Filing Canadian Banking Filing EDGAR 10k line item via Cell Phone XBRL Investors & Creditors News Agencies And Others Government Other Sources of Information G/L Package XBRL ERP Custom Developed Systems Other Sources of Information XBRL

XBRL Working Model: Planned Specifications External Financial Reporting Business Operations Internal Financial Reporting Investment and Lending Analysis Processes Participants Auditors Trading Partners Investors Financial Publishers and Data Aggregators Regulators XBRL for G/L Journal Entry Reporting XBRL for EDGAR Filings XBRL for Financial Statements XBRL for Tax Filings XBRL for Business Event Reporting Software Vendors Management Accountants Companies

19 XBRL: not a Transaction Protocol XBRL is merely a format to serialize complex, structured financial data: e.g., statements, G/Ls. Therefore, it cannot replace OFX, ebXML, ANSI X.12 Trans Set 821, OMG G/L Spec,... Future message sets in those protocols could include XBRL tagged data if they need to send financial statements in the message body. XBRL provides a framework and an AICPA approved vocabulary that can be extended to many other reporting frameworks. What it is

20 XBRL: not an accounting standard Means of communicating –Current GAAP –Current practice Flexible standard –Future standards –Future general practice

21 XBRL Impact "Coming down the road are standards like XML and XBRL that take data handling a major step forward from HTML, the current web standard. With these new standards, plus those for accounting, it will be possible to scan a universe of corporate data across the web and extract, say, the chairman's report for all companies with a certain market cap, EBITDA, and gearing. …

22 XBRL: A Fragment of a Raw Data $1,611 $1,648 CompanyFinancial Statement Line ItemLabelYearValue Coca Cola Co. Balance SheetCurrentAssets.Cashand CashEquivalents Coca Cola Co. Balance SheetCurrentAssets.Cashand CashEquivalents  Raw Data in Spreadsheet…  Same Raw Data in XML (XBRL) Format

23

24 What software ‘sees’ is the differentiator and drives benefits (here is an example)

25 Importance of Reporting ” John Chambers Cisco CEO Year End Earnings Release Call August 10, 1999 “ …[W]hat excites the CEO is the ability to know what the business is doing at any given point in time, react quickly to market shifts and competitive threats and remain in tight control while empowering employees to make informed decisions more quickly.

26 “ ” The Virtual Close … has, in my opinion, just as much impact on a company’s future success or lack thereof as the well- published e-commerce area. John Chambers Cisco CEO Year End Earnings Release Call August 10, 1999 Best Practice

27 XBRL Impact “ … If Europe moves quickly to take up these standards, it could give them an attractive lead in the race to accessible and comparative key data that would stimulate investor interest. It would undoubtedly spawn a plethora of research tools that would be useful to both private and professional investors.” - Investors Chronicle, August 9, 2000

28 XBRL and the Emergence of ‘e- Standards’ E-Standards are fundamental HTML is the standard that enabled the web’s first ‘Big Step’ XML is the web’s next ‘Big Step’ –Over 200 XML-Based Specifications and Protocols exist, including— RosettaNet – computer company supply chain and trading webs OBI - Open Buying on the Internet - retail e-commerce FpML - Financial Products (Derivatives, Swaps, FX) ACORD XML - Insurance industry information exchange standards derived from EDI. –UN/CEFAC = EBXML XBRL is uniquely focused on financial reporting

ASB IASC FASB IFAC SEC Territory Institutes Standard.orgs ( reporting vs ‘e’) Accounting / Auditing Reporting W3C OASIS;UN/CEFAC T (ebxml) xml.org RosettaNet ACORD ‘e-Business’ CPAs participate / lead in these What about these?

The range of what is under development today………... HR CRM ACORD ANX RosettaNet FpML CHEMX “Horizontals” (Infrastructure) there are others….. “Verticals” (Industry Supply Chains) there are others……. Etc. XBRL is uniquely focused on business reporting

31 BUSINESS XBRL Adds Reporting to E-Commerce Investors Aggregators RegulatorsCreditorsLendersTaxWebsite ERP G/L Packages CRM Orders A/P Delivery Customers Orders A/R Delivery Suppliers 2-way Transaction Creation One way One way

32 XBRL Adds Reporting to E-Commerce BUSINESS Investors Aggregators RegulatorsCreditorsLendersTaxWebsite Transaction Creation ERP G/L Packages CRM Orders A/P Delivery Customers Orders A/R Delivery 2-way Suppliers One way One way XBRL BUSINESS REPORTING (e-)Commerce OTHER XML INITIATIVES

33 Key XBRL Components XBRL / XML Specification (XBRL.org) –Global architecture/technology XBRL hierarchical vocabulary (jurisdiction/industry) –Dictionary of terms by jurisdiction/industry sector Style Sheets(preparer) XBRL enabled tools(market) XBRL - What

34  Market driven model –Start simple, be inclusive  Broad supply chain participation  Members support XBRL  Members do not compete on the “framework”  Build structure & systems to support open community & market development Key to our Success

35 Steps in Technology Acceptance Visionaries Taxonomy Simplification/Tools Acceptance

36 XBRL Working Model: Supply Chain & Beneficiaries External Financial Reporting Business Operations Internal Financial Reporting Investment and Lending Analysis Processes Participants Auditors Trading Partners Investors Financial Publishers and Data Aggregators Regulators Today XBRL for Financial Statements Software Vendors Management Accountants Companies

37 Benefits to Today's Users 1.Reduce cost of analyzing and reporting financial information 2.Increase speed and efficiency of business decisions 3.Enhance the distribution and access of existing financial statement information 4.More readily exchanged 5.Increase and enhance analysis

38 XBRL Taxonomies Under Development  Commercial and Industrial Companies, US GAAP - Published  Federal Departments, US  Mutual Funds, US  Financial Institutions, US  Commercial and Industrial, IASC  Commercial and Industrial, German GAAP  Bank Call Reports - FDIC App to fin rep

39 How Do You Get There? Needs Assessment Design Solution/Business Plan Training & Education Implementation

40 XML Shortcomings? XML Shortcomings? Lots of Hype, not a solution for everything Not a replacement for integration and middleware tools and middleware tools There are many different standards among industries Standards still evolving But, you can’t wait while the standards evolve….

XBRL Development & Adoption

42 Additional Education Sources - Student Competition web.bryant.edu/xbrl

43 Final Thought…….. Change is not what it used to be….. Change has become a process; it’s become a permanent part of the external environment

44 Summary FASTER –BETTER CHEAPER Our profession will have to follow technology and record business activity in an real-time mode.

45 Concluding Remarks…..

46 To download slides……….