© Grant Thornton International. All rights reserved. How XBRL makes compilation and preparing financial statements / tax filings easier and cheaper A new role for the intermediair Thursday, 25 June 2009 Drs H.W. Knoop RA

© Grant Thornton International. All rights reserved. Introduction –Developments in the Netherlands –Covenants –Control Methodology –Working processes within GT –Some recommendations

© Grant Thornton International. All rights reserved. Developments in the Netherlands Financial Statements (filing) 2007Dutch Statistic Reports Tax return VAT Tax return Pay-roll taxes 2008 Financial Statements on tax principles Tax return corporate income tax 2009/Banking taxonomy (extension) 2010Tax return income tax DTPXBRL for ALL companies in the Netherlands

© Grant Thornton International. All rights reserved. Former situation: more differences than similarities Financial Statements Principles based on Dutch GAAP True and fair view Disclosure requirements Models for financial statements Requirements by law (e.g. filing) Tax return corporate income tax Principles based on tax principles Prudence Influenced by politics Additional tax disclosures Tax formalities

© Grant Thornton International. All rights reserved. Desired situation: Same principles and requirements - 1 Financial statements Tax return corporate income tax Authoritative taxonomy Minimum position for financial statements included Both commercial and tax accounting principles included Not in taxonomy: then not required Dutch law was changed FS on tax accounting principles possible Filing of instance documents possible Guidance on tax accounting principles Style sheet Which changes are required by government:

© Grant Thornton International. All rights reserved. Desired situation: Same principles and requirements - 2 Balance sheet (filing) Banking (Short) Tax return FS on tax principles = Balance sheet (filing) = (short) Tax Return Corporate Income Tax = Financial Statements on tax principles = Banking reporting = Total integration

© Grant Thornton International. All rights reserved. More developments: covenants Covenants between several audit firms/software companies and Ministries: Financial statements (filing)  Ministry of Justice Short tax return (corporate  Ministry of Finance/ income tax) tax authorities

© Grant Thornton International. All rights reserved. 8 (Dis)Advantages covenants with XBRL  Final tax assessment when filed  70% less than normal tax return  No inspection at client  No differences FS and tax return  Potential efficiency benefits  Restructuring and reimplementation of financial system  Confidentiality rules  Liability (client versus audit firm)  Expectations client benefits GO NO GO

© Grant Thornton International. All rights reserved. Requirements included in covenants Good quality procedures within audit firm Meta-supervision by tax authorities Determination of the profit (read: financial statements) is based on ISA's (principle based) No additional tax procedures are instructed All tax issues are upfront proactive discussed with tax authorities Confidentiality issue Materiality issue

© Grant Thornton International. All rights reserved. 10 Desired situation: Control Methodology 9. Receive confirmation 8. Send XBRL doc 7. Validate XBRL doc 6. Generate XBRL doc 5. Check data in source system 4. Adjust data and aggregate in source system 3. Mapping to taxonomy 2. Extend taxonomy 1. Publication / implementation new taxonomy Quality assurance Mapping control Data consistency control Validation control Send control

© Grant Thornton International. All rights reserved. 11 A number of Control measures Control measures  Audit trail visible (edit/ approval/ submit)  Segregation of duties (data entry/ review/send)  No manual changes in instance document  Inconsistency in reports (presentation)  Validations (e.g. Roll-up, zero- balancing, reconciliations etc.)  Blocking trans- mission in case of inconsistencies  Error reporting  Right version of taxonomy used  Right context  Status versions (draft – final)  Encrypted saved and sent  Reporting all non- mapped accounts  All non-mapped accounts are highlighted in red  Change management procedure for chart of accounts Step 6Step 7Step 5 Send XBRL doc Step 8Step 3 Validate XBRL doc Generate XBRL doc Check data in source system Mapping to the taxonomy

© Grant Thornton International. All rights reserved. Working processes within GT? Client G/L Financial system Report generator Tax software Statutory Financial statements Financial statements (filed) (short) Tax return Banking reports Dutch Statistics C L I E N T P O R T A L Electronic working processes

© Grant Thornton International. All rights reserved. Some recommendations Integrated software: –Financial accounting, report generator and tax software integrated in one system –Link with latest version of taxonomy –Import and export features of XBRL –Only extensions on taxonomy possible –Validation rules in software –Consolidation rules Electronic working programs Client portal –Data sharing with client –Authorization process of documents included

© Grant Thornton International. All rights reserved. Questions? Hanneke Knoop