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XBRL In the Classroom
The Time is Now
Presented by Neal Hannon, Bryant College
What is the business problem ?
Is XBRL right for the classroom today ?
The crux of the problem for business is to develop a comprehensive system that is
• All inclusive and • Transparent to the user
YES IF
XBRL will soon become a dominant method of handling business reporting
Other areas of business are also moving to XML enabled information. (HR, CRM, ERP, Insurance, etc.)
The Case for XML..
XML - a computer markup language that is extensible (flexible XML - a computer markup language that is extensible (flexible … can be added to)… can be added to)
XML is actually a bare-bones set of syntax rules to markup XML is actually a bare-bones set of syntax rules to markup any kind of text and dataany kind of text and data
XML provides the structure of the text or dataXML provides the structure of the text or data XML describes to humans & to computers what the data is XML describes to humans & to computers what the data is
… not how to display it… not how to display it
XML has become the fastest growing technology for information transportation and exchange the world of computing has ever seen.
Business Integrator Magazine says that nearly nine out of every ten enterprises claim that XML will be and important technology for their IT strategies over the next year
The Case for XBRL…
The purpose of XBRL is “to enhance the flow of financial information through the creation of a globally useful language in which to describe financial facts and concepts.” David vun Kannon
XBRL is uniquely positioned to Provide mobility and transportability
to financial and business facts.
Students in AIS, Advanced Accounting,Auditing, Consolidations,
Mergers, Tax, Not-for-Profit will all be affected by XBRL
The Case for XBRL…
I would like to see you take your XBRL project a step further, providing
account classifications for companies in Common industries. In short, I challenge
you to turn all of this data into meaningful information for investors
Arthur Levitt, Former Chairman, SEC
The Case for XBRL…
SEC Chairman Pitt complains that financial Reports are backward-looking, hard to
understand, and don't highlight the Information investors need. Some of the
improvements he is considering:
SLICE `N' DICE
Accountants are developing XBRL, a way of coding financial reports on the Internet,
that will let investors download and manipulate companies' numbers any way they like
Business Week, November 5, 2001
The Case for XBRL
Students will need to collect, interpret andreport data in many different XML dialects
XBRL provides a bridge not only to financial statements, but to all business reporting.
XBRL Business Uses
The internal use of XBRL is just Beginning to be explored, broughton by XBRL for General Ledger in
public beta. New XBRL releases are compliant with the latest version
of W3C’s XML Schema
Internal Uses include:Account analysisBalanced Scorecard
Automated exception reporting
Wireless, PDACell Phone
XBRL Business Uses
External Uses include:SEC FilingsIRS and State Tax Filing
Annual Reports Creditor Reports
Wireless, PDACell Phone
Externally, XBRL focuses on theproduction of GAAP financial statements for the business financial reporting supply chain. The externalfocus of XBRL is evident by theheavy participation in XBRL.org bythe AICPA and Big 5 Accountingfirms
XBRL International
International Accounting Standards and Major Countries arechanging the way Accounting is conducted world-wide
Hot spots of development include Australia, Singapore, Germany, Japan, followed by Canada, the Netherlands, Spain, South Africa,Hong Kong, Great Britain, and theScandinavian countries.
Stig Enevoldsen
(Chairman IASC) September 1998
“The fact is that we not only speak different accounting languages but
also give different interpretations of the same events and transactions……
“I believe that the best way forward in accounting is to converge towards one
single world-wide accounting language.”
Sir David Tweedie (current IASB Chairman)
The mission of the newly-created IASB The mission of the newly-created IASB
……isis to increase the transparency of financial reporting byto increase the transparency of financial reporting by achieving a achieving a single, global method of accounting for transactions -- whether in single, global method of accounting for transactions -- whether in Stuttgart, Sydney, Seattle or Singapore.Stuttgart, Sydney, Seattle or Singapore.
Need to define
One Accounting Language
One Transaction Methodology
Within the IAS Financial Reporting Framework
To achieve the objectives of High Quality Transparent Comparable
Financial Statements
IAS Philosophy Implications
The Vision
To produce
High quality, Transparent, Comparable,General Purpose Financial Reporting
to
International Accounting StandardsUsing one accounting languageOne transaction methodology
Which are useful for making economic decisions.
The Vision for XBRL is no different!
Just do it
Electronically
in a binary environment
With the Seamless Transfer
Of Financial Information
In a known state
Without
Human Intervention
Accounting
Specification & Design
One accounting language One transaction methodology
One presentation methodology
to define all the facts required
on an inclusive exclude basis
for a binary environment for the seamless transfer of Financial Information in a known state
without Human Intervention
The One Accounting Language Challenge
Language System of words & rules of a particular community
ObjectiveUnambiguous globally understandable classifications
Accounting classificationsBy nature and class
Scientifically extensibleA place for everything and everything in its placeTo classify items as yet unknown
Absolute precisionBinary environment no room for judgmentFact definition increases exponentially as judgment is eliminated
Mountain Zebra Hartmans Zebra
ZEBRAS
Plains Zebra Quagga
Bergzebra Pyjama Donkey
ZEBRAS
Steppenzebra Kwagga
Zebra
(Equus Zebra Zebra) (Equus Zebra Hartmannae )
(Equus Quagga) (Equus Quagga Quagga)
Grevy’s Zebra
(Equus Grevyi )
Many Human Presentations One Fact in XBRL one fact with many labels For example profit / non profit organizations
One Accounting Language Lessons Learned
Scientific language of accounting definesa conceptual structure for the language accounting facts within conceptual structure
Names facts for information contentEnterprise InformationValue informationQualitative information
Spoken language or Skins – same fact different labelseconomic - profit / non profit
- public entity vs private enterprisegaap - different countrieslanguages - dialects
Establish facts then resolve labelsRequest fact clarification from IAS where ambiguous or undefinedManage fact convergence and label convergence separately
Financial Data tagged in XBRL
IRS
Annual Report
SEC
FinancialAnalysts
ManagementTeam
Style sheets
XBRL: Tag Once, Report Many Times
What software ‘sees’ is the differentiator and drives benefits
Transaction Details
Financial System
No Direct Connectionwith Details XBRL-enabled
Financial Statements
Note: Without XBRL-GL, the connection from XBRL-enabled financial statements to transactional data stops at the financial system
DrillDown
Do You Need to Teach XML?
Yes No
• Basics of XML are needed to understand how business events are captured and stored
• XML basics can be self-taught or self-directed over the Web
• XBRL is valid XML
• This is Accounting, not computer science
• I don’t have the time to teach XML, I need to learn it first.
• XBRL will soon go “under the covers” so I can ignore it.
XBRL Market Activities• MSDW SEC EDGAR filing• Singapore and Australia efforts• XBRL Academic Competition• “XBRL Essentials” and “Introducing XBRL:
Decision Making in a Digital Economy”• Vendor support for XBRL• Jurisdictional Activity/Status
Vendor Implementations• ACCPAC
• CaseWare
• Creative Solutions
• e-Numerate
• eKeeper
•KPMG’s “Columbus”•KPMG Consulting•Navision•Newtec•PPC•XBRL Solutions•SAP•FRS (South Africa)•FRx (Microsoft)•Hyperion•IBMATRIX
XBRL Media Summary213 articles for 12 months ended August 31, 2001
generating over 36 million impressions1
Equivalent to over $6.1 million in annual advertising2
Generated stories in major financial publications: CFO, American Banker, Times of London, Barron’s, Financial Executive, Financial Times, Financial Director, Securities Industry News, Securities Week, Wall Street + Technology, Pensions & Investments
Secured major wire stories: Dow Jones, Bloomberg, Reuters, Newsbytes News, ABIX
24 total news releases issued by Consortium and AICPA
1-Does not include wire stories or Web stories which have virtually limitless impressions. 2-Based upon ad dollar equivalents extrapolated for a one-year period; does not include ad dollar equivalents for wire stories or Web stories.
Books, Articles, Videos
• XBRL Essentials, Hoffman and Strand, June 2001
• Introducing XBRL, Hannon and Coffin, January 2002.
• AICPA E-business Update Video and Workbook, 2001.
• IMA National Conference Video
• Over 300 Articles, Special Section in Strategic Finance Magazine (June 2001), Monthly XBRL Column
• SoftwareAG XML video www.softwareag.com
XBRL Tools
• Essentials include taxonomy builders, tools that map output to XBRL, style sheets for display.
