Material from XBRL Steering Committee, Wayne Harding and Rick Hayes, Ph.D.

June 26, 2005

XBRL An Introduction

the XBRL Steering Committee:Zachary Coffin (KPMG Consulting)Walter Hamscher (PricewaterhouseCoopers)Mike Willis (PricewaterhouseCoopers)Eric E. Cohen (Cohen Computer Consulting)Wayne Harding (cpa2biz.com)Louis Matherne (AICPA)

ANDProfessor Rick S. Hayes (California State University LA)

XBRL and the Emergence of ‘e-Standards’

E-Standards are fundamental to the web.HTML is the standard that opened the internet to business & personal use and

is acknowledged as the web’s first ‘Big Step.’XML is having a similar ‘Big Step’ impact in using the web for commerce.

Over 200 XML-Based Specifications and Protocols exist, including—– RosettaNet – computer company supply chain and trading webs– cXML, CBL, eCo - e-Commerce Catalogue interoperability– OBI - Open Buying on the Internet - retail e-commerce– FpML - Financial Products (Derivatives, Swaps, FX)– ACORD XML - Insurance industry information exchange standards derived from

EDI.– WAP - Wireless Access Protocol

But—XBRL has no competitors.XBRL uniquely is focused on reporting. In fact, it can enhance all other XML

standards, making them more useable to a company and its finance function.

Evolution of the Internet

TechnologyInn

ova

tio

n

FTP, E-Mail,Gopher

Web Pages

Web Services

TCP/IP HTML XML

Connectivity

Presentation

Automation

Browse the Web

Program the Web

Connect pre-Web

4920 useless results in a typical search (“IBM Fixed Assets”)

InvestorsCorp.

AccountingInformation

System

++

Report

Report

Report

Regulatory Filings

Text

Text +

TaxReturns

Statementsin Print+

Statementon Web

Text

10-KEDGAR

Today: A Convoluted Information Supply Chain

Auditor

Credit Application+

BanksText

+ +

RegulatoryFilings

Web Site

Tax Returns

Bank Filings

Printed Financials

Accounting System

Other Sources of

Information

XBRL

XBRL: Multiple Outputs from a Single Specification

RegulatoryFilings

Web Site

Tax Returns

Bank Filings

Printed Financials

XBRL

Investors

Other Parties

XBRL: Repurposing Continues

What is XML (“Extensible Markup Language”)?

The next step after HTML toward the “Second-Generation Web”Established as a standard by the W3C (World Wide Web

Consortium)Uses tags to give context and structure to the contentProvides a common way for disparate systems to exchange

specific information (application integration)Separates information from style, so a single source can be

output to any format

Platform Independent

WindowsUnixMacintoshMainframe

What Is XML: Self-Describing

Example:<DATE>July 26, 1998</DATE>

Describes the information, not the presentation. Format neutral.

The Key Is ContextThe Key Is Context

<purchase-order>purchase-order> <header-information><po-number>10932</po-number> <header-information><po-number>10932</po-number> <po-order-date>99/5/1</po-order-date><po-request-date/> <po-order-date>99/5/1</po-order-date><po-request-date/> <ordered-by-company-name>Cohen Computer <ordered-by-company-name>Cohen ComputerConsulting</ordered-by-company-name>Consulting</ordered-by-company-name>[content removed here][content removed here] </header-information> </header-information> <line-items> <line-items> <line number="1"> <line number="1"> <quantity-ordered>1024</quantity-ordered> <quantity-ordered>1024</quantity-ordered> <description-of-item>Invoices</description-of-item> <description-of-item>Invoices</description-of-item> <price-total-for-line>23.50</price-total-for-line> <price-total-for-line>23.50</price-total-for-line> </line> </line> </line-items> </line-items> <footer-information/> <footer-information/></purchase-order></purchase-order>

What Is XML: Expandable

ExtensibleWhereas HTML is fixed

<H1>, <B>, <PRE>

XML lets you roll your own <sugary-substance> <Shakespearean-character> <cash-equivalent>

Example: <Person>

<Name>Wayne Harding</Name> <Title>e-Radical</Title> <Age>38</Age></Person>

What Is XML: Tags are the key

<type>cash-equivalents</type><label>Cash and Securities</label><amount period=“2000”>10000</amount><amount period=“1999”>5000</amount>

</line-item>

balance sheet

total-assets

asset (current)

amount (2000)

$91,000,000

<balance-sheet><total-assets><asset-type="current">

<amount-period=“2000"><amount>$91,000,000

</amount></amount-period>

</asset-type></total-assets>

</balance-sheet>

What Is XML: Tags give context

Greater context to the informationTree structure is natural in XML

USERS

Externally,Creditors and suppliers Information intermediaries/aggregators Investors, analysts and advisors

Internally,Any analyst or decision-maker

– reporting financial information– evaluating the results of past economic decisions– projecting the future financial position and earnings of the

business

XBRL Working Model: Planned Specifications

ExternalFinancialReporting

BusinessOperations

InternalFinancialReporting

Investmentand Lending

AnalysisProcessesProcesses

ParticipantsParticipants

AuditorsTradingPartners

Investors

FinancialPublishersand Data

Aggregators

Regulators

XBRL for G/LJournal Entry

ReportingXBRL for

Regulatory Filings

TodayXBRL for Financial

Statements

XBRL for AuditSchedules

XBRL forTax Filings

XBRL for BusinessEvent Reporting

Software Vendors

ManagementAccountants

Companies

Two layers of XBRL:

XBRL Core Specifications (for multiple countries)– E.g., XBRL for Financial Statements

XBRL Industry-specific Specifications– E.g., XBRL for Financial Statements in Healthcare

Benefits

1. Reduce cost of analyzing and reporting financial information

2. Increase the speed and efficiency of business decisions3. Enhance the distribution and usability of existing financial

statement information

CFOs still control disclosure, but now can use XBRL to communicate with investors more efficiently No change to accounting standards Easy to do Makes investors happy

Example: Cost Reduction

International Subsidiaries:• Large multi-national corporation uses XBRL to quickly

analyze and publish the financial statements of numerous subsidiaries—

– in different countries– with different languages– using different accounting standards and practices– on different computer systems

Benefits

1. Reduce cost of analyzing and reporting financial information

2. Increase the speed and efficiency of business decisions

3. Enhance the distribution and usability of existing financial statement information

CFOs still control disclosure, but now can use XBRL to communicate with investors more efficiently No change to accounting standards Easy to do Makes investors happy

Example: Efficient Decisions

• Major mutual fund company feeds XBRL-ized information to customers to differentiate their funds as more objective and reliable investments

• An investor uses XBRL to compare the financials for a range of companies—Belonging to different revenue levelsLocated within an industry sectorAlong multiple analytical criteria

Benefits

1. Reduce cost of analyzing and reporting financial information

2. Increase the speed and efficiency of business decisions

3. Enhance the distribution and usability of existing financial statement information

CFOs still control disclosure, but now can use XBRL to communicate with investors more efficiently No change to accounting standards Easy to do Makes investors happy

Example: Credit

Loan Approval:• Small Business provides Bank with their financial information

in XBRL and receives loan approval in 1 minute instead of 2 days

Credit Approval:• Company approves customer credit request with automated

assessment processes facilitated by XBRL

Line of Credit:• Company provides capital markets with financial information

in XBRL and receives expedited line of credit

Features of XBRL

A common data format for many software applications and many types of reporting

<group entity=“BigCo” units=“USD” type=“revenues” scale=“6” > <item period=“1998”>100</item> <item period=“1997”>95</item></group>

Importing data into

spreadsheets

Creating required SEC filings

Displaying financial statements on the web

Collecting reports from subsidiaries and JVs

What it is

Features of XBRL

A common data format for many software applications and many types of reportingA shared data item taxonomy always grounded in existing accounting standards

US GAAP C&IP Type Taxonomy (Fragment)· Current Assets (+)

· Cash and Cash Equivalents (+) · Short term investments (+)

· Marketable securities (+) · Available for sale (+) · Held to Maturity (+) · Trading (+)

· Receivables (+) · Accounts Receivable-Trade net (+)

· Accounts Receivable-Trade (+) · Allowance for Bad Debts (-)

· Receivables - Leasing (+) · Notes Receivables (+) · Other Receivables (+) · Contract receivables (+) · Unbilled receivables (+) · Retention (+) · Income tax (+) · Finance receivables (+)

What it is

Features of XBRL

A common data format for many software applications and many types of reportingA shared data item vocabulary always grounded in existing accounting standardsAn extensible language that can preserve the uniqueness of any company’s reporting

NE MedCorp: Type Taxonomy· Net Income (+)

· Revenues (+)· Patient Billings (+)· Ambulatory Patient Billings (+)

· Expenses (-)· Staff Salaries (+)

· Physician Salaries (+)· Support Staff Salaries (+)

NE MedCorp: Entity Taxonomy· New England Medical Corporation

· Massachusetts General· Brigham and Women’s Hospital· Longwood Medical Center

What it is

Who benefitsTechnical Benefits:Leveraging Web and e-Commerce Standards

Specification license will be freeVendor neutrality of XML facilitates interface with any third party

systemsEnables and extends relational database functionality for all

business reporting dataEnhances XML-enabled wide area search

A fragment of XBRL: Taxonomy

<?xml version="1.0" encoding="utf-8"?><schema xmlns:xbrl="http://www.xbrl.org/core/metamodel" xmlns:html="http://www.w3.org/1999/xhtml" targetNamespace="http://www.xbrl.org/us/us-gaap-ci-2000-07-

31.xsd">

...<element name="salesRevenueGross.revenueFromAffiliates" type="monetary"><annotation><appinfo><xbrl:rollup to="salesRevenueNet.salesRevenueGross" sense="add" order="3" /><xbrl:label xml:lang="en">Revenue from Affiliates</xbrl:label></appinfo></annotation></element>...</schema>

What it is

A fragment of XBRL: Instance

<?xml version="1.0" encoding="utf-8"?>...<group type=“grossProfit.salesRevenueNet”>

<item period="1999-05-31">8671</item><item period="1998-05-31">11358</item><item period="1997-05-31">14484</item>

</group><group type=“operatingProfit.operatingExpenses”>

<item period="1999-05-31">5612</item><item period="1998-05-31">6487</item><item period="1997-05-31">8070</item>

</group> <group type=“grossProfit.costOfGoodsAndServicesSold”>

<item period="1999-05-31">1188</item><item period="1998-05-31">1085</item><item period="1997-05-31">1197</item>

...</group>

Another fragment of XBRL

<?xml version=“1.0”?>...

<item type=“statements.notesToFinancialStatements”/><item

type=“notesToFinancialStatements.significantAccountingPoliciesNote”/>

<item type=“significantAccountingPoliciesNote.consolidationPolicy”/>

<item type=“consolidationPolicy.allWhollyOwnedSubsidiaries”>The financial statements include the accounts of SquigglyCo and its subsidiaries. Significant inter-company transactions and balances have been eliminated. Investments in 50% owned joint ventures are accounted for using the equity method; the Company's share of joint ventures’ activities is reflected in other expenses.</item>

What it is

Navision implementation of XBRL

Roll-out of XBRL Financial Statement Specifications

US GAAPCommercial & Industrial

(C&I) Companies

US GAAPCommercial & Industrial

(C&I) Companies

Canadian GAAPCommercial & Industrial

Companies

Canadian Acctg.Commercial & Industrial

Companies

Australian GAAPCommercial & Industrial

Companies

Australian Acct.Commercial & Industrial

Companies

IASCommercial & Industrial

Companies

IASCommercial & Industrial

Companies

……

US GAAPFinancial Services

Companies

US GAAPFinancial Services

Companies

Canadian GAAPC&I, extended to

Software Companies

Canadian Acctg.C&I, extended to

Software Companies

US GAAPC & I, extended to

Software Companies

US GAAPC & I, extended to

Software Companies

US GAAPC & I, extended to

Media & Entertainment

US GAAPC & I, extended to

Media & Entertainment

……

…… ……

…… …… ……

…… …… …………

Financial Reporting Standards - Different Jurisdictions

Industry Sp

ecific

Australian Acctg.C&I, extended to

Software Companies

Today

Within FY00

XBRL Working Model: Strategic Direction

InternalFinancialReporting

ExternalFinancial

Reporting

InternalBusiness

OperationsReporting

ExternalBusiness

PerformanceReporting

InternalExternal

FinancialFinancial

OperationalOperational

Today:XML Rendering

of existing Acctg.Reporting Standards

Future:XML supporting

StandardizedBusiness Event

Vocabularies

Near Future:XML supporting

G/L LevelInformationExchangeStandards

Far Future:XML supporting

Emerging BusinessPerformance

Metrics

Additional Information

Useful References CFO Magazines article, “How the Web was Won” about Online IR

– http://www.cfonet.com/html/Articles/CFO/2000/00FEhowt.html Scientific American article, “XML and the Second-Generation Web”

– http://www.sciam.com/1999/0599issue/0599bosak.html FASB’s Electronic Distribution of Business Reporting Information

– http://www.rutgers.edu/Accounting/raw/fasb IASC’s Business Reporting on the Internet

– http://www.iasc.org.uk/frame/cen3_26.htm XBRL Website

– http://www.XBRL.org

For additional information, please contact

Zachary Coffin, Liaison Chair(213) 955-8508 or zcoffin@kpmg.com

Louis Matherne, AICPA(212) 596-6027 or Lmatherne@aicpa.org