Sap Insider Webinar With Deloitte 10dec09 Final

XBRL is comingIs your company ready?

Scott RosenfelderDirector - AERS Technology & Knowledge Management, Deloitte & Touche LLP

Philip MugglestoneDirector - Solution Marketing, SAP

Jennifer MaddoxDirector - Solution Marketing, SAP

December 10, 2009

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Agenda

1. The impact of XBRL on group financial reporting

2. Overview of SAP® BusinessObjects™ XBRL Publishing by UBmatrix

3. Demonstration

4. Summary and next steps

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Agenda



3. Demonstration


© 2009 Deloitte Touche Tohmatsu

XBRL Basics

XBRL (eXtensible Business Reporting Language) is a language for electronically communicating business and financial data

• Based on XML, a widely-used Internet standard

• Uses standardized “tags” that correspond to concepts and information included in financial reports

• Facilitates automated retrieval and analysis of financial data


The Benefits of XBRL in a data world

Improves efficiency and reduces cost of data collection and analysis

• Move from static, text-based data to “interactive data” that can be dynamically searched and analyzed

• Reduces or eliminates error-prone manual data entry

• Enables high value analysis of data vs. low value compilation of data

Simplifies comparison of financial and business performance across companies, reporting periods and industries


Benefits of XBRL in business reporting

Common goals of many corporate finance functions map directly to the potential benefits of XBRL which companies may consider leveraging for their business reporting processes

Common goals for a corporate finance function:

• Reduced costs

• Stronger internal controls

• Timely and accurate data

• Standardized systems, business processes and data elements

• Seamless data exchange between business units

Potential XBRL benefits

• Cost savings, efficiency, and improved accuracy and reliability

• Transparency

• Enhanced business reporting and standardization

• Paperless environment

• SOA architecture for interoperability

© 2009 Deloitte Touche Tohmatsu© 2009 Deloitte Touche Tohmatsu

The SEC Mandate

The SEC published rules requiring the use interactive data to improve financial reporting on April 13th, 2009Highlights of the ruling:

• Require most registrants to submit XBRL-formatted financial reports and schedules as an exhibit

• Requirement is phased-in over three years, with largest registrants having to provide interactive data in filings for periods ending on or after June 15, 2009

• 30-day grace period for each initial filing of interactive data

• For most registrants, the first XBRL filing will be 10-Q, 20-F or 40-F‒ Registrants do not have to start with the 10-K


Then SEC Phase in Timeline

Large accelerated filers

• Domestic and foreign• Filing using U.S. GAAP, and• Having a public float>

$5 billion

Periods ending on or after June 15, 2009

Registrant Category Effective Date

Large accelerated filers

• Domestic and foreign• Filing using U.S. GAAP, and• Having a public float between

$700 million and $5 billion


Most other registrants including

• Smaller companies filing using U.S. GAAP

• Foreign private issuers reporting using IFRS


YEAR 1

YEAR 2

YEAR 3


Some Filing results so far and challenges ahead…

• FY ending 6/15/2009 ‒ Mandated Participants - Public companies using US-GAAP ("accelerated filers") with >$5B

market capitalization‒ Result - 427 companies - 871 10-Q filings so far

• FY ending 6/15/2010‒ Mandated Participants - All other "large accelerated filers“ using US-GAAP ‒ Expected Result – an additional 1500-2000 companies

• FY ending 6/15/2011 and thereafter‒ Mandated Participants - All public companies, including “foreign private issuers” using

either IFRS or US-GAAP‒ Expected Result – an additional 10,000 companies

• Mandate on Tagging Detail‒ FS footnotes and schedules initially tagged individually as a block of text‒ After a year of this, filers also required to tag the detailed quantitative disclosures‒ Estimated impact – 15X to 20X increase on the number of tagged data elements

(and size of filing)


Challenges seen today

• Accounting is the most critical skill even though XBRL is a computer language– Identifying the appropriate tag is the most critical step which can be

challenging due to the voluminous nature of the US GAAP taxonomies– There is a lack of guidance on tagging decisions and whether or not to create

an extension– The SEC has also included over 200 technical rules in the EDGAR Filer

Manual (EFM) on XBRL filings

• Experience and lessons learned from first round of filers indicated the significant needs for registrants to perform their due diligence on XBRL filings instead of completely relying on filing agents for tagging decisions and accuracy– Potential lack of reviews and validations resulted in errors in XBRL filings– Companies working with certain service providers are only reviewing Excel

deliverables not the XBRL submissions


Challenges seen in the process so farProcess Errors noted and/or feedback Key lessons learned

Mapping • There is a lack of guidance around the mapping process for element selection and element extensions

• Expected challenges with year two detailed footnotes mapping

• Mapping requires the most judgment

• Element selection

• Extension creation - EDGAR Filer Manual requirements, Leading practices

• Use of correct version of taxonomy

Extending • Custom element created • When a core element exists• When a customized label would suffice

• Lack of customized label on correctly mapped core element

• Incorrect presentation/calculation information in extension linkbases

• Custom extensions limit comparability

• The creation of an incorrect linkbase can have serious ripple effect consequences through the XBRL documents

Tagging • Incorrect data entry• Tagging incorrect amounts, duplicate tagging, omission of

data from the tagging, etc.• Data attribute errors

• Decimals – rounding errors• Signs - Data entered with improper sign• Context errors• Duplicate/unused contexts• Complexity of detailed footnote tagging and rendering

• Errors in tagging result in incorrect data flowing to financial data consumers

• Some tagging issues may be attributed to the software tools used

• Reviewed and updated methodology to adapt to the year two challenge


XBRL - The Bigger Picture

XBRL can be leveraged to add value beyond financial reporting • Enhancing data quality and transparency• Facilitating more effective and timely business decisions• Streamlining business reporting processes and resources

The SEC is seeking to leverage XBRL in a range of additional areas in addition to corporate financial reporting, including:• The disclosure of key mutual fund information• Certain reporting by credit rating agencies to be migrated to an XBRL format• XBRL as an enabling component of the SEC new IDEA reporting platform• Application of XBRL for reporting related to asset backed securities and the credit

market

XBRL is being leveraged more in qualitative reporting, such as ecological impact reporting


XBRL - The Bigger Picture

XBRL is part of a larger trend towards convergence and globalization of reporting standards

• International Accounting Standards Board (IASB)‒ The IASB has released an expanded IFRS XBRL Taxonomy

• It is expected to support the broad adoption of XBRL for IFRS based reporting

• International Coordination‒ The SEC, IASB, and JFSA are taking steps to align their XBRL initiatives and taxonomy

development efforts

• National e-Government XBRL Initiatives‒ Momentum is building around large scale “national” XBRL projects

• Australia’s Standard Business Reporting (SBR) project• The Netherlands National Taxonomy Project (NTP) • These projects aim to improve efficiency and reduce costs borne by companies and governments

‒ Exchanges, regulators, and government agency activities• Canada, Korea, the UK and China


XBRL - Moving Forward on XBRL

Start taking steps to move forward on XBRL now

• Obtain understanding of XBRL and the new US GAAP Taxonomy

• Understand where your company falls in the SEC’s phase-in plan for XBRL-based financial reporting

• Get connected to the decisions being made around the implementation of XBRL reporting tools and processes

• Establish a plan for financial reporting teams and IT groups involvement in defining a sustainable process for converting and furnishing XBRL financials

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3. Demonstration


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SpeedQuickly navigate taxonomies and map dataEasy to use drag-and-drop mapping environmentFast, thorough validation of generated XBRL documents

SimplicityWorks with EPM solutions and SAP Business SuiteLink to and import disclosures stored in Microsoft WordInsulates users from dealing with complex XBRL syntax

FlexibilityEasily extend published XBRL taxonomiesComplies with the XBRL 2.1 specificationSupports basic and block‐text footnotes, dimensions, and business rules

SAP BusinessObjects XBRL Publishing by UBmatrix

Streamlining XBRL publishing for business users

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Taxonomies can be large and complex containing thousands of elements

During mapping, search and filter dialogs allow business users to quickly navigate the selected taxonomy

Browse the hierarchy

Full and partial search of taxonomy concepts and labels with smart filtering

Separate views to display presentation, calculations, and definition

Element detail view helps confirm match

Synchronized views help users locate financial elements

Search results automatically interact with the hierarchy tree

Quickly navigate taxonomies and map data

Speed

A variety of useful search options

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Rapid and re-usable mapping of financial statements and other Excel-based reports

Drag-and-drop to map:

Concepts

Contexts

Units (monetary, shares, etc.)

Reports can be refreshed without having to re-map

Map once

Re-use often

Easy to use drag-and-drop mapping environment

Speed

SalesRevenueNetGoods

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Validation encompasses both syntax and semantics

Appropriate numeric values

Does the Balance Sheet balance?

Reports ensure the mapping process is complete, highlight inconsistencies, and ensure compliance

Incomplete Mappings Report identifies partially mapped cells

Calculation Trace Report helps diagnose errors and inconsistencies by viewing what was found versus what was expected

Full Mappings Report provides a comprehensive list of mappings

Fast, thorough validation of generated XBRL documents

Speed

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SAP-approved XBRL reporting tool that’s integrated with our financial consolidation applications and SAP Business Suite

SAP BusinessObjects Planning and Consolidation

SAP BusinessObjects Financial Consolidation

SAP Business Suite (including SEM-BCS)

Via a common user interface

Microsoft Excel

Works with EPM solutions and SAP Business Suite software

Simplicity

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Disclosures are a key part of financial and compliance reporting

Financial table footnotes

Management discussion & analysis

Required by the U.S. SEC

Many organizations author this content in Microsoft Word

Ability to attach Word documents and reference content from each document

This approach offers the best of both worlds

Leaves financial report authoring in a friendly Excel environment

Narrative can be authored using Word

Link to and import disclosures stored in Microsoft Word documents

Simplicity

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XBRL syntax is complex and not business user-friendly

Comprehensive user interface avoids the need for business users to work directly with XBRL syntax

XBRL instance documents are created by the application

Insulates business users from having to deal with complex XBRL syntax

Simplicity

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Many organizations wish to extend their XBRL reporting beyond the standard taxonomies

Provide extra information to investors to help differentiate from competitors

Design and extend XBRL taxonomies using simple drag-and-drop editing functions

Business rules editor

Define relationships across extended links and link base types

Many of the world's XBRL taxonomies have been modeled with the application

IFRS, US GAAP, UK GAAP, FINREP Belgium, KOSDAQ, CRAS etc.

Easily extend published XBRL taxonomies

Flexibility

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Full compliance with the latest XBRL standards

XBRL 2.1

Dimensions 1.0 (XBRL.org candidate recommendation)

Dimensions Aggregation 1.0 (XBRL.org public working draft)

XBRL Formulas 1.0 (working draft)

Financial Reporting Taxonomy Architecture (FRTA) 1.0

Financial Reporting Instance Standards (FRIS) 1.0 (XBRL.org public working draft)

Supports any taxonomy in use today

Complies with the XBRL 2.1 specification

Flexibility

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Basic and block‐text footnotes

User‐friendly method of capturing both plain text and block‐text/HTML (or formatted) XBRL footnotes

Footnotes can be reused multiple times

Multiple footnotes can be associated to a given reporting element

Dimensional taxonomies, instance documents, and aggregation

Business Rules

Supports XBRL Formula 1.0 and Function 1.0 specifications

Can specify formula expressions either in Excel-styled syntax or in the 2005 Draft XBRL Formula 1.0 syntax

Supports basic and block‐text footnotes, dimensions, and business rules

Flexibility

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Agenda



3. Demonstration


The XBRL Publishing Process

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Mapping and Tagging

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Commentary and Disclosures

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Extending XBRL Taxonomies

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3. Demonstration


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SpeedQuickly navigate taxonomies and map dataEasy to use drag-and-drop mapping environmentFast, thorough validation of generated XBRL documents

FlexibilityEasily extend published XBRL taxonomiesComplies with the XBRL 2.1 specificationSupports basic and block‐text footnotes, dimensions, and

business rules

Summary

Saves time and money

Faster and easier to create financial statements suitable for electronic submission to regulators

Confidence and compliance

Ensures filings are accurate, complete, and meet all current regulatory requirements. Enables faster and more accurate audits at lower cost

Supports the “last mile” of finance

Streamlines consolidation, reporting, and publishing processes without sacrificing data quality

Benefits

SimplicityWorks with EPM solutions and SAP Business SuiteLink to and import disclosures stored in Microsoft WordInsulates users from dealing with complex XBRL syntax

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Next steps

See www.sap.com/epm for:

Solution briefsStreamlining XBRL publishing for business usersAccelerating the financial closing processOptimizing the Transition to IFRSEfficient Business Planning and Consolidation Financial consolidation and reportingFinancial information managementPeer-to-peer intercompany reconciliation

White papersThe Financial Close - Optimizing Performance and Driving Financial ExcellenceImproving Intercompany Reconciliation for a Faster CloseStreamlining Your Conversion to IFRS

Recorded demosStreamlining XBRL Publishing for Business UsersAccelerated Group Financial Close

http://www.sap.com/epm

Questions

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Questions

How to contact us

Scott [email protected]

Philip [email protected]

Jennifer [email protected]

mailto:[email protected]



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Thank you!