XBRL in Government 2009 NSAA IT Conference September 30, 2009 Joe Kull Joe Kull PricewaterhouseCoopers PricewaterhouseCoopers

PricewaterhouseCoopers May 2009 Slide 2 We’ll cover… What is XBRL? Why its time has come How it works, what it costs Global adoption XBRL in the US

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PricewaterhouseCoopers May 2009 Slide 6 So let’s ‘containerize’ data and transport it anywhere…..

PricewaterhouseCoopers May 2009 Slide 7 So What Is XBRL? An XML dialect A free available open data standard Structure for quantitative or qualitative content ‘Structured’ data becomes interactive Built on collaboration and consensus Enables understanding across wide range of applications Makes data a commodity

PricewaterhouseCoopers May 2009 Slide 8 Interactive data: user driven, not system confined X Application & System Centric Dependent on system Integrators, developers, architects Expensive interfaces and patches Change is risky and expensive Standards & Data Centric Business rules are tied to data source Semantic ‘consensus’ Open standards enable interoperability Changes made to taxonomy

PricewaterhouseCoopers May 2009 Slide 9 Impact of Standards Industrial Transportation Construction Retail Medical Education Technology IT IS TIME FOR DATA

PricewaterhouseCoopers May 2009 Slide 10 XBRL Structure Technical standards for composing XBRL taxonomies Defines data ‘structure’ in a reporting regime Output of structured data using taxonomy [ies] Creates human usable documents XBRL − RenderingXBRL − InstanceXBRL − TaxonomyXBRL − Specifications

PricewaterhouseCoopers May 2009 Slide 11 Taxonomy document [or schema] Balance sheet Assets Intragovernmental PP&E____ Total assets ==== Liabilities Intragovernmental liabilities Loan guarantees _____ Total liabilities _____ Net equity position Cumulative results ____ Total net equity position==== Total liabilities and net equity position ====

PricewaterhouseCoopers May 2009 Slide 12 XBRL is More Than Just Tagging Business Information From standard taxonomy Custom taxonomy Instance document Key: Multi-dimensional business and financial data representations Flexibility of business reporting vocabularies (i.e. taxonomies) Mathematical relationships between concepts Flexibility about how to present information to users Calculations Cash = Currency + Deposits Formulas Cash ≥ 0 References GAAP I.2.(a) CoA 1100 Contexts US $X FY2009 Budgeted XBRL “200” Label Cash in Bank Presentation Cash & Cash Equivalents Customized presentation Custom calculation Customized references Definitions Related to Liquid Assets Customized definition Customized label

PricewaterhouseCoopers May 2009 Slide 13 XBRL International Consortium began in 1998 Currently 450 company members Governance by an International Steering Committee Established Jurisdictions At Large Representatives Board of Advisors Standards Board

PricewaterhouseCoopers May 2009 Slide 14 Standards Based Reporting and Analysis UK CA ESUS AU NZ IE JP KR BE CO BR AR SG HK NO SE PL IT CN IN LB CZ UA LU IASB AE NL TR GR JAM CH FR SI AT Established Jurisdictions Provisional Jurisdictions Projects Ongoing DE DK ZA Focus in 2009 IL Global Focus Jurisdictions CHL URY OCEG RIXML

PricewaterhouseCoopers May 2009 Slide 15 Countries with active projects AustraliaBelgiumBrazilCanada ChinaChileGermanyNetherlands IrelandSpainFranceItaly LuxembourgIndiaIsraelJapan KoreaPolandSingaporeSwitzerland UAEUnited StatesUnited KingdomSouth Africa

PricewaterhouseCoopers May 2009 Slide 16 XBRL Regulatory Adoption Government Australian Tax Office Committee of European Banking Supervisors (CEBS)/COREP Chinese Securities Regulation Commission (CSRC) {sponsoring Shenzen and Shanghai exchanges} Dutch Tax Authority Dutch Water Authority Spanish Stock Exchange Commission – 3000 companies Statistics Dept of Ireland Other Bank of Japan Bundesbank Eurostat Financial Service Agency of Japan The Irish Revenue Commercial Canadian Securities Regulators KOSDAQ – Korea Bank of Spain National Bank of Belgium National Tax Agency of Japan New Zealand Exchange U.S. Securities & Exchange Commission Shanghai Stock Exchange s Shenzhen Exchange Tokyo Stock Exchange UK Companies House UK Inland Revenue/HMRC US Federal Financial Institutions Examination Council (includes FDIC)

PricewaterhouseCoopers May 2009 Slide 17 Standard Business Reporting [SBR] Effort to reduce reporting burden by 25% or more -Removing redundant government forms/information -Adopting common language and int’l standards -Utilizing business software to pre-fill gov’t forms -Providing electronic interface from company accounting systems -Identify reporting as a by-product of normal/natural business processes Emerging as a compliance best practice -Dutch Taxonomy Project -New Zealand SBR -Austrailian SBR -Singapore SBR -Ireland eGov policy -Ministry of Corporate Affairs -EC SBR projects in EU countries

PricewaterhouseCoopers May 2009 Slide 18 Dutch Taxonomy Project – “The Dutch government intends to reduce the administrative burden of businesses with 25 percent”

PricewaterhouseCoopers May 2009 Slide 19 Australian SBR “The benefits to business are ultimately estimated rise to $795M per year on an ongoing basis”

PricewaterhouseCoopers May 2009 Slide 20 COREP/FINREP Banking regulators in Europe move from 27 different ways to 1 way. BASL, IFRS, and XBRL.

PricewaterhouseCoopers May 2009 Slide 21 Harvard Business Review “Wacoal, a Kyoto-based maker of lingerie, has use XBRL to enhance its ability to aggregrate operating information from the 24 proprietary IT systems used by its businesses in 23 countries. Wacoal needed six months and $50 million to implement the system-a sixth of the time and a third of the money that would have been required for a traditional ERP solution it had considered.’ [Harvard Business Review, February 2007, Breakthrough Ideas for 2007]

PricewaterhouseCoopers May 2009 Slide 22 FDIC Call Reports More accurate data –100% data received met mathematical requirements vs. 70% Faster data inflow – less than one day after quarter end vs. weeks after quarter end Increased productivity – 550 to 600 banks/analyst vs. 450 to 500 Faster data access – within 1 day of receipt vs. several days Greater efficiency – workload complete 41 days after calendar quarter vs. 48 days

PricewaterhouseCoopers May 2009 Slide 23 U.S. Securities and Exchange Commission Formally adopted XBRL for annual, quarterly, and registration statements Three year phased adoption starting with 500 largest, for y/e on or after 6/15/09 -Eventually will require note disclosures be structured in detail, increasing disclosures from ~300 to over 3,000 -GAAP taxonomy [FASB standards] exceeds 15,000 disclosure items -Filing companies moving toward embedded filing seeing efficiencies SEC also mandating mutual fund risk and return reporting in 2011 Other taxonomies under development underway include Morgagae backed securities, proxy disclosures, corporate actions, governance risk and compliance, risk reporting et al.

PricewaterhouseCoopers May 2009 Slide 24 United Technologies Voluntary SEC Filings Initial investment of $ hours on first filing, now down to 4 Total investment of $40k and 600 hours Commercial tools used Most work done in house by existing resources No new information is being required Technical knowledge of XML not a requirement Focus moves from format to content

PricewaterhouseCoopers May 2009 Slide 25 XBRL and Public Sector Financial Reporting: Standardized Business Reporting: Oregon CAFR Project Association of Government Accountants [AGA] research project to consider feasibility of developing and using an XBRL taxonomy to tag data to create a CAFR Various contributors including state of Oregon, GASB, FAF, NASACT, AGA, Allocation Solutions Inc., JustSystems, and PricewaterhouseCoopers. Plan: develop GAAP taxonomy for 156 data elements, 96 from the Statement of Net Assets and 60 from the Statement of Activities Many lessons learned, and opportunities. It can be done BUT it won’t be easy, cheap or fast Major obstacle: no regulatory driver such as the SEC Real question: would state/local SBR enable more attractive capital opportunties -

PricewaterhouseCoopers May 2009 Slide 26 The Nevada pilot: XBRL a way out spreadsheet ‘hell’ Use XBRL for grants reporting with expansion to a business portal Worked with 60 grants in Nevada Dept of Agriculture Current process is time consuming and error prone -Takes two weeks to generate a monthly report -Errors caused by manual manipulation, cutting and pasting of data Solution was to use an XBRL GL Adapter to tag GL entries using downloaded CSV data and populating a Web-based XForms report that processes XML. Report generation time cut to about an hour Looking next to apply XBRL to debt collection documents [taxes] Eventually would like to have XBRL tie together state portal for businesses applying for grants and licenses

PricewaterhouseCoopers May 2009 Slide 27 Creating an Interactive Single Audit Act Database [A-133 Project] An AGA Corporate Research Project -Partners include HHS, NASACT, Marklogic, Allocation Solutions, FAC Attempt to access details in full A-133 report -individual findings as recorded in the auditor’s finding -management response in the finding -corrective action plan -summary schedule of prior audit findings Develop taxonomy to look at findings -for a program across entities [ -across all programs within an entity -between entities First tests were successful: one click access from SF-SAC to detailed finding -But not with XBRL……

PricewaterhouseCoopers May 2009 Slide 28 XBRL benefits One source for external reporting Internal consistency across all locations Benchmarking, peer comparisons, research Enhances control Reduces manual handling of data Facilitates ad hoc data requests Small investment, documented efficiencies Leverages legacy systems

PricewaterhouseCoopers May 2009 Slide 29 Why now? Reporting will/is changing… THENNOW FocusShareholderStakeholder MediumPaperWeb FormatStandardCustom FrequencyPeriodicReal-time IndicatorsFinancial StatementsVarious Metrics Data EmphasisHistoricalProjected CostingHistorical CostValue-based info ValidationAudit AccountsAssure Processes EnvironmentConsistentDynamic ComplianceSelf policingStifling

PricewaterhouseCoopers May 2009 Slide 30 Why now? Organizational economics Transparency Globalization ‘Bad behaviour’ Because we can

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