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Liv A. WatsonE-Mail: [email protected]
Phone: (812) 499-8149
What Financial Executives What Financial Executives Need to Know About XBRLNeed to Know About XBRL
www.xbrl.orgwww.xbrl.org
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Today’s ObjectivesToday’s Objectives• Overview of XML & XBRL
• Show you how this technology makes doing E-Business:
– Faster
– Cheaper
– Better
• Obtain your views
• Determine how your company will embrace this technology
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Evolution to WEvolution to Webeb Services Services
TechnologyInn
ova
tio
n
FTP, E-Mail,Gopher
Web Pages
Web Services
TCP/IP HTML XML
Connectivity
Presentation
Automation
Browse the Web
Program the Web
4 From Evansville Courier and Press
Is There A Problem?
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Searching for the word “Mercury” on the Web can provide search results such as--
Hg
Content—without Context
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Astronomy
Aerospace
Music Industry
Publishing or Mythology
Chemical Industry
Auto Industry
<RECORD-LABEL>
<PROGRAM>
<PLANET>
<GOD>
<SYMBOL>
<CAR-MODEL>
“Content in Context” (Industry-specific)
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What is XML?What is XML?XML stands for:
eXtensible
Markup
Language
Universally accepted method of exchanging information
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How does it work?How does it work?• XML gives meaning to information through
the use of tags
<Customer> <Name>Liv A. Watson</Name> <Title>Director</Title> <Company>Edgar Online Inc</Company></Customer>
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Who defines the tags?Who defines the tags?• Tags are defined by industry consortiums • Each industry’s standard tags are commonly
referred to as a taxonomy
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Who’s Building Taxonomies? Who’s Building Taxonomies?
Accounting Advertising Architecture
Automotive Banking Communication
Economics Education E-Commerce
EDI ERP Financial
Healthcare HR Insurance
Legal Music News
Publishing Real Estate Retail
Science Software Supply Chain
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What Is XML?What Is XML?
• “XML is aplatform-independent,
self-describing,
expandable,
standard data exchange format
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XML is Platform IndependentXML is Platform Independent
• Windows
• Unix
• Macintosh
• Mainframe
• Linux
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XML is Self-DescribingXML is Self-Describing
• Example:– <DATE>July 26, 1998</DATE>
• Describes the information, not the presentation
• Format neutral
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XML is ExpandableXML is Expandable
• Whereas HTML has a fixed set of tags– <H1>, <B>, <PRE>
• XML lets you create your own tags– <sugary-substance>– <Shakespearean-character>– <cash-equivalent>
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Who’s Embracing XML now?Who’s Embracing XML now?
• Software developersUsing XML as the core technology for new products
• Database developers Building XML support into their products.
• Industry groupsDeciding how information should be shared.
• Organizations Investigating how to tie their inter and intra company processes together.
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XML Makes Doing E-Business:XML Makes Doing E-Business:
Better
Faster
Cheaper
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• XML for Financial Reporting
• Enables a dramatic improvement in the processing of financial reports
• XBRL documents can be—– Prepared efficiently– Exchanged reliably– Published more easily– Analyzed quickly– Retrieved by investors simply
to enable smarter investments
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• XBRL is:– NOT a new accounting standards but enhances
the distribution and usability of existing financial statement information
– Enabler and an extension for relational database functionality for all financial statement information
Benefits
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Problems XBRL AddressesProblems XBRL Addresses
• Ineffective communication to investors
• Inefficient aggregation and analysis
• Inefficient creation of financial statements
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Process Benefits:Process Benefits:Lowering Financial Reporting CostLowering Financial Reporting Cost
Who benefits
RegulatoryFilings
Web Site
Tax Return
Trade Filings
Printed Financials
Accounting System
Third Party Information
ExplanatoryText
• Today’s external reporting processes– Rework and delay
– Ad hoc and non repeatable
– No path forward
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Process Benefits:Process Benefits:Lowering Financial Reporting CostLowering Financial Reporting Cost
Who benefits
RegulatoryFilings
Web Site
Tax Return
Trade Filings
Printed Financials
Accounting System
Third Party Information
ExplanatoryText
XBRLDocuments
• Common interchange format and storage is good information management practice– Reduces redundancies & discrepancies
– Repeatable processes using tools
– A platform for continuous reporting
XBRL: Interoperability & Multiple XBRL: Interoperability & Multiple OutputsOutputs
Other Sources of Information
RegulatoryFilings
Intranet /Internet /Extranet
Tax Returns
Bank Filings
Printed Financials
XBRL XBRL
Creditors
Other Parties
Investors
Other Sources of Information
Accounting System(s)
XBRL
Accounting System(s)
Accounting System(s)
Other Sources of Information
XBRL
XBRL Working Model: Planned Specifications
ExternalFinancialReporting
BusinessOperations
InternalFinancialReporting
Investmentand Lending
AnalysisProcessesProcesses
ParticipantsParticipants
AuditorsTradingPartners
Investors
FinancialPublishersand Data
Aggregators
Regulators
XBRL for G/L Journal Entry
ReportingXBRL for
EDGAR Filings
XBRL for Financial Statements
XBRL for Tax Filings
XBRL for Business Event Reporting
Software Vendors
ManagementAccountants
Companies
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As Presented on the Web
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• Reduces Cost / Enhances Revenue
• Improves Financial Reporting
• Improves Audit Quality
• Improves Client Satisfaction
XBRL and its BenefitsXBRL and its BenefitsBenefits
05Audit.scm
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XMLDocument
XMLDocument
Core Schema
Core Schema
Company Specific
Vocabulary
Company Specific
Vocabulary
Industry Specific Vocabularies
Industry Specific Vocabularies
Transformation
Tools
Transformation
Tools
The XML PuzzleThe XML Puzzle
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Internal to company –Internal to company –Proprietary formatProprietary format
XBRL/XML used to transfer data XBRL/XML used to transfer data across the Internet across the Internet
– – common vocabulary -common vocabulary -
Internal to company –Internal to company –Proprietary formatProprietary format
Company ACompany AData StoresData Stores
Company BCompany BData StoresData Stores
<XBRL><XBRL><XML><XML>
XM
L T
ranslator
XM
L T
ranslator
InterneInternett
<XBRL><XBRL><XML><XML>
XM
L T
ranslator
XM
L T
ranslator
ApplicationsApplicationssuch assuch as
Accounting Accounting SystemsSystems
ApplicationsApplicationssuch assuch as
Accounting Accounting SystemsSystems
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Steps in Technology AcceptanceSteps in Technology Acceptance
VisionariesVisionaries
TaxonomyTaxonomy
Simplification/ToolsSimplification/Tools
AcceptanceAcceptance
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How Do You Get There?How Do You Get There?
Needs AssessmentNeeds Assessment
Design Solution/Business PlanDesign Solution/Business Plan
Training & EducationTraining & Education
ImplementationImplementation
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XBRL Makes Business Reporting EasierXBRL Makes Business Reporting Easier
Better
Faster
Cheaper
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Additional Education SourcesAdditional Education Sources• www.xbrl.org• www.xml.org• www.ebxml.org• www.w3.org• www.rosettanet.org• www.ibm.com/developer/xml• www.microsoft.com/industry/biztalk
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When Will It Reach Critical Mass?When Will It Reach Critical Mass?• “The phonograph is of no commercial use”
- (Thomas Edison, 1880)
• “Everything that has been invented has been invented” - ( Charles Duel, Director US Patent Office, 1899)
• Who the hell wants to hear actors talking?”- (Harvey Warner, 1927)
• “I think there is a world market for about five computers” - (Thomas J Watson, Chairman, IBM, 1943)
• There is no reason for any individual to have a computer in their home” - (Ken Oloson, President of Digital Equipment Corp., 1977)
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Ask YourselfAsk Yourself……• What will your digital industry look like?
• What will be your business model?
• How will your business process support this business model?
• What people skills will you need to manage those new business processes?
• How should you organize to use those people skills to best effect?
• What will your infrastructure need to look like to support those digital processes?
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Products Imbued with Services Delivered Over the Internet
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Final Thought……..Final Thought……..
Change is not what it used to be…..Change has become a process; it’s become a permanent part of the external environment
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Concluding Remarks…..Concluding Remarks…..
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Questions ?Questions ?
EDGAREDGAR ®®
NLINE NLINEOO SMSM
• Liv A. Watson• E-Mail: [email protected]
• Phone: (812) 499-8149