8/8/2019 Addressing XBRL
1/36
Addressing XBRLMoving business and nancial reporting
into the digital age
8/8/2019 Addressing XBRL
2/36
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
10
18
32
06
14
30
26
02
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
8/8/2019 Addressing XBRL
3/36
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.
8/8/2019 Addressing XBRL
4/36
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.
8/8/2019 Addressing XBRL
5/36
3Moving business and nancial reporting into the digital age
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
8/8/2019 Addressing XBRL
6/36
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.
8/8/2019 Addressing XBRL
7/36
5Moving business and nancial reporting into the digital age
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.
8/8/2019 Addressing XBRL
8/36
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
8/8/2019 Addressing XBRL
9/36
7Moving business and nancial reporting into the digital age
[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.
8/8/2019 Addressing XBRL
10/36
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.
8/8/2019 Addressing XBRL
11/36
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.
8/8/2019 Addressing XBRL
12/36
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.
8/8/2019 Addressing XBRL
13/36
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
11Moving business and nancial reporting into the digital age
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.
8/8/2019 Addressing XBRL
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.
8/8/2019 Addressing XBRL
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
Moving business and nancial reporting into the digital age 13
8/8/2019 Addressing XBRL
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.
8/8/2019 Addressing XBRL
17/36
15Moving business and nancial reporting into the digital age
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
8/8/2019 Addressing XBRL
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.
8/8/2019 Addressing XBRL
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
Moving business and nancial reporting into the digital age 17
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.
8/8/2019 Addressing XBRL
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.
8/8/2019 Addressing XBRL
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
Moving business and nancial reporting into the digital age 19
30-day
grace
period
3 months prior
to rst submission due
6 months prior
to rst submission due
9 months prior
to rst submission due
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
8/8/2019 Addressing XBRL
22/36
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
8/8/2019 Addressing XBRL
23/36
21Moving business and nancial reporting into the digital age
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
8/8/2019 Addressing XBRL
24/36
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