1 Japan FSA's XBRL Project - Launch of New Public Disclosure System with Mandatory XBRL - May 2008...

1

Japan FSA's XBRL Project

- Launch of New Public Disclosure System with Mandatory XBRL -

May 2008

Toshinori Kobayashi

Financial Services Agency, The Japanese Government

2

Outline of EDINET

Electronic Disclosure for Investors’ NETwork

•Electronic disclosure system under the Financial Instruments and Exchange Act

–Used for Annual Reports, Semi-annual Reports, Quarterly Reports, Securities Registration Statements, etc.

•Launched in June 2001

•Number of issuers (Annual Report):–Approx. 5,000 companies (mainly listed companies)–Approx. 3,000 investment funds

3

Issues of previous EDINET

• No function for downloading reusable data

• Investors can browse information on Web browsers but need to retype data when conducting analysis thereof.

HTML format

EDINET

HTML HTML

Browse Analysis

RetypeRetype

4

EDINET Renovation Project

• By introducing the XBRL download function, investors can analyze the financial information efficiently.

XBRL format

New EDINET

XBRL

HTML

Browse

AnalysisXBRL

5

EDINET Renovation Project – Timeline

Jan-Feb 2007

Jul-Aug 2007

Feb 8th, 2008

Mar 17th, 2008

Release Taxonomy (Final version)

Launch new EDINET system

- XBRL filing will be mandated from the first quarterly report in FY 2008

1st Pilot Program

2nd Pilot Program

Taxonomy test (Offline test)50 companies participated

System & Taxonomy test (Online test)

1,200 companies participated

Aug 2006 Start System & Taxonomy development

http://www.fsa.go.jp/singi/edinet/20080208.html

6

EDINET Renovation Project – Scope of XBRL

• Consolidated and Non-consolidated financial statements– contained in Annual report, Semi-annual report,

Quarterly report and Securities registration statement– excluding notes and non-financial information

• Japanese GAAP filers– excluding US GAAP filers, IFRS filers, etc.

7

EDINET Renovation Project

• XBRL filing of financial statements is mandated in principle.

• XBRL data is open to all investors and analysts.

• The financial information of 5,000 companies and 3,000 investment funds is XBRLized

One of the most advanced XBRL systems in the world

One of the most advanced XBRL systems in the world

8

EDINET Renovation Project– Impact of XBRL

- From “Readable Information” To “Usable Information”

XBRL provides the strategic solution to Investors.

- Providing “Global infrastructure” with “Global Technical Standard”

XBRL encourages companies and investors to active more globally.

Global, transparent and vibrant market Global, transparent and vibrant market

9

Feedback from EDINET Renovation Project

• Road to Mandatory XBRL

• Extraction of Account Items

• Time & Difficult Point to Prepare

TopicsTopics

10

Feedback from EDINET Renovation Project– Road to Mandatory XBRL

Filers Familiarity Filers Familiarity

XBRL Tools EnhancementXBRL Tools Enhancement

User’s Guideline QualityUser’s Guideline Quality

System QualitySystem Quality

Taxonomy QualityTaxonomy Quality

Communication with Tool Vendors


Seminar for FilersSeminar for Filers

Taxonomy Review (Public, Expert, Industry)

Taxonomy Review (Public, Expert, Industry)

Pilot ProgramPilot Program

EDINET Advancement Council & Working Group

EDINET Advancement Council & Working Group

Hurdle for mandate Actions

11

Feedback from EDINET Renovation Project– Road to Mandatory XBRL

This council has been established to make collaborative efforts with EDINET stakeholders.

Members: industry, analysts, CPA, stock exchanges and others



Seminar for FilersSeminar for Filers

Taxonomy Review Taxonomy Review

Pilot ProgramPilot Program

EDINET Advancement Council & WG

EDINET Advancement Council & WG

Many collaboration to enhance XBRL preparing environment.

1st review by industries & experts, 2nd review by public Several thousand comments were generated. To modify the taxonomy took 3 months per review

Two pilot programs were held in January and July 2007.

30 seminars were held and 4,000 companies are attended.

12

Feedback from EDINET Renovation Project– Extraction of Account Items

More coverage,- Less onerous for preparerMore coverage,- Less onerous for preparer

Less items,- More operable for preparer- Better performance for all users

Less items,- More operable for preparer- Better performance for all users

Covers all account items used in the practice

Covers only account items based on accounting standards

Coverage - 90%Num. Items – 4,700

Number of Items

Cov

erag

e1.Concept of account items coverage

13

Feedback from EDINET Renovation Project– Extraction of Account Items

Extract acco

un

t items

Extract acco

un

t items

EDINET Taxonomy EDINET Taxonomy

Group A(Account items based on laws)

Group A(Account items based on laws)

Group B(Account items based on CP)

Group B(Account items based on CP)

Accounting laws and standards (extracting based on laws)

Accounting laws and standards (extracting based on laws)

4,700 items 4,700 items

Common practice (extracting based on historical data)

Common practice (extracting based on historical data)

<Step 1> ・ Standardize account items (grouping same concept) <Step 1> ・ Standardize account items (grouping same concept)


・ Set Concept layer (Japanese/English Label, Reference)

・ Set Relationship layer (Presentation, Calculation, Definition)

・ Set Concept layer (Japanese/English Label, Reference)

・ Set Relationship layer (Presentation, Calculation, Definition)

Set in

form

ation

Set in

form

ation

2,500 items 2,500 items 2,200 items 2,200 items


<Step 2> ・ Select major account items (frequency of use)<Step 2> ・ Select major account items (frequency of use)

2.EDINET Taxonomy Development Process

14

Feedback from EDINET Renovation Project– Time & Difficult Point to Prepare

• Estimated time spent on preparing XBRL compared to previous EDINET – Analysis of questionnaire data (2nd Pilot Program)

Initial year Subsequent year

Increase >100%[22%]

Increase 50%-100%[50%]

Increase <50%[9%]

Same as before[14%]

Decrease[0%]

Unclear[5%]

Increase >100%[6%]

Increase50%-100% [28%]

Increase <50%[6%]

Same as before[50%]

Decrease[4%]

Unclear[6%]

15


• Difficult point to submit– Analysis of questionnaire data (2nd Pilot Program)

Filers Familiarity Filers Familiarity

XBRL Creation Tools Enhancement

XBRL Creation Tools Enhancement

User’s Guideline QualityUser’s Guideline Quality

System QualitySystem Quality

Taxonomy QualityTaxonomy Quality•No major issue is found that disturbs submissions.•No major issue is found that disturbs submissions.

•Obtaining XBRL report creation tools•Understanding how to use the tools•Understanding how to create the XBRL report and how to submit to EDINET•Much work beyond the expectations•Cost

•Obtaining XBRL report creation tools•Understanding how to use the tools•Understanding how to create the XBRL report and how to submit to EDINET•Much work beyond the expectations•Cost

Difficult Point

16


• Other Difficult point to submit– Analysis of questionnaire data (2nd Pilot Program)

•Identifying the cause of error

•Setting of the English label

•Choice of the proper items from the taxonomy

•Identifying the cause of error

•Setting of the English label

•Choice of the proper items from the taxonomy

17


• Preparation for Mandatory Filing– Analysis of questionnaire data (2nd Pilot Program)

<Technical Issues>

•Selecting and familiarizing with an XBRL tool

•Early commencement of creating XBRL report

<Accounting Issues>

•Selection of items from EDINET Taxonomy

•Consensus-building with auditor

<Other Issue>

•Securing human resources and budget

<Technical Issues>

•Selecting and familiarizing with an XBRL tool

•Early commencement of creating XBRL report

<Accounting Issues>

•Selection of items from EDINET Taxonomy

•Consensus-building with auditor

<Other Issue>

•Securing human resources and budget

18

– Notes, Non-financials

– Dimensions, Versioning, Rendering, Formula

Future Issues

InvestorsAnalystsInvestorsAnalysts

Accounting RulesAccounting Rules

Global MarketsGlobal Markets

XIIXII

FilersFilers

Technology ProvidersTechnology Providers

Scope of XBRLScope of XBRL

Multinational InteroperabilityMultinational Interoperability

New technology adoptionNew technology adoption

International IssuesInternational Issues

Domestic IssuesDomestic Issues

New Technology

Best Practice

Changes

Software

-Requirements-Familiarity

JFSA

19

Future Issues- Multinational Interoperability

• To establish a global market, corporate financial information in all countries should be used in a cross-border fashion

• Differences in data formats for financial information among countries may interfere with global usage.

To maximize the benefits of XBRL as global infrastructure,

It is necessary to ensure multinational interoperability and comparability of XBRL through global cooperation.

20


JFSA, IASCF, EC and SEC has been discussing towards ”Multinational Interoperable Architecture”.

JFSA, IASCF, EC and SEC has been discussing towards ”Multinational Interoperable Architecture”.

Policy & Rules Cooperation among Regulators

Cooperation among Taxonomy Owners

21

<Process Overview>Identify comparison pointsCompare 3 taxonomiesEvaluate differences and their impactsPrioritize the points to be “interoperable”Decide action items for each point

Feedback loop

We are here!!We are here!!


22

Thank You ！

[email protected]

1 Japan FSA's XBRL Project - Launch of New Public Disclosure System with Mandatory XBRL - May 2008...

Documents

Transcript of 1 Japan FSA's XBRL Project - Launch of New Public Disclosure System with Mandatory XBRL - May 2008...