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Tax Data Collection and Other Nightmares
XBRL GL, the Journal Taxonomy, Today
Internal Reporting Track, November 5, 20038th XBRL International Conference, Seattle, Washington, USA
Eric E. Cohen, [email protected]
Taxpayer Accountant Agent AuditFollowing up with IRS
Results
Audit Process Today
I want to be able to access the underlying detail to prove what you have
reported!
I don’t want you to have that access –
but I want to be able to get that
information myself!
My life would be easier if the client’s detail automatically populated my write-
up software.
Individual Income
Sales
Total Taxes
Property
Employment
All Others
Corporate Income
Agencies Focus in on Tax Filing
But … Is Everything on the Level?
Regulator
RegulationsNewsInstructionsFiling formatsReference
Service
CLIENTCLIENT
filing format
Regulator Service Extranet 3rd Parties Regulator
Software developers
Organizer
GuidanceChecklistsPractitioner Aids
TradingPartners
OtherRegulators
TheMarket
Lenders
IntegratedNon-integratedOutsourcesASP
Supp InfoForms
Supp InfoForms
Supp InfoData
Submits
Receives
Division Level
Extract
MergeData
Group LevelDepartment LevelParticipants
Processes
MaintainDefinitions
CollectData
DistributesSupp Info
Forms
Supp InfoData
Dept Detail
ReceivesSend
RequestsPrepareReport
Submits
Query
FindSources
CongressTreasuryTax Policy Analysts
Holistic = Win-win-win? Format useful to tasks other than tax audit
Consolidation (drill down from tax audit) Movement to internal/external auditors Movement to budget/forecast Standard format for ASP marketplace
Dealing with Taxes Direct Indirect
Data Transfer File Needs to Serve ONE TOOL
Consolidation tool across systems Feeder for management systems Tool for internal and external auditors
Audit Tax
Electronic Audit Trail from source to final Paper source Electronic source
SIMPLE ENOUGH FOR ALL
Shared Needs for Direct and Indirect Taxes
People
Accounts DocumentsResources
Entries XBRL
Depreciation
Tax specific entries
Tax specific accounts
Standards: Benefits to Firms Small and Large Smaller firms
Internal integration – transparent, simple Integration with CPA tax systems
Large company Preparation
Consolidation Audit trail
Filing Format Transport
Integration with financial statement preparation Tax Note
Research, cross organization analysis of effects of changes
To Meet The Need: XBRL GL XBRL GL, the Journal taxonomy
Integrates accounting systems Provides detail later summarized in
Financial reporting Tax Performance
Represents almost anything categorized to "accounts“ Customer and vendor master file information Detail journals Information represented in US, Japanese or European
general ledger packages
Why is XBRL GL Needed?
Different Data Dictionaries: Field names, field order
System 1: AccountNo, Amount, Date
System 2: MonetaryAmount, PostDate, AccountNumber
System 3: PostingDate, Account#, Value
System 4: Date, Journal, Account, Amount
Similar Data
Account, Amount, Date
Different Representations for the same concepts in common data field
Journal: PJ, Payroll Journal, Payroll
Date: 12-31-03, 20031231, 12/31/03
Different
Data Formats
CSV
ASCII
WKS
XBRL GL Spans the GAP
Different Data Dictionaries: Field names, field order
System 1: AccountNo, Amount, Date
System 2: MonetaryAmount, PostDate, AccountNumber
System 3: PostingDate, Account#, Value
System 4: Date, Journal, Account, Amount
Similar Data
Account, Amount, Date
Different Representations for the same concepts in common data field
Journal: PJ, Payroll Journal, Payroll
Date: 12-31-03, 20031231, 12/31/03
Different
Data Formats
CSV
ASCII
WKS
XBRL GL provides platform for agreed-upon and well defined list of concepts –
make sure my “Account” and your “Account” means the same thing (not
bank account or customer account but GL account.)
Based on XML, XBRL GL is order independent; sharing element names
for import/export means that AccountNo, AccountNumberm
Account# and Account will all be express as one common name;
applications will know what to expect inpublishing and consuming data files.
So many external data formats; XML provides a popular and increasing
supported / demanded data format.
Once you have agreed on data field standardization, software applications require agreement on content in many cases. XBRL GL provides enumerated
values to supplement XML data standards to help in this area.
Proprietary Formats: XML Alone
qbxml
smbxml
Intacct xml
SAP
Peoplesoftxml
qbxml
smbxml
Intacct xml
SAP
Peoplesoftxml
Oracle
Standards-based Data Interchange
XB
RL
GL
qbxml
smbxml
Intacct xml
SAP
Peoplesoftxml
qbxml
smbxml
Intacct xml
SAP
Peoplesoftxml
OracleIndustry transactional XML
XBRL GL Can Represent The chart of accounts, representing both posting accounts and
customers, vendors, or other items that may be assigned an account in an international sense of the word;
Journal entries, both from subsystems and within the General Ledger or financial reporter;
Document summaries, with generic representations of the information that is presented on standardized business documents;
Descriptions of customers, vendors, employees and banks, either in connection with the chart of accounts (European style) or independently (US style);
Descriptions of inventory items, performance metrics or other quantifiable items;
Status documents, including listings of receivables still owing, payables yet owed, inventory in stock, as well as
Standard accounting summaries such as trial balances, “general ledger”, source journals and other accounting-oriented summaries.
XBRL GL Fills the GAPS between GAAPS
BUSINESS
Investors
Aggregators
Regulators Creditors LendersTax Website
Transaction Creation
ERP G/L Packages CRM
•Orders•A/P•Delivery
Customers•Orders•A/R•Delivery
2-way2-way
Suppliers
Oneway
Oneway
XBRLBUSINESS REPORTING
(e-)BusinessX12, EDIFACT, XML INITIATIVES
XBRL GLJournal Taxonomy
DetailAccountingrecognition/classification
Intra system Detail to summary
From Bar Coded Transactions through … Transactions (eCommerce) Accounting entries and adjustments
Estimates, allocations, eliminations Management, accountant entries
I N V O I C E May 2, 2003Invoice #: 10037
Item Description Qty Extension
1078 Blue Widget 200 2,803.781083 Cyan Widget 100 1,402.93
Sub-total: 47,592.33Freight:Total: 47,592.33
<documentType>invoice</documentType>
<documentNumber>10037</document Number>
<documentDate>2003-05-02</documentDate>
Uses Of XBRL GL
AccountingSystem
Budget
AccountingSystem
A
AccountingSystem
B
Chart of Accounts
Customers, Vendors, Employees
Open AR, AP, Inventory Status
Journal Entries, Ledger History
AccountingSystem
CPA
Trial Balance
Adjustments
One Vocabulary
One Framework
Concluding One format From initial entry through the information supply
chain Facilitating audit Reducing compliance burden With international agreement and usage Facilitating a universal audit trail Facilitating write all, black box, audit trail report Providing integration for management and
beyond
After the Audit
Questions? Eric E. Cohen
PricewaterhouseCoopers [email protected] (585) 271-4070
Find out more www.xbrl.org www.pwcglobal.com/xbrl
<xbrl>
Eric E. [email protected]