XBRL: The Basics

Glen L. Gray, PhD CPADepartment of Accounting & Information SystemsCalifornia State University Northridge

Symposium on Information Systems AssuranceIntegrity, Privacy, Security & Trust in an IT Context

October 20-22, 2005

Nerd Nerd Alert!!Alert!!

OverviewOverview

Pre-XBRL history

The basic problems

What is XBRL and how does it work

A Brief HistoryA Brief History

1969: Al Gore invents the Internet 1994: Commercialization of the Internet 1999: FASB and IASC each publish reports on financial

reporting on the Internet Most large companies are including financial reporting

information on their Web sites No consistency in terms of content, format, and navigation Probably violating reporting regulations! (Still true?) Boundary problems (In or out of financials?) Automated searches almost impossible

October 1999: First XBRL meeting with 13 members 2005: The XBRL consortium has over 350 members—

and still growing

The Basic ProblemThe Basic Problem

2004 2003

Sales $ 145 $ 132

Cost of Goods Sold 101 92

Gross Profit 44 40

Sales, general, and administrative

10 8

Net Income $ 34 $ 32

GrayCoIncome Statement (Audited)Year ended Dec 31, 2004

(millions)

The Basic ProblemThe Basic Problem

Electronic business and financial information is usually transmitted in human readable form (e.g., SEC filings: 10-Ks, 10-Qs, etc.) Analysts spend 80% of their time extracting and

preparing data for subsequent analysis Would need a very intelligent AI parser to automate

data extraction But ad hoc reporting would baffle parser

A Potential SolutionA Potential Solution

Tag every piece of data (XML, not XBRL yet)

<CostOfGoodsSold currency=“USD” FiscalYear=“2004” scenario=“audited”>101000000</ CostOfGoodsSold >

Intelligence built into data (parsing is easy) Map once, use many

For analysis For different reporting requirements For different formatting requirements

Free lunch? Bigger files Tags pose security risk

A Remaining ProblemA Remaining Problem

Company Property, Plant and Equipment

Sales Cost of Goods Sold

Staples Total property and equipment

Sales Cost of goods sold and occupancy costs

ExxonMobil Property, plant, and equipment, at cost, less accumulated depreciation and depletion

Total revenue and other income

Crude oil and product purchases

Intel Property, plant and equipment, net

Net revenue Cost of sales

Amazon.com Fixed assets, net Net sales Cost of sales

IBM Plant, rental machines and other property

Total revenue Total cost

Wal-Mart Property and equipment, net

Net sales Cost of sales

Some XBRL TermsSome XBRL Terms

2004 2003

Sales $ 145 $ 132

Cost of Goods Sold 101 92

Gross Profit 44 40

Sales, general, and administrative

10 8

Net Income $ 34 $ 32

GrayCoIncome Statement (Audited)Year ended Dec 31, 2004

(millions)

Label

Context Scenario

Attribute

Value

What is XBRLWhat is XBRL

XBRL stands for the eXtensible Business Reporting Language.

Uses XML technology

XBRL consists of “tags” that correspond to the concepts and information included in financial reports such as balance sheets and income statements.

XBRL can be thought of as a “Bar Code” system for financial information, allowing financial statements to be read and understood by a computer.

How does it workHow does it work XBRL Specification

(Published by XBRL International)

Taxonomies Extension Taxonomies

Instance DocumentsInstance

Document

XBRL Specification

Taxonomy

TaxonomiesTaxonomies

A Taxonomy is a dictionary of financial reporting terms or concepts

Separate Taxonomies – also referred to as “Core” or “Building Block” taxonomies are developed for different reporting purposes such as US GAAP, IFRS, bank regulatory reporting. etc

The concepts captured in a taxonomy are referred to as ELEMENTS. These Elements form the core of XBRL.

Anatomy of an XBRL ElementAnatomy of an XBRL Element

XBRLElementXBRL

ElementFinancial

Reporting ConceptFinancial

Reporting Concept

XBRLElementXBRL

Element

Basic AttributesBasic Attributes

RelationshipsTo other Elements &

Information

RelationshipsTo other Elements &

Information

Anatomy of an XBRL ElementAnatomy of an XBRL Element

XBRLElementXBRL

Element

Basic Attributes

Basic Attributes Data type Data type

Balance TypeBalance Type

Period typePeriod type

DescriptionDescription

Name (i.e. XBRL “Tag”)Name (i.e. XBRL “Tag”)

LabelLabel

Monetary / String, etc.Monetary / String, etc.

Debit / CreditDebit / Credit

Instant / DurationInstant / Duration

“Amount paid in excess of the value assigned to the identifiable net assets acquired”.

“Amount paid in excess of the value assigned to the identifiable net assets acquired”.

IntangibleAssetsGoodwillIntangibleAssetsGoodwill

e.g. - “Goodwill”e.g. - “Goodwill”

Anatomy of an XBRL ElementAnatomy of an XBRL Element

XBRLElementXBRL

ElementPublisher : FASBName : Statement of Financial Accounting Stand.

Number : 142Paragraph : 23URI : http:/www.fasb.org/pdf/fas142.pdfURIDate : 2004-08-01

Publisher : FASBName : Statement of Financial Accounting Stand.

Number : 142Paragraph : 23URI : http:/www.fasb.org/pdf/fas142.pdfURIDate : 2004-08-01

Net Goodwill = Goodwill – Accumulated AmortizationNet Goodwill = Goodwill – Accumulated Amortization

Anatomy of an XBRL ElementAnatomy of an XBRL Element

RelationshipsTo other Elements &

Information

RelationshipsTo other Elements &

Information

CalculationCalculation

PresentationPresentation

ReferenceReference

Assets Cash & cash equivalents Property plant & equipment GoodwillTotal Assets

Assets Cash & cash equivalents Property plant & equipment GoodwillTotal Assets

Current Taxonomies @ Current Taxonomies @ XBRL.ORGXBRL.ORG

COUNTRY / JURISDICTION

TAXONOMY SPECIFICATION LEVEL STATUS

Canada GAAP Primary Financial Statements 2.1 Ack Draft

Germany AP Commercial and Industrial 2.0 Ack Final

IASB IFRS General Purpose, 2004 rules 2.1 Ack Final

  IFRS General Purpose, 2003 rules 2.1 Ack Draft

Korea GAAP Primary Financial Statements 2.0 Ack Draft

New Zealand  GAAP Commercial and Industrial 2.1 Ack Draft

United Kingdom GAAP Commercial and Industrial 2.1 Ack Draft

United States GAAP – Commercial and Industrial 2.1 App Final

  GAAP – Banking and Savings 2.1 App Final

  GAAP – Insurance 2.1 App Final

     SEC Certification 2.1 App Final

  Management Report 2.1 App Final

  Accountants Report 2.1 App Final

  MD&A 2.1 App Final

    GAAP – Investment Management 2.1 Ack Draft

U.S. Financial Reporting Taxonomy FrameworkU.S. Financial Reporting Taxonomy Framework

Extension TaxonomiesExtension Taxonomies

Extension Taxonomies allow a company to create and customize concepts and elements for their particular reporting practices.

Extension taxonomies import then build on, or “extend” the Core or Building Block taxonomy.

They allow for the addition of entity specific elements and the customization of element relationships.

US GAAPPrimaryTerms

US GAAPFS

Terms

Taxonomies and Extensions can be Taxonomies and Extensions can be thought of as the building blocks for thought of as the building blocks for XBRL reportingXBRL reporting

US GAAPBank Terms

First Raleigh BankTerms

Foundation terms

Industry Terms

Company Specific Terms

Closer Look at TaxonomiesCloser Look at Taxonomies

Discoverable Taxonomy Set (DTS)

Instance Document

XBRL Specification

TaxonomySchema

LabelLinkbase

ReferenceLinkbase

DefinitionLinkbase

CalculationLinkbase

PresentationLinkbask

Even Closer Look at Even Closer Look at TaxonomiesTaxonomies

Discoverable Taxonomy Set (DTS)

Instance Document

XBRL Specification

Presenta-tion

Linkbase

CalculationLinkbase

Standard Taxonomy

TaxonomySchema

LabelLinkbase

ReferenceLinkbase

DefinitionLinkbase

CalculationLinkbase

PresentationLinkbask

Extension Taxonomy

TaxonomySchema

LabelLinkbase

ReferenceLinkbase

DefinitionLinkbase

CalculationLinkbase

PresentationLinkbask

Instance DocumentsInstance Documents

An Instance Document is your XBRL financial report

Instance Documents will include• Values (ex. numbers, blocks of text etc)

• Tags to identify the values

• Taxonomy references – Telling you where the tags are defined

• Context – Information describing the reporting entity and period

• Units/Measure – Information on unit of measure, currency etc.

InstanceInstanceEx.. –Company Extension , USFR Commercial and Industrial

Ex.. –Company Extension , USFR Commercial and Industrial

$1,500,000$1,500,000

“Basics”“Basics”

ValuesValues

TagsTags

Import TaxonomyImport Taxonomy

<usfr-pt:CostGoodsServicesSold precision="INF" contextRef="Qtr_Dur_063004" unitRef="USD">

1500000 </usfr-pt:CostGoodsServicesSold >

<usfr-pt:CostGoodsServicesSold precision="INF" contextRef="Qtr_Dur_063004" unitRef="USD">

1500000 </usfr-pt:CostGoodsServicesSold >

Anatomy of a Instance DocumentAnatomy of a Instance Document

ContextsContexts

Scenario Scenario

SegmentSegment

PeriodPeriod

IDID

Audited, Pro-forma, RestatedAudited, Pro-forma, Restated

Financial Printing, Outsourcing etc.Financial Printing, Outsourcing etc.

Instant: As of 12/31/04Start/End: 1/31/03 – 12/31/04

Instant: As of 12/31/04Start/End: 1/31/03 – 12/31/04

USD USD

Anatomy of an Instance DocumentAnatomy of an Instance Document

MeasureMeasure Currency: USD, EUR, SharesCurrency: USD, EUR, Shares

UNITUNIT

FootnotesFootnotes (2) In 2003, gain on sale of building of $2.7 million, net of taxes of $0.9 million. (2) In 2003, gain on sale of building of $2.7 million, net of taxes of $0.9 million.

XBRL TaxonomyCreated by XBRL Consortium

Consumed

Rendered

XB

RL

Cre

ati

on

XBRL DocumentCreated by Preparer

Company Financial Statement

TAGGING

AT 101 Assurance

Marking Up DataMarking Up Data

Tagging financial statements is as

simple as selecting a value from a task pane and dragging and dropping them

onto the Word/ Excel data to be

tagged.

System 3System 1

Identificador de la Cuenta

Descripción Principal de la Cuenta

Monto Monetario

Fecha de Asignación/Ingreso

Account Number

Account Description

Entry Amount

Posting Date

Account#

Description

Amount

PostDate

System 2

accountMainID

accountMainDescription

amount

postingDate

accountMainID

accountMainDescription

amount

postingDate

accountMainID

accountMainDescription

amount

postingDate

XBRL GL XBRL GLXBRL GL

The Answer - XBRL GLThe Answer - XBRL GL