Addressing XBRL

8/8/2019 Addressing XBRL

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Addressing XBRLMoving business and nancial reporting

into the digital age


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Addressing XBRL

What is XBRL?

What are the benets of XBRL?

A global perspective on XBRL developments

XBRL and the regulatory environment

Implementing XBRL in SEC nancial reporting

IFRS and XBRL

The future of XBRL

Reference and additional information

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General XBRL terms:

Contexts Component of an XBRL instance

document that is assigned with each piece of tagged

information, and contains dening meta-data including

reporting period, entity information and other

contextual information.

Defnition A human-readable description of areporting concept described by a taxonomy tag used to

help during the tagging process.

Extensible XBRL taxonomies can be extended,

allowing users to add new company-specic tags,

create custom labels and edit various relationships

between tags.

Instance document XBRL coded report containing

a companys nancial information including

reporting periods and currency type; utilizes tags

from taxonomies.

Meta-data Commonly referred to as data about

data. This is the various tagging detail that denes the

nancial reporting information such as the type of data

or reporting period.

Properties The attributes of a tag including its name,

balance and data type, etc. Taxonomy properties

cannot be changed by extensions.

References Part of a taxonomy used to associate

references to authoritative literature with tags.

Relationships Part of a taxonomy used (linkbases)

to dene specic relationships and other information

about tags. There are ve standard linkbase types:

presentation, calculation, denition (dimensions),

labels, and references.

Rendering A human-readable presentation of an

XBRL instance document used to view its contents.

Tag (XBRL element) How individual nancial

reporting and other data (e.g., values, textual data) are

identied using elements or tags from the taxonomy.

Taxonomy Classication system of tags (elements)

that dene nancial and other information and the

relationships between them.

Validation The check for technical soundness and

consistency that is limited in determining if XBRL is

applied properly. Such limitations include the inability

to evaluate the appropriateness of all tags used.

XBRL eXtensible Business Reporting Language.

XBRL GL XBRL GL (global ledger) is a future

prospect for using XBRL to handle information that

is found in a chart of accounts, journal entries or

historical transactions using a specially designed

XBRL taxonomy.

XBRL International The international body that

develops and maintains the XBRL technical standards.

Started in 1999, the XBRL consortium was conceived

with international participation from various rms,

including Ernst & Young. XBRL International is a

not-for-prot consortium of approximately 500

companies and government agencies worldwide

through approximately 25 countries/jurisdictions that

focus on the progress of XBRL in their region.

Glossary of XBRL terms used throughout this document


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1Moving business and nancial reporting into the digital age

Foreword

For several years, momentum has been

building towards the establishment

of a single digital nancial reporting

standard. eXtensible Business Reporting

Language (XBRL), or interactive data

as the US Securities and Exchange

Commission (SEC) often refers to it,

is an open technology standard which

makes it possible to store business and

nancial information in a computer-

readable format. XBRL doesnt change the

accounting standards or methods used for

business and nancial reporting, but it is

predicted to have a profound impact on

various stakeholders.

Proponents of XBRL claim this electronic

standard will allow for more efcient

retrieval and analysis of nancial

information, thus enabling better, faster

and more consistent information,

resulting in higher quality decisions by

investors. Many countries and/or nancial

regulators have approved, or are in the

process of implementing, requirements

around XBRL as the electronic nancial

reporting standard.

This publication is designed to address

the key questions being asked today

by nancial executives such as CFOs,

controllers, and audit committee

executives. Specically, the questions

that we hear from clients and friends are

typically around four key topics:

Regulatory compliance What is driving

the adoption of XBRL? What are the

specic regulatory requirements and the

overall timeline for implementation?

Benets and ROI What are the benets

of XBRL from both market and company

perspectives?

Investor relations How will XBRL impact

investor relations within my organization

and within the overall marketplace?

Other impacts and implications How willXBRL complement IFRS, my organizations

nancial reporting systems, as well as

other areas?

We hope this publication helps provide

you with the necessary background

information both content and context

to help plan and prepare for your

organizations transition into digital

nancial reporting. Please let us know

your thoughts and comments, including

other topics of interest around XBRL and

nancial reporting.


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2 Addressing XBRL

What is XBRL?

Key takeawaysXBRL involves machine-readable

tagged data (meta-data, or

data about data) and is fast

becoming the digital standardfor communicating business and

nancial information.

Computers can treat XBRL data

intelligently applications can

recognize the information in an

XBRL document, select it, analyze

it, store it and exchange it with

other applications, and present it

automatically in a variety of ways

for users.

A useful analogy is to think of

XBRL as bar coding where

applications can automatically

identify each piece of data and

specic information about it, such

as value, type, currency, date,

source and its relationships with

other data.

Authors:

Matthew Slavin, Ernst & YoungAssurance & Advisory Business Services

Americas (Cleveland)

Hamish Bowen, Ernst & YoungAssurance & Advisory Business Services

Oceania (Wellington)

Many organizations have been looking to

the internet to bring the long-heralded

promises of better, faster, cheaper

to organizational decision-making, and

specically to business and nancial

reporting. An emerging technology

standard, eXtensible Business Reporting

Language (XBRL), promises to web-enable

the nancial reporting process for both

organizations and consumers.

Introducing XBRL

XBRL is the nancial and operational

business reporting offshoot of Extensible

Markup Language (XML), which is a freely

licensable, open technology standard

(or vocabulary) used to exchange

business information electronically. XML

is the universally preferred data

description language used to describe

the storage, manipulation and exchange of

data via the internet.

The basis for XML is a tagging process

where each value, item, descriptor, etc., in

the exchanged information can be given

a unique set of tags to describe it. Using

these tags, computer programs can read

the data without human intervention.

XML tags are commonly used to exchange

information, such as personal information,

an individuals name, telephone number

or account balance. XML leverages groups

of tags in the form of a taxonomy, or

classication system, to describe data for a

particular audience. Many industry groups

have their own XML vocabulary for their

activities e.g., insurance (ACORD), real

estate (RETML), news media (NewsML).

Essentially, XML is a language designed to

develop other languages, such as XBRL.

XBRL is being positioned as the vocabulary

of business and nancial reporting. It is a

way to bar code business information

contained in general ledgers, income and

cash ow statements, balance sheets, as

well as text information included within

the footnotes and other requirements of

business reporting.

XBRL is:

An open technology standard for

reporting and analyzing business and

nancial information

Software agnostic, or independent

Accounting framework neutral

XBRL is not:

A standardized chart of accounts

A way to require the reporting of specic

information

A transaction level activity (although

it can summarize general ledger

transactions)

The idea behind XBRL is

simple. Instead of treating

nancial information as

static text as in a standard

internet page or a printed

document XBRL provides

an identifying tag for each

individual item of data,

whether numeric or textual.

This tag is computer readable

and allows the information to

be used interactively.


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Clearly, there is increased interest in XBRL and a growing

recognition of the important role it can play in enhancing the

integrity and the credibility of nancial reporting and auditing.

Ian BallChief Executive, International Federation of Accountants

Address to the 14th XBRL International Conference

How XBRL works

Instead of treating nancial information

as a block of text, XBRL provides a

computer-readable tag to identify

each individual item of data. Through

the attachment of identifying tags to

individual pieces of data, a businessreporting document becomes intelligent

data, allowing the exchange of

business reporting data by encoding

the information in a meaningful way.

Computer applications can use the XBRL

data to recognize the information in an

XBRL document, select it, analyze it, store

it, exchange it with other computers and

present it in a variety of ways for users.

XBRL tags are dened and maintained in

taxonomies which contain meta-data (data

about data). Taxonomies are the basis for

tagging nancial and business information

in XBRL. A taxonomy is an electronic

classication system of tags dening

thousands of business reporting concepts

(including text) and their relationships.

The taxonomy provides organization and

details for each concept, including the

labels, denitions, accounting balance

(i.e., debit or credit), presentation and

summation information. An instance

document is the end result of how a

preparer creates XBRL data. It contains

report information typically compiled from

internal ERP or nancial reporting systems

that have been marked up or tagged

in XBRL. Figures 1 and 2 below show the

inter-relationships between the various

elements of XBRL.

XBRL is extensible (i.e., can be extended)

since a preparer can create, dene

and describe new tags unique to its

particular circumstances, while otherwise

maintaining the comparability of other

information tagged using the standard

taxonomy. XBRL was designed to be

exible and is intended to support aspects

of electronic nancial reporting across

countries and industries.

Tagging nancial data in XBRL is similar

to the use of bar codes. The bar code

was created to electronically identify

different products. Similar to a bar code,

applications that utilize XBRL data can

automatically identify each piece of data

and specic information about it, such as

value, type, currency, date, source and its

relationships with other data.

Figure 1

XBRL overview

ABC Corporation (US$ in millions)

Balance sheets June 30

2009 2008

Assets

Current assets:

Cash equivalents 19,188 21,081

Short-term investments (including securities pledged ascollateral of $3,797 and $9,624) 54,322 86,183

Total cash and short-term investments 73,510 107,264

Accounts receivable, net of allowance fordoubtful accounts of $357 and $426 35,601 29,252

Inventories 3,538 4,640

Deferred income taxes 5,962 6,091

Other 7,514 6,641

Total current assets 126,125 153,888

21,081 What is being tagged?

Cash/cash equivalents: 21,081,000,000

Currency: US dollars

Reporting period: 2008-06-30

Balance: Debit

Company: ABC Corporation

Statement: Balance sheet

Denition: Cash equivalents, excluding

items classied as marketable

securities, include short-term, highly

liquid investments that are both

readily convertible to known amounts

of cash, and so near their maturitythat they present insignicant risk

of changes in value because of changes

in interest rates

Figure 2

XBRL taxonomy

example


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4 Addressing XBRL

Why XBRL?

A number of groups are likely to

benet from XBRL, including investors,

governments, regulators, economic

agencies, stock exchanges, nancial

information companies, company

executives, nancial analysts andcreditors. Supporters believe XBRL

offers potential benets at various

stages of business reporting and

analysis. The benets may include

increased automation, cost savings and

faster, more reliable and more accurate

handling of data.

(For more information on the potential

benets of XBRL, please see the article

entitled What are the benets of XBRL?

in this publication.)

XBRL and the nancial

and business reporting

supply chain

With increased interest in nancial

reporting transparency and the

availability of advanced information

technology tools, there is a greater focus

now on supplying more information on

a timely basis to external stakeholders.

While the format in which this information

needs to be supplied is evolving, there is

an increasing need for information to be

available in electronic formats.

Business reporting information supplied

by one organization is often used as input

for the processes of another organization.

This process is often referred to as the

information supply chain. The nancial

and business reporting information

supply chain (see Figure 3) is a model

that describes the information disclosure

process, from the start of the transaction

within the primary and support processes,

to the use of reporting information

by stakeholders. Given the changing

demand for reporting information and

the increasing opportunities in the eld

of information technology, the existing

information supply chain should change

substantially as a result of XBRL.

For example, in the external part of the

information supply chain, once a company

has published information, stakeholders,

such as analysts, can use the information

to form a picture of business performance

during that reporting period. Depending

on the interests of the stakeholders, the

data supplied can be ltered and analyzed

to obtain the desired information. As a

result, analysts should spend less time on

processing data and be able to invest more

time in detailed and meaningful analyses

through XBRL.

The need for XBRL

Organizations and regulators alike are

being challenged to reassess business

and nancial reporting processes in

light of recent market events. Increasing

economic, market and regulatory

pressures are requiring companies to

accumulate and publish information

for a myriad of internal and external

stakeholders in greater frequency and

detail, in a variety of electronic formats.

The speed with which data needs

to be reported to external parties is

also increasing. Stakeholders want to

receive the reports as soon as possible

after period closing. This can lead to

signicant pressure on companies.

Filers strive to meet these evolvingrequirements, but often nd themselves

constrained by their nancial reporting

budgets and in-house resources.

Experience has shown that accounting

information systems and/or ERP

packages are not always efcient in

meeting these needs. As a result,

companies are being forced to prepare

separate reports for each group of

stakeholders.

Governments and regulators also see

the need for and the potential benets

of XBRL in nancial reporting. (For

more information, please see the article

entitled XBRL and the regulatory

environment in this publication.)

The resulting dialog around XBRL has

intensied as companies, stakeholders

and regulators look to make the process

of business reporting more efcient.


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Technical consistency

Business

operations

Participants

Processes

XBRL

XBRL

XBRL

XBRL

Internal financial

reporting

External financial

reporting

Investment lending

regulation

Economic policy-

making

Companies

Software vendors

Trading partners

Financialpublishers and

data aggregators

Investors Centralbanks

Management

accountantsAuditors Regulators

Figure 3 Information supply chain

Source: XBRL International

Who is leading the XBRL initiative?

The XBRL movement is being governed

by XBRL International; a not-for-prot

consortium comprised of several working

groups, and governed by a central steering

committee comprised of elected members

from the established jurisdictions. XBRL

International includes approximately

25 established and provisional local

jurisdictions, which focus on the progress

of XBRL in their region. The steering

committee coordinates the working groups

and has responsibility for setting technical,

nancial and operational strategy within

the organization. Workgroups have an

international and jurisdictional focus.

Over 500 entities worldwide are involved

in the various XBRL jurisdictional

organizations including public

accounting rms, technology companies,

governmental entities, academia and other

organizations. Ernst & Young is one of the

original founders of XBRL International.

XBRL adoption is progressing at multiple

levels and varying speeds and is gaining

global acceptance as the web-based

nancial reporting data format of choice.

(For more information, see the article

entitled A global perspective on XBRL

developments in this publication.)

Where can I learn more?

More detailed information on XBRL is located on the XBRL International website at

www.xbrl.org and on Ernst & Youngs website at www.ey.com/xbrl.


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6 Addressing XBRL

What are thebenets of XBRL?

Key takeawaysXBRL offers a number of potential

benets for various stakeholders,

including regulators and investors,

as well as for the ling company.

XBRL proponents focus on the

mantra of better, faster, cheaper

as the key potential benets.

Authors:

Paul Penler, Ernst & YoungAssurance & Advisory Business Services

Americas (Cleveland)Andrew Garner, Ernst & YoungAssurance & Advisory Business Services

Oceania (Canberra)

Before XBRL, reported data whether in

online digital formats such as hypertext

markup language (HTML) for web pages,

as attachments (e.g., Adobe Acrobat,

Microsoft Word), or on paper was little

more than a photo-copy. That is, the data

could be read by humans, but not easily or

quickly incorporated into other electronic

formats. XBRL makes data intelligent.

By attaching an identifying XBRL tag to

each piece of data, the business reporting

document becomes machine-readable

(e.g., a computer can read the data, search

for information and perform calculations).

What are the potential

benets?

XBRL promises to web-enable the

business reporting process for preparers,regulators and users. Proponents

believe that XBRL will allow stakeholder

institutions to signicantly improve the

efciency and effectiveness of their key

business-reporting processes. The mantra

of better, faster, cheaper has been

commonly used in outlining the potential

benets of XBRL (see Figure 4).

Better Key business and nancial

reporting processes are likely to improve

because XBRL may:

Improve the overall quality and accuracy

of data obtained from companies

Reduce potential errors from manual

entry through machine transfers of

reporting information

Allow nancial analysts, investors,

internal users and other interested

parties greater ability to access,

compare and analyze data in ways

that currently are not practical or even

possible

Faster The overall speed is likely to

increase because XBRL may:

Accelerate the analysis of nancial data

(e.g., not requiring analysts to re-key,

validate or normalize data)

Increase the speed at which nancial

decisions can by made by analysts,

investors, lenders, rating agencies, etc.

Figure 4 Potential benets of XBRL

Better Faster Cheaper

Accuracy No rekeying Automated

Accessibility Instant user access Software independent

Analysis More frequent updates Less effort to use


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[On XBRL] This is all about bringing investors better, faster and

more meaningful information about the companies they own

it would transform nancial disclosure from a 1930s form-based

system to a truly 21st century model that taps the power of

technology for the benet of investors.

Christopher CoxChairman, US Securities and Exchange Commission (SEC)

May 2008

Cheaper The costs of business and

nancial reporting are likely to be reduced

because XBRL may:

Allow easier, more automated

processing and analysis of

nancial information

Reduce the costs of preparing and

submitting nancial information to

regulators and banks

Initially, preparing reports using XBRL will

likely require additional efforts on the part

of many organizations, particularly with

respect to tagging the various elements

of information included in notes to the

nancial statements. The incremental

effort associated with XBRL, however,

should decline over time based on

experience and because much of the work

in tagging XBRL is performed the rst time

each report type is XBRL-enabled. On an

ongoing basis, each new XBRL instance

document is created with current data and

the extension taxonomy is maintained or

updated as changes to nancial reporting

are made.

Who will benet?

There are a number of groups who will

likely reap benets from XBRL, including

governments, regulators, company

executives, nancial analysts and

investors. (For more information, please

see the article entitled XBRL and theregulatory environment in

this publication.)

How can stakeholder

groups actually benet?

Even though XBRL is still fairly young in

overall maturity, below are two examples

of how key stakeholders can and

have already begun to realize various

potential benets from the transition

to XBRL.Investor relations example: giving

end-users what they want

XBRL promises to transform the investor

relations area by allowing companies to

publish and process nancial information

to better meet the needs of investors,

analysts and other stakeholders (e.g., in

a format that can be readily obtained via

an investor relations website), and at a

lower cost.

Essentially, XBRL provides investors,

analysts and other interested parties a

standardized method for gaining more

transparent access to nancial-reporting

data, without changing the amount or

detail of the information being disclosed

by the bank, on a regular basis. This

increased transparency without

requiring additional disclosures, rekeying

of data and cross-platform formats

should ultimately contribute to a lower

cost of capital.


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8 Addressing XBRL

Todays processes and issues

Without XBRL (i.e., current state):

It is difcult for users to review,

assimilate and analyze nancial data or

to extract relevant information, even

when data is drawn from reports issued

by the same institution.

Quarterly reporting has become very

rigid instead of being event/risk driven.

Institutions often have to scale back

the extent of the information being

presented because of format limitations.

It is difcult to highlight or emphasize

certain information.

Financial reports frequently exclude

marketplace (i.e., competitor)

comparisons.

Investors and analysts have difculty

benchmarking results against those of

peer companies or competitors.

Tomorrows processes and benets

By contrast, substantial benets are likely

to accrue with the introduction of XBRL:

Users can access the nancial results

they are most interested in, using the

productivity tools and data formats they

want to use. Results can be compared

and/or benchmarked more easily against

data published in prior or future reports,

or in those issued by competitors.

Investor relations professionals can

publish nancial results in a multitude

of ways, including interactive websites,

which will allow them to more effectively

communicate pertinent information

and analysis to investors and market

analysts, and do it more easily and less

expensively than in todays more

limited formats.

Computers can automatically identify

and then process the data, reducing the

need for all stakeholders to operate on

the same platform, or rekey or reformat

the data.

Given the ease with which data can be

published and used, more information

and at more frequent intervals can

be made available, thereby possibly

enhancing the value derived by the

end-user.

Internal nancial and operational

reporting example: migrating to

eReporting

As organizations begin to use XBRL for

business and nancial reporting, it is

likely that many will seek to leverage the

XBRL-enabled data for internal reporting

as well. This represents a true migration to

the concept of eReporting, with one set

of data being used to meet all internal and

external reporting needs. From the rst

recording of a transaction, to its payment

and clearing through the banking system,

data can be stored electronically, located

with ease and displayed selectively.

XBRL should provide companies better

quality information with which to evaluate

its own performance and that of its trading

partners. In addition, business leaders

will have the information earlier in the

business cycle to better impact outcomes.


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Todays processes

As an example, many preparers

currently use the following internal

reporting process:

Data systems (nancial, operational

and others) are consolidated in a

monthly report.

Email and/or hard copy documents are

sent to senior and mid-level executives.

Management uses data to make

decisions and gauge performance.

The most signicant improvement in

this process over the last decade has

been the advent of email. However,

organizations still must:

Review, assimilate and analyze large

amounts of nancial and operational

data to extract relevant information

Rely on/transmit outdated

information, as reports frequently

include information from various

sources and are not distributed until

all of the information is available

Scale back the extent of the

information being presented because

of format limitations

Tomorrows benets

As XBRL developments unfold, companies

will begin to think of their nancial data

as intellectual property and will treat it

as nancial media, making it available

with built-in feedback loops to nd

out more about how the data is beingused. With this information in hand,

organizations can continuously improve

their reporting processes.

As a result:

Reports can be prepared selectively

and/or more frequently. Thus, some

reports may be uploaded weekly instead

of following the common monthly

distribution patterns.

Users can more easily work with the

data. Thus, static graphs can be replacedby interactive charts and tables and

users wont need extensive training or

advanced skills to get desired results.

Operating efciency and effectiveness

are likely to improve as data becomes

more accurate, which may in turn

improve decision-making.

Users can devote less time to reading,

comprehending and analyzing data.

Preparer processing times for publishing

and distributing documents will bereduced.

Cycle time is shortened, so reports can

be disseminated more quickly.

Entities can expend less effort and fewer

resources to meet reporting obligations.

Moving business and nancial reporting into the digital age 9

Conclusion

Web-enabling business reporting holds

signicant potential benets for a

variety of stakeholders. We anticipate

that the broad adoption of XBRL will

yield positive results for regulators,investors, borrowers, analysts

and the general public. As with all

transformational technologies, the

timing of adoption is critical too

early may result in unnecessary cost,

while adopting too late may result

in missed opportunities. Although

widespread adoption of XBRL must

continue to pass various technical,

regulatory and administrative

milestones, now is the time to examine

its likely uses and benets.


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10 Addressing XBRL

A global perspective onXBRL developments:technology through collaboration

Key takeawaysXBRL is a multi-faceted,

collaborative initiative occurring at

the global level.

Although XBRL is a global

technology standard for business

reporting, it has localized

applications in many countries.

XBRL adoption currently is being

driven primarily by regulators.

Author:

Josef Macdonald, Ernst & YoungAssurance & Advisory Business Services

Global (London)

Hideo Nakamura, Ernst & YoungAssurance & Advisory Business Services

Japan (Tokyo)

In recent years, XBRL has seen rapid expansion as an enabling technology around the

world. XBRL is a network innovation which requires concerted action from a number

of stakeholders to be widely adopted. For this reason, its development has been, and

continues to be, facilitated through the voluntary and collaborative efforts of key

stakeholders currently driven principally by local government and regulatory agencies

who are demanding lings in this standardized electronic format.

To fully understand the XBRL movement, it is critical to understand the global scope ofthis effort and the local market developments. This article provides an overview of two

key areas: 1) regional and local country developments around XBRL; and 2) global XBRL

collaboration efforts.

Regional and local country developments

While not all-encompassing, here is a brief summary of select XBRL developments

around the world.

1. The Americas

US

In 2008, the US Securities & Exchange

Commission (SEC) announced a number

of proposed rules to mandate XBRL for

companies, including mutual funds, credit

rating agencies, domestic and foreign

public companies (using US GAAP) and

foreign private issuers (using IFRS). In

addition, other regulatory agencies in

the US have adopted XBRL. For example,

in 2005 the Federal Deposit Insurance

Corporation (FDIC) mandated XBRL for

regulatory bank reporting.

CanadaThe Canadian Securities Administrators

(CSA) initiated an XBRL voluntary ling

program in May 2007 paralleling the US

SEC initiative.

Brazil

A GAAP taxonomy is being developed

by the University of So Paulo, and

was released for public comment in

October 2007. The Receita Federal, the

Brazilian Ministry of Economy bureau,

is coordinating the development of the

System for Digital Books (SPED) project,

which is a key part of establishing the

Central Balance Sheet Data Ofce.

Colombia

The Ministry of the Economy is in the

process of applying XBRL to one of its

main nancial information systems.


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But it isnt because of the possibilities we all might imagine for a cryptic name like XBRL that were

all here to collaborate on the global XBRL initiative. Its because of what it can do for people: for

companies, for investors, for analysts, for nancial journalists for just about anyone whos a

potential customer for comparative analysis of company nancials.

Christopher CoxChairman, US SECAddress to the 16th XBRL International Conference


2. Europe & Africa

European Union/European Commission

In May 2008, the European Parliament

agreed by a large majority that the

European Commission would support

the introduction and adoption of XBRL

for EU regulatory lings and businessreporting. This decision comes on the back

of a report in which the Committee on

Economic and Monetary Affairs strongly

promoted the use of XBRL in Europe.

UK

In December 2005, Companies House

started receiving nancial reports for

small companies in XBRL. In June 2006,

the UK government announced plans to

make XBRL mandatory for all company

tax returns, including accounts, due

after March 2010. This date was deferredto 2011.

France

In June 2007, the Commission Bancaire

began receiving COREP (Basel II) and

FINREP (IFRS) reports in XBRL. Together

with the Banque de France, it has also

initiated the Unied System of Financial

Reporting (SURFI) project to develop

an XBRL taxonomy and overhaul the

reporting system for nancial institutions

(prudential and monetary).

Spain

In July 2005, two Spanish regulators

received the rst real data in XBRL.

Currently, 3,000 listed companies report

in XBRL to the Spanish Stock Exchange

Commission. Most banks report individual

and consolidated public statements in

XBRL to the Bank of Spain.

Netherlands

Starting in January 2007, Dutch

corporations were able to submit their

data in XBRL to the Dutch Tax Ofce, theChambers of Commerce and the Central

Bureau of Statistics pursuant to

the Netherlands Standardized Business

Reporting (SBR) business-to-government

program.

Poland

Poland is focused on a cross-agency

project which aims to standardize

information exchange through

development of common XBRL

taxonomies for use by the Companies

Register, Ministry of Finance and

Financial Services Authority.

Sweden

The Swedish companies registration

ofce, Bolagsverket, has launched a

service for the XBRL ling of annual

company accounts by small and

medium-sized entities.

Ireland

The Central Statistics Ofce (CSO) has

successfully piloted the use of XBRL in

one of its quarterly industry surveys.

Norway

A common government portal for XBRL

lings (Allt-In at government) has been

created and is now collecting private

company lings and seeking budget from

the government to develop an analytical

dissemination platform. The Norway Stock

Exchange (Oslo Borse) has been appointedby the government to be the ling agent

and is starting a voluntary ling platform.

Belgium

The National Bank of Belgium has

published a taxonomy which has been

used by 29,000 commercial and

industrialized companies for lings of

accounts from April 2007. The Federal

Public Service is currently developing a

taxonomy for corporate tax lings. The

nal taxonomy is scheduled to be released

in December 2008. The new reporting

system is planning to go live in 2010.

Germany

Bundesanzeiger (the German public

register for company information including

annual reports) started XBRL-based

electronic lings in January 2007.

Italy

Italy adopted XBRL for the deposit of

annual nancial statements in March

2008. More than 850,000 Italian

companies are subject to a mandatory

deposit of their approved annual nancial

statements to the Italian Business

Register through the Chambers of

Commerce network.

Portugal

Banco de Portugal currently utilizes a

self-developed XML schema as the basis

of the standard for reporting by nancial

corporations to the bank. In the case of

non-nancial corporations, XBRL is

being envisaged as the preferred

technical solution.

Denmark

Since 2005, it has been possible to

submit annual accounts in XBRL to the

Danish Commerce and Companies Agency

(DCCA). A full-scale XBRL solution for the

Danish class B annual reports has been

running since the beginning of 2008. TheXBRL taxonomy in Denmark has been

developed by the DCCA in cooperation

with both industry and experts.

South Africa

South Africa launched its jurisdiction in

July 2006. Its local taxonomy is under

development. The South African Revenue

Service is planning to implement the

capacity to receive XBRL lings starting

in 2010.


14/36

12 Addressing XBRL

3. Asia Pacic and Middle East

Japan

The Bank of Japan has launched an XBRL

system for gathering data from 500

nancial institutions. The Tokyo Stock

Exchange has been accepting corporate

nancial information in XBRL formatsince early 2003. The Timely Disclosure

Network system (TDnet) using XBRL was

ofcially released in July 2008. In August

2008, some 8,000 companies and funds

using Japanese accounting rules began

providing the core part of their nancial

statements in XBRL to the countrys

nancial regulator, the Japanese Financial

Services Agency (JFSA).

In addition, the National Tax Agency

of Japan started receiving e-Tax forms

together with XBRL-formatted nancialstatements from businesses in 2004.

Korea

In October 2007, all publicly held

companies in Korea were required to le

nancial statements using XBRL on the

Korean Financial Supervision Commission

electronic ling system. This followed a

successful voluntary XBRL ling program

established in 2006.

China

The Chinese Securities RegulatoryCommission (CSRC), which governs the

Shanghai and Shenzhen Stock Exchanges,

was the rst capital market in the world to

mandate XBRL reporting.

Singapore

The Accounting and Corporate Regulatory

Authority (ACRA) has launched an XBRL

project as a standard for online nancial

reporting. Filings were mandatory starting

in 2007. ACRA is working closely with the

Institute of Certied Public Accountants of

Singapore.

Thailand

The Stock Exchange of Thailand (SET) has

twenty companies participating in the SET

IFRS XBRL pilot project.

Taiwan

The Taiwan Stock Exchange Corporation

is proactively constructing the XBRL

demonstration platform, which is

scheduled to be completed by the end

of 2008.

India

In a potential rst among developing

countries, the Reserve Bank of India

announced in October 2008 the pending

launch of the Basel II reporting system

using XBRL in conjunction with its existing

online returns ling system. SEBI (the US

SEC equivalent in India) has mandated

that starting in January 2008 the top

100 companies must submit electronic

lings through the Corporate Filing

and Dissemination System, an XBRL-

enabled ling solution by the Bombay

Stock Exchange and the National Stock

Exchange.

United Arab Emirates

In May 2006, the Abu Dhabi Securities

Market (ADSM) became the rst stock

exchange in the Middle East to promoteXBRL adoption by recommending its use

by all listed companies in the United Arab

Emirates. A provisional XBRL jurisdiction

was set up under the sponsorship of the

ADSM and with support from the Central

Bank, the Securities and Commodities

Authority, the Accounting and Auditors

Association and major accounting rms,

making it the rst XBRL jurisdiction to be

established in the Middle East.

Israel

Since January 2008, The Israel Securities

Authority (ISA) has required Israeli public

companies to report using the Israeli XBRL

taxonomy, an IFRS extension taxonomy

which includes the translation of all therelevant IFRS terms into Hebrew.

Australia

In 2005, the Australian government and

Australian Stock Exchange built a local

extension to the IFRS taxonomy. In 2006,

the government recommended that

Australia follow the Netherlands model

of government Standardized Business

Reporting (SBR). This is a three-year,

AU$208 million project which was started

in 2007 to standardize lings to ve

government agencies.

New Zealand

In June 2008, the New Zealand

government announced that it will

examine the feasibility of introducing

SBR (as used in the Netherlands and

Australia) for businesses to submit

nancial data to multiple government

agencies in just one transaction, cutting

the time and effort spent preparing and

ling reports to the government.

Sources:

The above information was compiled from numerous

reported sources and was accurate at the time of

compilation, October 2008. Key sources include:

XBRL International website (www.xbrl.org); XBRL

International Progress Reports, 2006 2008; and

web based press releases.


15/36

XBRL development

and adoption has

been achieved

through the active

collaborationof

various groups

around the world,

including unlikely

combinations of

stakeholders.

Collaboration: To work jointly with others or together

especially in an intellectual endeavor

To cooperate with an agency or instrumentality

with which one is not immediately connectedSource: Merriam-Webster online dictionary

Collaborative standard building

XBRL International, the body responsible for

developing and propagating the XBRL standard,

is a not-for-prot consortium of over 500

organizations worldwide working together. It brings

together collaborative contributions from all major

stakeholders in the business reporting information

supply chain, including regulators, preparers,

software vendors, advisors and auditors. To manage

this voluntary effort, XBRL International is comprised

of jurisdictions which facilitate progress of XBRL

in their region. XBRL International is made up

of approximately 25 established and provisional

jurisdictions. For more information, visit

www.xbrl.org.

Common taxonomy architecture

collaboration

The US SEC, Japanese JFSA, together with the

International Accounting Standards Committee

Foundation (IASC Foundation) has initiated a

collaborative work effort towards developing an

Interoperable Taxonomy Architecture (ITA). Theobjective of this initiative is to identify opportunities

for taxonomy architecture alignment between the

three different approaches in the respective GAAP

taxonomy developments. The work is also supported

by the European Commission which is seeking a

common framework for XBRL to promote and

support its adoption. For more information, visit

www.iasb.org/xbrl.

Ibero-American collaboration

The XBRL Spain Jurisdiction has a goal to promote

and support XBRL activities across Ibero-American

countries. To achieve this goal, several strategies have

been initiated including: new membership structure

for Ibero-American countries; the development of the

Ibero-American XBRL conferences and workshops;

and the establishment of strong relationships with

main economic and nancial bodies of Ibero-American

countries, in particular central banks. For more

information, visit www.xbrl.es.

Multi-institutional government

collaboration

SBR is a system using XBRL designed to reduce the

need for businesses to submit the same or similar

information to multiple government agencies. As a

result, business-to-government reporting is faster and

more efcient, thereby reducing the reporting burden

on lers. Pioneered by the Netherlands government

for statistics, taxation and company electronic

lings, SBR is now being developed (with extensive

collaborative knowledge sharing between countries)for multiagency ling initiatives in Australia and New

Zealand, and is under consideration in the UK. For

more information, visit www.sbr.gov.au, www.e.govt.

nz/standards/e-gif/xbrl and www.xbrl-ntp.nl/english.

Interoperability: the ultimate

form of collaboration

With other markup languages

Interoperability leads to greater efciency in

the exchange and quality of data and meta-data

between the business reporting and other similartechnologically enhanced domains. This allows for

XBRL and other markup standards to be

complementary and not competitive.

Examples include:

XBRL and Research Information Markup Language

(RIXML): the two bodies responsible for these

standards have signed a memorandum of

understanding which sets out a framework for

collaboration to maximize the investment of The

Parties by actively seeking ways to avoid duplication

of efforts, communicating in open forums on a

regular basis, including periodic teleconferences and

face-to-face meetings.

XBRL and Statistical Data and Meta-data Exchange

(SDMX): In 2006, XBRL International and the

SDMX Sponsors Committee announced that apreliminary investigation by SDMX and XBRL experts

has conrmed the potential for interoperability

between the two frameworks, which have focused on

aggregated statistical data and individual business

reporting, respectively.

XBRL and Tax XML: the OASIS Tax XML effort has

collaborated with XBRL International stating that

Since tax related information spans many business

interests and is mostly either an extension of

common business documents or a repackaging of

business information for tax compliance documents,

any existing or in-progress standards for business

information will be examined and incorporated as

appropriate. It is expected that this coordination

and collaboration will be conducted with XBRL (The

eXtensible Business Reporting Language), and otherleading initiatives as needed.

For more information visit www.xbrl.org/RIXML/XBRL-

RIXML-MoU.htm or www.xbrl.org/Announcements/

sdmx_15_12_2006.htm.

Software interoperability

In June 2008, XBRL International constituted its

Best Practices Board a body established to provide

guidance and materials reecting the best practices

developed during implementations of XBRL around

the world. This included chartering a software

interoperability practice working group.

Worldwide

US

UK

Japan

South America

Spain

Netherlands

Australia

New Zealand

Global XBRL collaboration examples



16/36

14 Addressing XBRL

XBRL and theregulatory environment:removing inefciency, improvingquality and increasing transparency

Key takeawaysMany stakeholders perceive XBRL

as a regulator-led phenomenon,

driven in part by increasing

demands for information,instances of corporate fraud and

the global credit crisis.

Few companies see a clear return

on investment (ROI) for adopting

XBRL. Many perceive XBRL as a

compliance issue, with the cost of

implementation as high and few

benets in the short term.

While investors are expected to be

key beneciaries of XBRL, there

is little awareness among the

investor community and no sense

of urgency to use the technology.

Ultimately, XBRL should benet

many stakeholders in the nancial

information supply chain.

The ow of timely, appropriate and

transparent information in global

markets can be greatly enhancedby the use of XBRL.

Authors:

Josef Macdonald, Ernst & Young

Assurance & Advisory Business ServicesGlobal (London)

Jenny S. Chan, Ernst & YoungAssurance & Advisory Business Services

Far East (Shanghai)

Companies typically spend a signicant

amount of time reporting to regulators,

who in turn are burdened with processing

the reported information. Both sides are

eager to eliminate inefciencies. XBRL

promises to improve the data ow for

both sides, but it seems apparent that the

most signicant initial benets will be to

the regulators. In this article, we examine

the XBRL mantra of better, faster,

cheaper (see Figure 5) and discuss why

the potential benets to regulators have

resulted in the push to mandate XBRL.

Global trends

Currently, XBRL has been implemented,

developed as a pilot, or is the primary

candidate for regulatory adoption

by a range of worldwide regulatory

organizations. In looking at the overall

global environment (see article entitled A

global perspective on XBRL developments

in this publication), we see the following

patterns and trends:

Asia is at the forefront of XBRL

adoption; regulators in China, Japan,

Korea and Singapore have mandated

the use of XBRL for some reporting

requirements.

In the US, Christopher Cox, the SEC

Chairman, has made the adoption ofXBRL one of his highest priorities and

has focused on mandating its use before

the end of his tenure.

In South America, banking regulators

and nancial institutions are leading the

XBRL charge.

In Europe, the adoption is either driven

by banking regulators (e.g., France,

Belgium, Spain), tax authorities

(e.g., Netherlands, UK) or stock

markets (e.g., Spain).

In Australia and New Zealand, the main

XBRL activities are multiple agency or

SBR programs, aimed at providing a

centralized system of ling for numerous

regulatory agencies.

Africa, despite being the second

largest continent in the world in botharea and population, is lagging behind

the rest of the world due to the number

of developing nations, but is nonetheless

evaluating XBRL-based regulatory

infrastructures, particularly in

South Africa.

Todays processes

and issues

Currently, the collection, processing

and distribution of regulatory reports

and lings is largely inefcient in part

because reporting forms, instructions

and edit rules are constructed, collected

and distributed using an unstructured

and nonintegrated digital format. Often,

reporting forms, instructions and edit rules

are constructed using disparate ofce

automation products. While these initially

offer improvements over paper-collection

processes, they do not meet todays

business needs or offer the advantages

of XBRL. Under current arrangements,

lings are sent to regulators (or theirintermediaries using regulatory reporting

software vendors) in a format that often

requires interpretation and manual

updating and processing.


17/36


A lot of the use of XBRL has been regulator-

driven by the nance sector.

Charles HoffmanInventor of XBRL

A tectonic shift is taking place in the economy

right now, one that is punishing those that have

been most abusive of the trust of customers,

investors, governments and the taxpayers in

those governments. XBRL has the potential to

help renew that trust.

Kurt CagleOnline Editor for OReilly Media

Principal drivers:

quality and efciency

Regulators are intently focused on the

need to reduce the reporting burden

on preparers while still encouraging

compliance and minimizing costs. Theprincipal drivers of the regulatory push for

adopting XBRL are quality and efciency

(see Figure 6). These two drivers lead to

the ultimate goal of nancial reporting

greater transparency in the marketplace

for consumers.

Quality

Standardized data in the form of XBRL

provides a logical mechanism to drive

both quality and efciency. XBRL reduces

the need for manual data entry and re-

entry, lowering the risks associated withtransposition error.

In addition, XBRL data is more accurate

than its paper and electronic counterparts,

providing varying levels of validation. This

allows an opportunity for validation prior

to, during and after submission, and by

multiple stakeholders. As a result, more

precise data can be collected and provided

to investors and analysts.

Efciency

Today, a signicant amount of time is

incurred by both preparers and regulators

in reporting and processing regulatory

ling information. Both sides agree that

the current process is inefcient. XBRL

allows for the more timely collection and

distribution of regulatory data. XBRL

assists regulators to capture, analyze and

report growing volumes of information,

while lowering the cost of collection and

distribution. In short, XBRL will improve

the processing of the information and the

quality of the reporting.

Figure 5 Examples of potential XBRL regulatory benets

XBRL is estimated to reduce the bank

regulatory data and processing efforts

by one-third

Improves data accuracy

Improves exibility

Simplies programming

Improves data timelines

Decreases cycle times

Automates data validation

Reduces reporting burden

Reusable data

Reduces production cost

XBRL-based reports will eliminate manual

labor associated with the re-keying of

data between parties

Due to the standard format the data is

reusable for other regulatory reports and

may be repurposed with changes in the

external business environment

Better

Faster

Cheaper

Figure 6 Likely regulatory benets by stakeholder group

Stakeholders

XBRL regulatory report benets Preparer Regulator Vendor Analyst

Quality

Improve accuracy

Validate prior to submission

Validate at time of receipt and prior to

acceptance of ling

Validate after receipt

Provide consistent validation edits

Efciency

Improve data timelines

Publish preparer data at time of receipt

by regulator

Create and deploy event-driven reports Reduce reporting burden

Get it right rst time

Automate data entry

Reuse data for internal and external

reports

Integrate data for internal and external

reports

Simplify programming effort

Provide integrated and structured

forms, edits, instructions, test data, edit

data and code

Improve exibility

Update and communicate report

requirements more easily


18/36

16 Addressing XBRL

Transparency

Quality and efciency are the inputs,

but transparency is the desired outcome

from business and nancial reporting.

Consumers make important decisions

regarding their investments based on

nancial information. Every investor

desires easy access to more information

and at a higher quality that will help them

understand the company, the competition

and the market. They are seeking a clearer,

or more transparent, view about the

nancial data of the company in question.

But what exactly do regulators mean

when they refer to more transparent

nancial reporting? The best way to think

about transparent data is high-quality

nancial statement information which is

clear, informative and understandable.

Ultimately, it should allow investors to

make more informed decisions, more

quickly and easily.

Given the desire for increased

transparency in nancial reporting,

XBRL is proving to be very attractive to

regulators. XBRL can lead to tangible

benets for regulators in quality

and efciency and to the ultimate

consumers, the investment community.

Regulatory implementation approaches

There are a number of typical adoption,

or implementation, approaches that

regulators have used relative to XBRL.

Listed below and outlined in several

case studies in this article are the most

common approaches:

Top-down vs. bottom-up approach

All-encompassing vs. phased approach

Mandatory vs. voluntary approach

Open system vs. closed system

(i.e., potentially undened taxonomy

content, requiring user extension

compared to dened taxonomy content

where no user extension is required)

Common practice/industry vs.

core approach

Regardless of the permutations and

combinations of approaches, there is

no denying the increasing international

interest in multiagency XBRL-based

initiatives to simplify business-to-

government reporting. Since current

reporting requirements impose a

signicant burden on business a burden

that governments and regulators are

committed to reducing we see increasing

pressure to develop solutions to address

the problem.

Case studies of

approaches and impacts

UK Companies House

The UK Companies House approached the

collection of company data by using XBRL

in the simplest form of company reportsled dormant companies on a voluntary

basis, but for a reduced ling fee. Once

this was established and working, it then

proceeded to add more complex forms of

company lings.

Approach

This approach is a hybrid of the bottom-up,

phased and closed system approaches.

Over time, it is expected that the UK

Companies House will migrate to more of

an open system and allow local extensions

of the IFRS core taxonomy.

Impact on preparers

This approach has resulted in over

100,000 lings. Its success is attributable

to its initial simplicity a graduated

approach for its rst lings.

Does XBRL result in reduced costs?

XBRL automates the facilitation of a more reliable exchange of

regulatory nancial information across different software formats,

platforms and technologies by leveraging the internet. It enhances

data reusability and improves access to nancial information

making it possible to provide increased efciency of regulatoryassessments and analytics and cost savings for users.

XBRL proponents claim lower production costs for preparers. At

least initially, XBRL introduces an increased reporting burden and

therefore increased costs to a preparer. Longer term, however,

benets can be derived from automation, including lower costs

and more efcient and reliable reporting. These cost savings andbenets should exceed the initial cost increase.


19/36

US SEC

This started out as a voluntary,

comprehensive ling. It is now moving

towards a mandatory ling with a

graduated two-phase approach. Initially,

nancials will be led containing block

tagging of notes to nancial statements. In

the second year, preparers will progress to

detailed tagging of the notes.

Approach

This is therefore a hybrid of a top-down,

modied all-encompassing, mandatory

approach preceded by a voluntary, open

system and local GAAP approach. Over

time, it is likely that it will expand to allow

IFRS extensions.

Impact on preparers

Valuable insight was obtained from theSECs Voluntary Financial Reporting

Program (VFRP) and was applied in the

proposed rule. The principal observations

resulted in the development of a more

detailed, robust and t-for-purpose

taxonomy and an acknowledgement that

newcomers to lings using XBRL required

additional time to become accustomed to

notes tagging. This culminated in a phased

approach to the rollout of the rule.

The benets of greater

transparency

Financial reporting based on XBRL would

create new ways for investors, analysts

and others to retrieve and use nancial

information in documents led withregulators. For example, users of nancial

information could download it directly into

spreadsheets, analyze it using commercial

off-the-shelf software, or use it within

investment models in other software

formats. Through interactive data,

text-based information that is currently

static can be dynamically searched and

analyzed, facilitating the comparison of

nancial and business performance across

companies, reporting periods

and industries.

For these reasons, XBRL also provides

a signicant opportunity to automate

regulatory lings and business information

processing, with the potential to increase

the speed, accuracy and usability of

nancial disclosure making nancial

reporting more transparent. This

automation could eventually reduce costs.

A company that uses a standardized XBRL

format at earlier stages of its reporting

cycle could reduce the need for repetitive

data entry and, therefore, the likelihood

of human error. In this way, XBRL may

actually improve the quality of information

while reducing its cost.

Transparent nancial reporting is essential to informed investment decisions

by investors and lending decisions by creditors, and to other users of nancial

statements... From the perspective of a nancial statement user, interactive data

will be a giant step toward making the nancial data more understandable, useful,

and user-friendly. The best known and most advanced method for using interactive

data in nancial reporting is eXtensible Business Reporting Language (XBRL).

Scott A. Taub

Acting Chief Accountant, US SECTestimony Concerning Fostering Accuracy and Transparency in Financial Reporting before the

House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises


Conclusion

XBRL is gaining considerable traction

globally, driven by new regulatory

requirements. The broad adoption of this

technology will likely satisfy the diverse

and critical needs of many stakeholders,including not only regulators but in

turn borrowers, investors, analysts

and preparers. XBRL should enable

regulatory bodies to remove the heavy

weight of their reporting requirements

through digitalization.

Christopher Cox, the SECs Chairman,

passionately advocates that an emerging

technology standard XBRL will

digitalize the nancial information value

chain, bringing benets to all capital

market stakeholders. Companies in Asia,Europe and the Americas are already

exchanging information with their

regulators or stock exchanges using

XBRL. The momentum is accelerating

globally and there are strong

expectations that the SEC movement will

trigger more regulators to mandate the

use of XBRL for lings in the near future.

XBRL has the potential to become the

global technology standard for business

and nancial reporting.

As with any innovation, however, there isuncertainty. The adoption of XBRL could

take longer than, or not be as broad as,

expected. A number of obstacles stand

in the way, such as the fear of another

Sarbanes-Oxley-like requirement

and the perception that XBRL is only a

regulator-driven phenomenon.


20/36

18 Addressing XBRL

Implementing XBRL inSEC nancial reporting

Key takeawaysImplementing XBRL for nancial

reporting can vary widely from

country to country based on the

regulatory authoritys approachand/or rules.

There are three key steps in

preparing for and complying with

the transition to digital nancial

reporting through XBRL: education

and assessment; prepare for the

rule; and comply with the rule.

Each of these steps has a number

of activities, decisions and action

items that need to be addressed

with a variety of options and

alternatives for the XBRL preparer.

Authors:

Paul Penler and Matthew SlavinErnst & Young

Assurance & Advisory Business Services

Americas (Cleveland)

About this article

This article concentrates on implementing XBRL

in accordance with the proposed rule of the US

Securities & Exchange Commission (SEC) and is

extracted from Ernst & Youngs detailed

guidance. For more information, contact your

local Ernst & Young ofce or any of the contacts

listed in the back of this document. While this article

is focused on the specic SEC requirements for

XBRL, many of the overall implementation approach

considerations and issues will likely be consistent

across jurisdictions.

The movement to digital nancial reporting through XBRL is happening around the

world. Some countries have already mandated XBRL as the electronic reporting

format, while many other countries and/or regulatory authorities are moving rapidly

in this direction. So what should your organization do in response? What are the key

considerations and issues that need to be addressed in implementing XBRL for nancial

reporting?

We believe, in general terms, that there are three major steps in preparing for, andcomplying with, a move to digital nancial reporting through XBRL:

Education and assessment the time to learn more about XBRL and better

understand the specic regulatory requirements and implementation timeline

Prepare for the rule the think, design and build phase, which includes

mapping your nancial statement information to the appropriate XBRL taxonomy

(e.g., IFRS, SEC)

Comply with the rule create, review and submit the appropriate XBRL documents to

the regulatory authorities

This three-step process is depicted in Figure 7 and outlined here in more detail. The time

and level of effort depicted in the graphic can vary based on the organizations decisions

(e.g., managing XBRL efforts in-house vs. outsourcing). This article will look at the key

activities, decisions and action items within each of these three steps.

Initial

considerations

Initial vs. optimal implementation: Some companies may

strive towards an optimal XBRL implementation at the outset,

while others will choose to initially outsource the process

and validation elements (with the exception of tag selection)

to an EDGAR ling agency. Although many companies will

likely utilize an EDGAR ling agency to create their rst-

year XBRL submissions, more are expected to transition

to creating XBRL les themselves in year two or three.Furthermore, to more effectively manage and create nancial

statement disclosures, and to comply with the second-

year requirements of tagging the notes and supplemental

schedules to the nancial statements at the lowest level

of detail (potentially hundreds of additional tags for some

companies), we anticipate that some companies will opt to

more comprehensively address XBRL in years two or three.


21/36

Another sign of maturity is the way that XBRL is being rebranded:

as Interactive Data in the US, and as Standard Business

Reporting in Australia and the Netherlands. We are close to the

time when we shall no longer talk about XBRL because XBRL is

broadly implemented.

Olivier ServaisXBRL Team Leader

International Accounting Standards Committee Foundation


30-day

grace

period

3 months prior

to rst submission due

6 months prior


9 months prior


Education and assessment

Understand SEC plans

Learn about XBRL

Assess needs and readiness

Mandate effective First submission due

Prepare for the rule

Design and build creation process

Map nancials to taxonomy

Perform XBRL dry-run

Comply with the rule

Create XBRL documents

Review XBRL documents

Submit XBRL documents

1

2

3

Figure 7 First year XBRL timeline (for any phase)

1

The rst step in the implementation process involves taking

the time to learn more about XBRL and the specic details

surrounding the regulatory authority rule(s). Key executives and

stakeholders across the enterprise should invest the appropriatetime to learn about and discuss the implications of implementing

XBRL. During this step, companies should focus on the following

activities to prepare for XBRL:

Understand the overall regulatory requirements for

implementing XBRL

Identify an internal XBRL point person, or champion (i.e.,

process owner), to coordinate the process, including educating

key stakeholders

Explore and better understand the various implementation

approach options:

Internal skills needed within the organization to implement

XBRL

External assistance options from vendors and advisory rms

Tools and software packages available to support the

transition to XBRL

Assess the level needed, if any, for outside technical support

or assistance with XBRL tagging and/or internal issues to

manage the XBRL implementation in-house

Consider early adoption of XBRL

Overall regulatory requirements and timing

The SEC rule and EDGAR manual contain the timing and specic

requirements for XBRL lers. The key requirements should be

communicated to the various departments that participate in the

nancial reporting process, including investor relations, generalcounsel and IT departments.

Education and assessment


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20 Addressing XBRL

Communication, coordination and education

XBRL has a fairly steep learning curve and requires a mix of

technical and accounting skills. A good starting point is to identify

an executive within the organization to serve as the XBRL point-

person, or coordinator, for the effort. For most organizations,

this individual will typically come from the companys external

nancial reporting group.

Training and education are also critical aspects in this initial step,

but they are no substitute for assembling an experienced team.

websites such as XBRL International (www.xbrl.org),

Ernst & Young (www.ey.com/xbrl) and regulatory authorities (such

as www.sec.gov) are good resources for the XBRL point-person to

start their education. Taking the time to educate key stakeholders

both internal and external on XBRL is also critical. Assembling

a core team and gaining access to the right resources and

materials are important ingredients to developing a high-level

implementation plan.

XBRL implementation approaches

There are two basic approaches to creating XBRL documents fornancial reporting, each with a range of options that need to be

considered.

Internal creation In this approach, the company creates the

XBRL les. This can be accomplished by using stand-alone, or

bolt-on, XBRL creation software and using existing reporting

formats as the source for XBRL. Another alternative is to leverage

a more consolidated process where data (including notes) is

integrated and managed from various sources to create XBRL.

This process is based on nancial information from the existing

reporting process, using developed electronic formats such as

Microsoft Excel, Word, HTML, or PDF which is then used as the

source data for creating XBRL-formatted nancials. This bolt-onprocess could evolve over time to where the XBRL-formatted

nancial statements are being generated from the organizations

nancial reporting system.

Outsourced services This approach involves different

components of XBRL implementation (e.g., project management,

XBRL tagging, XBRL creation) being outsourced to a third party

service provider with the company reviewing the results. Different

outsource rms provide varying levels of assistance. For example,

some service providers may involve company personnel actively in

the process of determining the tags used, while others may limit

company participation to the review process. Due to the technical

complexity of creating XBRL instance documents and taxonomyextensions, and the relative immaturity of XBRL software, many

users are expected to use a partial or full outsourcing model

initially. When XBRL services are not entirely outsourced, the

need for a third party advisor should be evaluated early in the

process.

Implementation approach criteria

There are six basic criteria to consider and weigh when initially

choosing between the internal or outsourced implementation

approaches. The selection of an implementation approachdepends on a companys perspective regarding which criteria are

most important:

Control How much control a company wants to have over the

implementation process; the more control you want typically

favors more of an in-house approach.

Cost The overall amount you plan to spend on implementation

and the amount of budget available for outside support;

internal resources are not without costs, however, and may

generate greater risks and/or a lower level of efciency.

Knowledge investment The level of knowledge necessary for

successful implementation of XBRL and to produce a qualityXBRL submission; what level of investments are you willing to

make to assign internal resources to do this work?

Level of effort The level of effort your personnel can

effectively devote to the creation of XBRL; in addition to

knowledge and experience, do they have the capacity?

Timing The overall timing and current status of efforts relative

to regulatory requirements; are you where you need to be or

behind in terms of timing?

Future functionality The ability of each approach to meet

future functionality needs (e.g., tagging of detail notes and

integrating creation into the nancial reporting process).

Outside support needs and internal readiness

You may want to consider the assistance of an XBRL advisor to

help in the education process and in determining the criteria for

and selecting your implementation approach. Using an outside

vendor can help provide an independent assessment of your

readiness in meeting the SEC requirements as well as developing

your plans.

It is important for an organization to assess their internal

readiness level and specic needs to meet the SEC requirements.

One helpful and time-saving step in assessing XBRL

implementation is to talk to companies who have participated inthe SECs XBRL Voluntary Financial Reporting Program (VFRP).

These participant companies can offer insights on the challenges


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and leading practices of XBRL implementation. They can also

provide feedback on the creation approach initially utilized, their

current approach and future plans on how they plan to tag notes

in detail. Participants can also share information on the various

XBRL software vendors and service providers utilized.

Consider early adoption

The old adage, practice makes perfect is usually true. Numerousorganizations have had the opportunity to practice using XBRL

through the SECs Voluntary Financial Reporting Program (VFRP),

and there is still a small window of opportunity for VFRP prior to

ling mandated submissions. The SECs rule specied the VFRP

will be closed to all new participants except for non-investment

companies at the start of the mandate. If you are unable to

participate in the VFRP, you may want to consider performing

a dry-run of the XBRL creation process prior to the mandated

period. Another option for public companies that arent required

to submit XBRL-formatted nancial statements until phase two

or three is to begin submitting in XBRL prior to the mandate. In

addition, companies might weigh the benets of detail tagging

their notes before they are required to in the second year.

Desired outcomes:

An XBRL point person, or champion, is identied to coordinate

the process.

Key stakeholders have a solid understanding of XBRL basics

and the SEC rule requirements.

An internal assessment is conducted to better understand

the impact of XBRL on the nancial reporting process,

including the identication of unique aspects that will impact

implementation.An overall company assessment is conducted, including the

interest in and ability to develop XBRL skilled resources.

An initial high-level plan is identied which considers different

implementation approaches.

A thorough consideration is made concerning the early

adoption options.

The organization looks for ways to learn from practice

submissions in XBRL before the mandate begins.

1

2 Prepare for the ruleThe second step in the process involves preparing for the specic

regulatory rule, or rules, concerning XBRL that will impact

your organization. Essentially, this step involves the following

activities:

Design and develop the XBRL creation process

Determine the specic approach and process to map nancial

information to create XBRL documents

Identify software needs and enter into agreements for tools

and/or third party service providers

Map nancials to appropriate taxonomy (e.g., US GAAP or IFRS)

and determine the level of depth of tagging with XBRL

Perform an XBRL dry-run

Design and build creation process

As previously outlined, there are two basic approaches to XBRL

implementation, or creation (i.e., internal creation and outsourced

services), each with a range of different options. Because of

the different implementation approaches and the continued

development of solutions for the market, XBRL implementation

for many companies will be an evolutionary process. In other

words, companies may start with one approach and transition

to another. As more integrated options become available, many

companies will likely move from a manual or outsourced bolt-on

model to a more automated creation process.

Determine specic approach

In preparing for the rule, the overall implementation approach

needs to be nalized (see step one for more information).

For example, in an outsourced approach, determinations

would need to be made as to which specic elements (e.g.,

project management, XBRL tagging, XBRL creation) will be

outsourced. More specic information on software and third party

considerations is outlined below.

Software selection and third party implications

XBRL is still an emerging technology. Given the size and

complexity of the XBRL US GAAP or IFRS taxonomies, companies

should select the appropriate XBRL creation software carefully.

Companies should consider the following when selecting software:

Ease of use

Costs

Training and support considerations


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22 Addressing XBRL

Compatibility with relevant taxonomies (e.g., US GAAP, IFRS)

Ability to fully extend taxonomy

Ability to tag notes in detail

XBRL and regulatory authority validation requirements

Compatibility with existing formats (e.g., PDF, Excel, HTML)

Review and validation capability

Rendering capabilities (e.g., compatibility with SEC or other

regulatory viewer requirements)

Desired level of automation (if any)

Compatibility with all aspects of the relevant taxonomy or

future taxonomies such as IFRS

A critical consideration when selecting software is full

compatibility with all aspects of the US GAAP or IFRS taxonomy,

the XBRL US preparers guidance and any SEC XBRL ling

requirements. While third party creation services are expected

to be the common method for many companies to initially create

their XBRL lings, certain considerations should be examined

before determining if the third party approach, or a specic

third party vendor, outweighs the benets of performing XBRL

tagging in-house. The preparer is ultimately responsible for XBRL

mapping and the resulting XBRL les. As a result, the preparer

should clearly outline the responsibilities of the third party to

help maintain a robust process resulting in the desired output.

Key company executives should participate in the mapping of

its nancial statements to the US GAAP taxonomy including a

detailed review of the results.

There are a number of key considerations that relate to

outsourcing with a third party, including:

A cost-benet analysis associated with the third party approach

The third partys specic knowledge of the clients business

and industry

The ability to deliver XBRL content in a timely fashion

The process and tools utilized for XBRL creation

The level of XBRL experience and expertise on the client

service team

Representations from the third party to management on the

level of validation performed on the XBRL

Map nancials to taxonomy

A key activity in this step is to determine the right XBRL taxonomy

(e.g., US GAAP, IFRS). In preparing for the rule, take the time

to review and understand the different taxonomies including

industry variations. The US GAAP taxonomy, for example, has

several different industry entry points. These entry points

represent a set of tags that have common relationships based

on industry including specic tags and variations in reporting

structures (i.e., classied vs. unclassied balance sheets). If an

organizations specic industry is represented by the taxonomy

and is appropriate for its business, companies are required to use

that taxonomy as the entry point.

The next activity is to map your nancial statement information

to the most appropriate taxonomy tags. In this step, it is

important to capture the right information including alternative

options and extension details. You may want to use a mechanism

for capturing this information, such as a structured spreadsheet

for organizing and communicating taxonomy tagging information.

This recording mechanism has the added benet of providing

a trail of the thought process and tagging decisions, including

alternative considerations.

In cases where a public XBRL taxonomy (e.g., US GAAP) does

not provide the necessary tag for an organizations nancial

statement, a tag can be created in a taxonomy extension

without altering the original taxonomy. The preparer will need to

determine if there are any needed extensions to be made to the

taxonomy to report their nancial information, and a pre

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Addressing XBRL

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