Why do we render XBRL?

As many filers are finding out during this filing season, XBRL rendering (making XBRL humanly readable) is not as sophisticated as we want it to be. In fact the most commonly used rendering engines have many problems that filers are experiencing as they review their XBRL exhibits. Let’s explore XBRL rendering using the SEC’s rendering engine as an example of the challenges posed by commonly used rendering tools.

When mapping company financial information (Facts) to the US GAAP Taxonomy (UGT), companies are following, or should follow, a process that includes planning, mapping, reviewing, testing, re-reviewing (as needed), approving and then filing. Notice that a part of that process includes viewing XBRL result`s. Inevitably, some form of rendering is the way we currently review amounts being tagged, the XBRL tags selected, the definitions and attributes of those tags and the interrelationships between the amounts reported (like calculation relationships and amounts in SEC filings that agree…or should agree).

We tend to think of financial reporting data in a visual way – in a way we can view it. That’s the old way of thinking about financial reporting. In the future people will be able to grab entire financial reports or individual amounts reported in a disaggregated way (i.e. if they want only EBITDA and Earnings per share, they need only grab the XBRL tags for those amounts for the periods they are interested in). Because XBRL tags the amounts being reported with contextual metadata, the individual amounts have meaning separate and apart from any financial report or software application. In other words, you may still want to think about data in terms of viewable renderings, but investors and other users of financial data are not obligated to do so.

What is XBRL filing? (Part 2)

Remember that as you complete your XBRL filing, that it is very important to get your facts and values right. Your data should be mapped to the appropriate element in the UGT or extension taxonomy. Make sure the definitions and attributes or properties of your selected elements properly represent what you are reporting. It is especially important to get the period type, balance type, data type and other taxonomy attributes (or properties) correct. In addition, the calculation relationships between your data must mathematically work. All of your facts and values should be mapped to the proper taxonomy at the appropriate level.

Your financial statements are required to be detail tagged and your footnotes must be tagged at the following four levels:

·         Level 1: Each complete footnote tagged as a text block

·         Level 2: Each significant accounting policy within the significant accounting policy footnote tagged as a text block

·         Level 3: Each table within each footnote tagged as a text block

·         Level 4: Within each footnote, each amount (i.e., monetary value, percentage and number) is required to be separately tagged

As you complete your XBRL filings, remember to focus on your facts and values and their relationships to the UGT or extension taxonomy. Also give significant consideration to the definitions and attributes of the elements chosen. By doing so you will emphasize the data being reported, not how poorly the formatting of a rendering tool is. Remember too that the purpose of your XBRL filing is to make your data machine readable, not beautiful to look at. We have HTML and PDF versions of your filings for view ability.

What is XBRL filing? (Part 1)

A user-friendly way to understand the concept of what is being reported is to think of the filing as consisting of your facts and values (the Instance file), the company specific taxonomy with all of its various attributes (the Extension Taxonomy) and the relationships between the two (the “Tags”). Technically speaking, your SEC filing consists of six electronic files. Each of these files has a specific role in defining your data. Here are the filenames and their roles.

XBRL Filename (1)	File Type	Purpose of file
xxx-yyyymmdd.xml:	Instance file	Contains the actual facts and values in your filing. Each fact in the instance document is related to an element in your company’s Extension Taxonomy.
xxx-yyyymmdd.xsd:	Schema file	Defines the actual concepts of an XBRL based markup language. It gives their names, their data types, whether you can report about them. I like to think of the Schema file like a traffic cap for the other XBRL files.
xxx-yyyymmdd_cal.xml	Calculation linkbase	Defines how values of concepts should sum up from one to another
xxx-yyyymmdd_def.xml	Definition linkbase	Allows users to define relationships between elements. For example a relationship can be defined that the occurrence of one concept within an XBRL instance mandates the occurrence of other concepts
xxx-yyyymmdd_lab.xml	Label linkbase	Allows the user to attach labels to a given concept
xxx-yyyymmdd_pre.xml	Presentation linkbase	Defines how concepts are ordered and nested

(1) The naming convention for these files is as follows: xxx = company specific identifier (like ticker symbol), yyymmdd = the report date and the remainder of the file name specifies the type and role of that XBRL data file

Transparency, Investors and XBRL (part 2)

Transparency is important to investors and security markets. Transparency is equally important within company operations. Companies seem to be focused exclusively on complying with the SEC’s XBRL requirements, but they should begin to think about ways to increase the transparency of their operations. A quick and relatively inexpensive way of gaining that operational visibility is to utilize XBRL. Use of XBRL within company operations provides many advantages including:

·         Ability to access business and financial information from disparate computer platforms or applications

·         Ease of access to business and financial information including through use of existing desktop tools (like MS Excel)

·         Improved accuracy in the business and financial information obtained because amounts are selected using the related XBRL tag

·         Increased consistency of business and financial information because the information persists from its original source to its ultimate use

·         Speed of access to business and financial information

·         Increased automation and less manual data review, especially in handoffs of data from application to application

·         Increased ability to automate reporting

Transparency, Investors and XBRL (part 1)

The Financial Crisis Inquiry Commission has been meeting to look into the recent financial crisis. The Financial Crisis Inquiry Commission (the “Commission”) website says: “In the wake of the most significant financial crisis since the Great Depression, the President signed into law on May 20, 2009, the Fraud Enforcement and Recovery Act of 2009, creating the Financial Crisis Inquiry Commission. The Commission was established to examine the causes, domestic and global, of the current financial and economic crisis in the United States.”

It is clear that our markets and the risks associated with them are enormously complex. Individual investments of various types can be understood, but when investment banks pool assets, especially sub-prime assets, then package them into investment grade vehicles through strategies like over-collateralization, senior and subordinated holders or insurance vehicles, the investments and underlying risks become more complex. To make matters worse, these pooled assets are then exploded apart, packaged with various derivative products, and sold to investors.

Perhaps the most important way to protect investors is to give them visibility into the risks of the investments they choose. When an investor understands the risks, he can take action to mitigate it. The transparency of investment vehicles and the underlying risk factors is an extremely important component of a robust investor protection approach and a healthy securities market.

IFRS and XBRL go hand to hand

Companies around the world are working to increase transparency in their financial reporting while also reducing the regulatory burden. Two global standards help enable these objectives: International Financial Reporting Standards (IFRS, a set of accounting standards) and eXtensible Business Reporting Language (XBRL, a technology standard). These distinct yet complementary standards often work hand in hand; for example when IFRS-based financial statements are submitted electronically in XBRL.

Organizations all over the world are adopting IFRS, a set of methodologies and disclosure requirements for the preparation and presentation of financial statements. With the goal of implementing a common set of accounting standards worldwide, regulators and standards setters are increasingly requiring companies to use IFRS.

To cope with the systemic demands that IFRS and XBRL impose, companies must prepare their infrastructures for these changes. SAP (Systems Applications and Products in Data Processing) provides the software and solutions to help simplify transitions to IFRS or XBRL reporting.

If adopting IFRS or XBRL is in your company’s future, your mission is clear: Begin treating the transition as an opportunity rather than just a mandate. With careful planning and thoughtful execution, you can use the adoption of IFRS and XBRL as a chance to review and improve your financial consolidation and reporting systems and enable rapid legal compliance.

The National Standardization Administration and Ministry of Finance of P. R. China released the Chinese National Standards on Extensible Business Reporting Language (XBRL) Specifications and General Purpose Taxonomy of Chinese Accounting Standards

On October 19, the National Standardization Administration and Ministry of Finance of China held the Release Ceremony for the Chinese National Standards on Extensible Business Reporting Language (XBRL) Specifications and General Purpose Taxonomy of Chinese Accounting Standards (CAS) in Beijing. The national standards and general purpose taxonomy have defined the elements of XBRL and the basic requirements of preparing XBRL financial reporting based on CAS, thus laying a solid foundation for building a scientific, sophisticated and universal accounting information standards system. The national standards and taxonomy have become a milestone and starting point of China’s accounting information undertaking. Vice Finance Minister Wang Jun and Administrator Ji Zhengkun of National Standardization Administration attended the ceremony and delivered an address.

Wang Jun said that XBRL has effectively enhanced the accuracy and timeliness of information disclosure. It is helpful to conduct profound and meticulous information processing from various perspectives and levels, thus significantly scaling up the width, depth and accuracy of information usage. XBRL can not only be applied in the financial accounting sector, but also be extended to fiscal management, taxation, financial regulation, state-owned assets management, risk management and internal control. He pointed out that the establishment of the national standards and general purpose taxonomy is a trail-blazing cause.

The formulation and implementation of the standards and taxonomy demonstrate inclusiveness, consistence and authority. The design of the standards and taxonomy is in line with the development trend of XBRL, which is forward-looking, flexible and open. In the next step of implementation, it is imperative to continue playing the synergy effect of the Accounting Information Committee, improve the coordination mechanism, and ensure proactive and orderly implementation.

Differences between HTML, XML and XBRL

HTML (Hypertext Markup Language) is a standard way of marking up a document so it can be published on the World Wide Web and viewed in a browser.  It provides a set of pre-defined tags describe on how content appears in a browser.  For example, it describes the font and color of text.  It gives little information on meaning or context. XML (Extensible Markup Language) uses tags to identify the meaning, context and structure of data. 


XML is a standard language which is maintained by the World Wide Web Consortium (W3C).  XML does not replace HTML; it is a complementary format that is platform independent, allowing XML data to be rendered on any device such as a computer, cell phone, PDA or tablet device.  It enables rich, structured data to be delivered in a standard, consistent way.  Whereas HTML offers a fixed, pre-defined number of tags, XML neither defines nor limits tags.  Instead, XML provides a framework for defining tags (i.e. taxonomy) and the relationship between them (i.e. schema).


XBRL is an XML-based schema that focuses specifically on the requirements of business reporting.  XBRL builds upon XML, allowing accountants and regulatory bodies to identify items that are unique to the business reporting environment.  The XBRL schema defines how to create XBRL documents and XBRL taxonomies, providing users with a set of business information tags that allows users to identify business information in a consistent way.  XBRL is also extensible in that users are able to create their own XBRL taxonomies that define and describe tags unique to a given environment.

How can your company create a Financial Statement in XBRL form

There are a number of ways to create financial statements in XBRL:

• XBRL-aware accounting software products are becoming available which will support the export of data in XBRL form. These tools allow users to map charts of accounts and other structures to XBRL tags.
• Statements can be mapped into XBRL using XBRL software tools designed for this purpose.
• Data from accounting databases can be extracted in XBRL format.  It is not strictly necessary for an accounting software vendor to use XBRL; third party products can achieve the transformation of the data to XBRL.
• Applications can transform data in particular formats into XBRL.  For example, web sites are in operation which transform EDGAR filings in the United States into XBRL, providing more efficient access to specific data in the filings.

Potential users of XBRL

XBRL can be applied to a very wide range of business and financial data.  Among other things, it can handle:

·         Company internal and external financial reporting.

·         Business reporting to all types of regulators, including tax and financial authorities, central banks and governments.

·         Filing of loan reports and applications; credit risk assessments.

·         Exchange of information between government departments or between other institutions, such as central banks.

·         Authoritative accounting literature - providing a standard way of describing accounting documents provided by authoritative bodies.

·         A wide range of other financial and statistical data which needs to be stored, exchanged and analyzed.

XBRL International Unveils strategic initiatives to make XBRL easier to develop, use and compare

NEW YORK, NY, OCTOBER 6, 2010 – XBRL International, Inc., (XII), the global standard setting body for the XBRL, today released “Preserve. Promote. Participate. Moving XBRL Forward,” a core vision document that outlines six strategic initiatives to continue the momentum of the XBRL standard.

“Preserve. Promote. Participate.” invites all business reporting stakeholders to get involved in advancing the XBRL standard, outlines the strategic initiatives proposed by the XBRL International Standards Board (XSB), and discusses how these initiatives position XBRL for the future while preserving current investments.

 “XBRL is at a historic milestone – it is already being used by millions of companies, investors, regulators, analysts, accountants, and technologists around the world,” said Anthony Fragnito, CPA, CEO of XBRL International, Inc. “The standard is poised to cultivate even greater market opportunities and value by leveraging the full power of the global XBRL community. The XBRL movement is an open, collaborative community filled with diverse, talented experts who put aside competitive motivations in favor of the collective good that XBRL delivers: greater transparency, improved risk management, and more informed decision-making. Our strategic initiatives create the engine to drive further XBRL adoption.”

Developed after careful deliberations and consideration of worldwide input received from XII’s February 2010 Discussion Document, “Preserve. Preserve. Participate.” outlines these initiatives:

1. Create an abstract model to provide a conceptual framework for understanding XBRL and give

developers a strong foundation for implementing XBRL solutions.

2. Produce quality training materials to support developers and educate those new to XBRL.

3. Define standard Application Programming Interface (API) signatures that enable software

applications to more easily and consistently connect with XBRL-enabled systems.

4. Reorganize the existing XBRL technical specification to make it more readable and easier to

understand.

5. Enhance data comparability to enable richer analysis across a wider set of data, regardless of

project boundaries.

6. Create application profiles to simplify the application development process by decomposing the

XBRL technology stack into smaller components.

“The XBRL Standards Board has outlined a set of strategic initiatives with the goal of making it easier for

developers to produce, compare and use XBRL data within software applications,” said Chethan Gorur,

Chair of the XSB. “We invite the XBRL community to take an active role in the development of these

initiatives.”

How XBRL Works

XBRL is a member of the family of languages based on XML, or Extensible Markup Language, which is a standard for the electronic exchange of data between businesses and on the internet.  Under XML, identifying tags are applied to items of data so that they can be processed efficiently by computer software.

XBRL is a powerful and flexible version of XML which has been defined specifically to meet the requirements of business and financial information.  It enables unique identifying tags to be applied to items of financial data, such as ‘net profit’.  However, these are more than simple identifiers.  They provide a range of information about the item, such as whether it is a monetary item, percentage or fraction.  XBRL allows labels in any language to be applied to items, as well as accounting references or other subsidiary information. 

XBRL can show how items are related to one another.  It can thus represent how they are calculated.  It can also identify whether they fall into particular groupings for organisational or presentational purposes.  Most importantly, XBRL is easily extensible, so companies and other organisations can adapt it to meet a variety of special requirements.

The rich and powerful structure of XBRL allows very efficient handling of business data by computer software.  It supports all the standard tasks involved in compiling, storing and using business data.  Such information can be converted into XBRL by suitable mapping processes or generated in XBRL by software.  It can then be searched, selected, exchanged or analysed by computer, or published for ordinary viewing.

XBRL Corporate Actions Data Tags Released to Public

XBRL US Labs, the research and development arm of XBRL US, announced on September 30, 2010 that it has completed the initial draft of a taxonomy, or digital dictionary of terms, to define corporate actions event information, and made it available for public review and comment. Developed by a team led by XBRL US' Chief Standards Officer Campbell Pryde, and XBRL Labs Research Fellow L.A. Orloff, a product manager with The Depository Trust & Clearing Corporation (DTCC), the XBRL tags are based on elements of the ISO 20022 corporate actions global standard and were developed as part of an Issuer-to-Investor: Corporate Actions initiative, a cooperative industry effort sponsored by DTCC, SWIFT and XBRL US Labs.


The initiative was formally kicked off at a May 2009 conference of industry leaders, at which project partners DTCC, SWIFT, and XBRL US outlined the program and set a goal of improving transparency and communication between issuers and investors for greater accuracy, reduced risks and lower costs. Early milestones have included a business case developed with a multi-industry stakeholder group, a taxonomy preview by XBRL US members, and a pilot program to measure shareholder benefits of XBRL-tagged corporate actions involving major financial institutions who process and deliver corporate actions announcements, such as Citi, who, with DTCC, will test-run XBRL-tagged dividend announcements to evaluate data quality and consistency, as well as the flexibility XBRL offers in the form of country- and company-specific extensions to the common core taxonomy.


"Using XBRL to tag corporate actions documents will bring benefits to issuers, investors and intermediaries," said Donald F. Donahue, DTCC Chairman and CEO. "This taxonomy was designed to make it as simple as possible for issuers to tag documents in XBRL, with increased confidence that shareholders will receive better quality data, in less time, and at less cost."


The taxonomy takes advantage of the ISO 20022 corporate actions standard to provide a better user experience with multiple views and entry points into corporate actions data, using software tools that take advantage of the ISO and XBRL standards to view a simplified, filtered set of relevant dictionary terms for a given type of corporate action.

"XBRL is an important tool that leverages the ISO 20022 standard to improve the communication between issuers and investors, which ultimately reduces costs and risks as well as increases transparency," said Chris Church, Chief Executive, Americas, SWIFT, "The availability of the XBRL corporate actions taxonomy is a significant milestone that brings us one step closer to solving an age old problem that has plagued the industry for years."

Irish Revenue Commissioners announce XBRL Adoption Plans

DUBLIN, September 29, 2010 – Revenue Commissioners Ireland announced today the advancement of Irish Government taskforce on Reduction of Administrative Burden after extensive collaboration with XBRL Ireland:

“In support of mandatory eFiling Revenue is planning to implement an XBRL solution to facilitate the electronic filing of financial statements and tax computations. Revenue has been following the development of XBRL since its inception. It believes given the current level of maturity of XBRL and the widespread international adoption of the standard, not least by the Securities and Exchange Commission in the United States and HMRC in the UK with whom it has many mutual customers, that the time is right to adopt the standard. In addition, in many administrations, the implementation of XBRL has been led by government organisations in recognition of the broader national economic benefits a common standard will bring. As one of the largest processors of information in the country Revenue has a role in furthering

this agenda. It also recognises the fact that a common standard, once widely adopted throughout the Community, will facilitate a reduction in the regulatory reporting burden currently endured by business. Revenue will be engaging in widespread consultation with the Institute, practitioners, software companies, and business and other representative bodies to ensure the successful delivery of this project. It is also

fully engaged with other regulators with whom business must engage such as the Central Statistics Office and the Companies Registration Office. The implementation of XBRL in other administrations has been the result of collaboration between all interested parties and there is no reason why this approach cannot be successfully applied here in Ireland.”

Conor O'Kelly - Director, XBRL Ireland