The truth behind the figures

21-04-23 XBRL 1

The truth behind the figures

21-04-23 XBRL 2

XBRL Deployment for Corporates

Paul SnijdersCEO Semansys TechnologiesBoard member XBRL NederlandFounding member XBRL in Europe

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What we will cover

• What does XBRL mean for you

• How to implement

• Implementation strategy

• Threats and Opportunities

key to successful adoption

•Implementation strategy

•Threats and Opportunities

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XBRL is a regulator’s thing

• Who is implementing XBRL

– Banking supervisors & banks

– Securities regulators & stock exchanges

– Statistical agencies

– Balance sheet offices & central banks

– Tax authorities

• Reporting issues, locally and trans-nationally

– Local GAAP and/or IFRS

– Basel II (COREP)

– Statistics

– External Reporting: FR taxonomies

• Benefits:

– Time & money savings

– Improving transparency

– Reliable & comparable data

Are the benefits only for the regulators?

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Call for change in the fin. world

““Above all, continue with your enthusiastic Above all, continue with your enthusiastic

contributions to the global development of contributions to the global development of

the XBRL standard. As I said at our last XBRL the XBRL standard. As I said at our last XBRL

Conference in Tokyo: Have no doubt, you are Conference in Tokyo: Have no doubt, you are

changing the world for the better”changing the world for the better”

Chairman Christopher CoxChairman Christopher Cox, U.S. , U.S. SSecurities and ecurities and EExchange xchange

CCommissionommission

San Jose, California, Jan. 18, 2006San Jose, California, Jan. 18, 2006

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Taxonomy creation

Accountingrules

Validation

Regulator

How do you report in XBRL

1. Regulator presents the taxonomy

2. You map it to your applications (COA)

3. Validate the results4. Send to the regulator5. Ready

But is that really all???

Mapping (COA)

Validation

Companies

XBRLReport

XBRLReport

Reporting

Validation

Compliance checking

Analysis

TaxonomyTaxonomy

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XBRL will be

• Established

•Ireland

•Germany

•Spain

•The Netherlands

•United Kingdom

• Provisional

•Sweden

•Belgium

•Denmark

•France

• In development

•Czech Republic

•Finland

•Hungary

•Italy

•Poland

•Portugal

•Starting

•Slovenia, Austria,

•Greece, Estonia,

•Norway, Luxemburg,

•Malta + Turkey

Insurance Pensions

SEC’s in EU

Bank regulators

ECCBBalance sheet office

Accounting standards

Federation of banks

Stock Exchanges

. . . . . everywhere

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Global projects

• Australian Tax Office• Banco de España• Bundesbank • Committee of European Banking

Supervisors (CEBS) • Chinese Securities Regulation

Commission (CSRC) {sponsoring Shenzen and Shanghai exchanges}

• Danish Commerce & Companies Agency

• Dutch Tax Authority• Dutch Water Authority • Eurostat • EU Commission – XBRL in Europe• Financial Service Agency of Japan• The Irish Revenue• Spanish Stock Exchange

• KOSDAQ – Korea • National Tax Agency of Japan • New Zealand Exchange• Patent and Registration Office

(PRV – Sweden)• U.S. Securities & Exchange

Commission• Shanghai Stock Exchange 800+

companies• Shenzhen Exchange • Tokyo Stock Exchange • UK Companies House• UK Inland Revenue Bank of Japan• US Federal Financial Institutions

Examination Council (includes FDIC)

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A multitude of taxonomies

IndustryStock exchangeSectors

Specific

Local GAAPTax AdminStatistics

NationalTaxonomyTaxonomy

TaxonomyTaxonomyTaxonomyTaxonomy

TaxonomyTaxonomy TaxonomyTaxonomy

TaxonomyTaxonomyTaxonomyTaxonomy

TaxonomyTaxonomyTaxonomyTaxonomy

TaxonomyTaxonomy

TaxonomyTaxonomy

US-GAAPCOREPIFRS

International

TaxonomyTaxonomy

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To be expected …………….

• Companies will be confronted with multiple

taxonomies

Filings (GAAP), Tax adm, Statistics, Industry, banks, Sector etc, etc,

• Companies will push corporate taxonomies into

the divisional organisational structure

• In each country’s subsidiaries will need to

implement national taxonomies

• Companies need corporate control and

management of ‘all’ XBRL realizations (section 404)

• Companies will use XBRL for internal reporting

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Current reporting practice

• 70 % of reporting in corps. is manual

• A large German Bank processes 200.000 statements a year

• A US Bank can use only 15 data items for risk assessment

• A Dutch bank can save 30-40M Euro by preventing retyping SME’s financial statements

• Organizations have over 30 reporting duties (Water Boards NL have 99 !!)

• Less than 10 % of spreadsheet has test procedures, 47% have significant errors

• A UK insurance company has 3.600 process steps for once a year filing, 60 employees, 4 months

A Japanese bank lost $ 349 M over a typing error !!

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Cleaning up the Excel hell

• Large companies may have hundreds of spreadsheets that are

in a gray area for Compliance reporting Sarbanes Oxley (SOX 404)

• The true cost of using spreadsheets likely is much higher than

other approaches

• Eliminate as many stand-alone spreadsheets as possible from

processes is the one sure way to sustain efficient compliance

• Although there are ways to compensate for spreadsheet control

issues, the best approach is to eliminate them altogether from

processes that affect external reports.

• In the long run, processes that run on inherently more

controllable IT systems instead of stand-alone spreadsheets can

save your company considerable time and money in the audit

process as well as in executing day-to-day business

The

case

The

Stra

tegy

The

gain

s

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Call for managed solution

Reporting requirements

Reporting requirements

• Comply to international and local taxonomies

• Regulatory compliance rules

• Real time, interactive data

ComplianceCompliance

Management& Control

Management& Control

• Single point of control

• Coordinated control and compliance rules

• Change management

• Object driven, versioning and audit

ControlControl

Streamline Reporting Processes

Streamline Reporting Processes

• Individualized

• Automated processed

• Reduced development efforts

• Straight through reporting

• Integration with legacy systems

EfficiencyEfficiency

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Corporate implementation

• Reporting components to consider

• Public taxonomies (corporate, local)

• Company requirements

• Dimensions (granularity)

• Compliance rules

• Legacy systems (charts of accounts)

• Mapping

• Centralize configuration & management

• Individual XBRL instance templates

• Automated processes

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Comprehensive Solution

XBRL Deployment

IFRS/GAAPAccounting

Rules

Data Source Mapping

Reporting Entities

ReportingDimensions

Charts ofAccounts

Fin

an

cia

l A

pp

licati

on

s

Valid

ati

on

XBRLReporting

Rep

ort

ing

Pro

cesses

Internal Requirement

External Requirement

Authorization Security Version management Audit Trail

Change management

Corporate Reporting Requirement

XBRL XBRL Deployment Deployment

ManagerManager

Localize

d r

eq

uir

em

en

ts

Server based architecture

Management & Control

Compliance Monitoring

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Configuration & profiling

Reporting Requirements

Taxonomies

ReportingDimensions

ReportingEntities

Dimension, Entity & element

Groups

ReportingProfiles

TaxonomiesElementsDimensionsEntities

CompanyReportingElements

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TaxonomiesElementsDimensionsEntities

Configuration & profiling

ReportingProfiles Compliance

rules

Charts of accounts

Data sources

Audit andControl

Validation Checks

Account mapsCompliance rulesValidation Data sources

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Individual reporting

XBRLReport

XBRLReport

TaxonomyTaxonomy

Export

Mapping

ComplianceChecks

Reporting

Validation

TaxonomiesElementsDimensionsEntities

ReportingProfiles

Account mapsCompliance rulesValidation Data sources

Compliancerules

Accountmaps

Templates

Reporting Entity

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<- -> XBRL Deployment Manager

GLERP

CompanyReporting

Requirements

TaxonomyRequirement

Mapping

IFRS/Local GAAPTaxonomy

CompanyReportingElements

LocalCOA

Mapping

Data sourceMapping

ComplianceRequirements

ComplianceManagement

ReportingProfile

Manager

ReportingElement Set

IFRS/GAAPGap Analysis

Charts of Accounts

DictionaryManagement

COA-dataGap Analysis

Entities

Dimensions

Mapping fileAccounts-Taxonomy

XBRLInstanceManager

Instance TemplatesTaxonomy elementsEntitiesPeriodsUnitsScenariosSegments

Compliance rulesExistence rulesContent rules

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Ready for corporate use

CapabilityCapability ManagedSolution

Manual processes

Control Auditable processesAuditable processes ?Compliance rulesCompliance rules No

Corporate controlCorporate control No

Manage Single source maintenanceSingle source maintenance No

Automatic generation Automatic generation No/?

Centralized configurationCentralized configuration No

Versioning Versioning No

Change management No

Integration Integrate in Business OperationsIntegrate in Business Operations ?Integrate Technology & ApplicationsIntegrate Technology & Applications ?

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XDM a corporate solution

SystemIntegration

SystemIntegration

Reliability of Internal financial reporting

ComplianceCompliance

Taxonomy based Compliance reporting

Audit & ControlAudit & Control

Enhance audits and controls

CompletenessAccuracy

CompletenessAccuracy

Sarbanes OxleySection 302

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I report, so …. I XBRL

• Regulators will require XBRL based

reporting

• Corporates will have a multitude of

taxonomies

• XDM provides a ‘managed solution’

• The weather in Madrid is better than

in Amsterdam

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Be aware: more to expect

“One way, perhaps, to distance

ourselves from relying on these

quarterly earnings forecasts, is to

make progress toward real-time

disclosure. ”

Michael G. Oxley , House Committee on Financial

Services

Washington, March 29, 2006

The truth behind the figures

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paul.snijders@semansys.com