XBRL Basic Concepts

Agenda
XBRL Meaning and Evolution XBRL Structure Taxonomy Instance Document Benefits and Application

XBRL - Meaning
The Extensible Business Reporting Language (XBRL) is one of the family of XML . It is a language used for creating business reports. The reports could be financial and non financial. Financial Reports Balance sheet Cash flow statements Income statements Non Financial Reports Performance measurements Regulatory reporting forms Loan applications

It is also a standard means of communicating information between businesses and Internet. Extensible- Designed to allow addition of new features at a later date

 XBRL original idea conceived by Charles Hoffman XBRL Developed by XBRL International XBRL International- A non-profit consortium of major companies, organisations and government agencies. These include the worlds leading accounting, technology, government and financial services bodies. This collaborative effort began in 1998 and has produced a variety of specifications and taxonomies to support the goal of providing a standard, XMLbased language for digitizing business reports in accordance with the rules of accounting in each country or with other reporting regimes such as banking regulation Current specification XBRL is version 2.1 Specification provides fundamental definition of how XBRL works

XBRL History

XBRL - Evolution
Internet became a success as a conduit for e-commerce, e-mail Internet is being increasingly used as a medium for electronic delivery of business information However, there are issues
Variety of incompatible languages Whole range of incongruent platforms Data stored in HTML or PDF formats are often not queriable The information is not stored in an easily comparable format It takes time to access the information

Accordingly, the need arose to ensure faster, efficient and reliable electronic exchange of business information XBRL has been developed for standardizing the information reported electronically

XBRL Reports
To get business reports, XBRL describes two kinds of documents Taxonomy and Instance documents. Each document serves a specific purpose and together these documents constitute a business report

Business Reports

Taxonomy - Meaning
Taxonomy documents defines the concepts that are to be reported. A concept is a basic piece of information in a report. For example, Taxonomy document may be created for a simple balance sheet. In this case Taxonomy document will define the following concepts.

Assets Current assets Stock Debtors

these concepts.

Loans Accounts Payable Equity Current liabilities

Taxonomy document also describes the relationship between

Taxonomy Structure
Taxonomy structure

Schema file- That contains the Definition of Business Reporting concepts

Linkbase Defines the Relationship between Elements

Defining concept
Concept

Elements

Name Current Assets, Debtors, Current liabilities

Substitution groupItem or tuple

TypeMonetary type String type Date type

Balance Debit or Credit

Examples
<Element Name > = Current Asset Type = Xbrl: monetaryitemType substitution Group = Xbrli:item Xbrli:balance=debit/>

Instance with Tuple Tuple is an Element that contains other elements. It is used when a concept cannot be properly understood independently. For example to define an address with Street name, city and postal code- In this address is created as Tuple <elementname=addresssubstitutiongroup=xbrli:tupletype= stringitemtype/> <elementname=Streetsubstitutiongroup=xbrli:itemtype= stringitemtype/> <elementname=citysubstitutiongroup=xbrli:itemtype= stringitemtype/> <elementname=postalcodesubstitutiongroup=xbrli:itemtype= stringitemtype/>

Relationships Taxonomy document Not complete without describing Relationships Relationship between concepts are created using Xlink Xbrl uses Xlink for different purposes in Xbrl Taxonomy documents Definition links Calculation links Presentation links

Definition Relationship

Defines how the concepts are related to each other

Equivalency Relationship

Dimension- Element and Element-Dimension These are used to express relationships between two concepts that are considered Equivalents For instance Total of assets by geographical area should be equal to total of assets by Product line

Calculation Relationship Calculation relationship shows how concepts participate in computation and summation It would show how stock, debtors would sum up to current assets or how current liabilities and other liabilities would sum up to total liabilities Calculation weightage relationship would also include

Presentation Relationship
Presentation relationship defines how concepts should be presented or displayed The groupings can be performed in many ways For example, a Balance Sheet contains Assets,

Equity, and Liabilities

Assets consist of Current Assets and Non-current Assets, etc.

The presentation linkbase helps organize these

elements using parent-child relations (a hierarchical structure)

Structure of Links
Xlink uses locators and Arc to create a relationship between two concepts Locators Identifies where the concepts are defined Arc is created that connects the Locators

Name Space
XBRL not restricted using one taxonomy ( vocabulary) at a time Name space is used When more than one taxonomy is used

Extending Taxonomies
Taxonomies Extensibility allows to build on Existing Taxonomy For instance A taxonomy for a company can be built on an existing Taxonomy of a Accounting standards board Company specific new elements and relationships can be added and defined to the existing taxonomy

Example of Extended taxonomy

Instance Document Taxonomy document does not show any value. It is just concepts and relationships The values are contained in the Instance document Example of an Instance document
Concept from Taxonomy document Value As of date

Accounts payable Stock Loans

90 50 30

March 31 2009 March 31 2009 March 31 2009

When concepts from taxonomy documents are reported in an Instance documents with Value, they are referred to as facts Besides the above, it also gives information of as on what date, the details are given Instance document also does not show any relationship between concepts. The facts are jumbled together

Business reports
When a taxonomy and Instance documents are combined together, then it becomes a business report

Business reports
When a taxonomy and Instance documents are combined together, then it becomes a business report

INSTANCE DOCUMENT STRUCTURE

ITEM

ITEM ATTRIBUTE
NON - NUMERIC CONTEXT

NUMERIC CONTEXT

UNIT

ENTITY

PRECISION

PERIOD

SCENARIO

Example of an Instance document- coding

XSLT
Important part of XBRL Data is separated from concepts Data recorded in instance documents Can be interpreted both by humans and computers XBRL Instance document not a pretty sight Needs to be transformed into proper form for analysis and interpretation Extensible Style Language Transformation (XSLT) style sheets, or Cascading Style sheets (CSS). Both XSLT and CSS are just XML standards used for the presentation of data.

Why two documents

To reuse the reporting terms Every time a balance sheet is prepared, only a new instance document is to be prepared as only the facts are changing. The meaning of concepts remain the same Also when instance document use concepts from same taxonomy, the facts are comparable. As the definition of the concepts, say assets, the assets of one balance sheet can be compared with the assets in another balance sheet The more fluid information is captured in Instance document and the more static information is captured in the Taxonomy documents.

With XBRL: Multiple Outputs from a Single Specification

Printed Financials
Accounting System

Regulatory Filings

XBRL

Web Site

Other Sources of Information

Tax Returns Bank Filings

5/1/2012

28

XBRL: Information flow TO stakeholders

Printed Financials Regulatory Filings
Web Site

Investors

XBRL

Tax Returns Bank Filings

5/1/2012

Other Parties

29

Who are using XBRL ?

B2G - Regulatory Applications
SEBI INCOME TAX

B2L Business to Lenders

Banks

B2M Business to Markets

Traditional financial reporting Business performance reporting

Internal applications

Xbrl- Advantages
Time saving Automating the process of data collection. Multiple report preparation takes less time. Re keying of data avoided. Xbrl coded information can be fed in to various instance documents to create required customized outputs. Timelyavailable within a reasonably short period from the time of measurement Accuratefree of data anomalies and errors and tested for obvious manipulation. Reliability of data is enhanced

Better data analysis and comparability- Efforts focused on analysis and decision making rather than laborious process of data compilation and reconciliation
EfficientThe cost of collecting the information proportionate to the value of the data collected. Xbrl enabled data can be more easily searched, analysed and converted into any other form Companies will benefit from growing importance of websites as a means of communication- Improve Investor relationship

Live case of XBRL benefits

The Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Federal Reserve System (FRS), known collectively as the FFIEC Call Agencies, wanted to improve the collection and management of financial institution data. Call reports The FFIEC provided Call Report software vendors with an XBRL, version 2.1 taxonomy that provides all content requirements, formulas for data validation criteria, plain English edit messages, capability to capture and report each institutions explanations for valid data discrepancies and/or fluctuations, and common Instance Document output for transmission (i.e., Internet or Web Services). Implemented XBRL based report filing system after providing for various validation checks in the software. All the data would have to pass all validity requirements before the Financial Institutions could transmit data

Live case of XBRL benefits ( Cont)

Value realised New Old process process 95% 66% Cleaner data- Logical relationship between data furnished Data accuracy- Arithmetical accuracy

100%

70% weeks

Faster data inflow From the Less calendar quarter end than 1 day Faster data access Publishing data for public Increased ProductivityBanks/analyst 1 day

10 days

550-600 450-500

Workflow: Updating Financial Models

Current Workflow Report published to the web inHTML or PDF format Analyst manually transcribes numbers into spreadsheet model and analyses results quickly in order to get a comment out

Process with XBRL Report published in XBRL format

Numbers automatically loaded into

spreadsheet by an Excel add-in Analyst has more time to analyse results with confidence

Company results announced

Financial Model updated

Analysis

Conclusions

XBRL in India - Developments

ICAI Draft general purpose financial reporting XBRL taxonomy finalised for commercial and Industrial establishments Draft Taxonomy developed conforming to Indian Accounting standards and company law Draft taxonomy covers Balance sheet, Profit and loss and cash flow Taxonomy for banks and NBFCs under preparation RBI In oct08 had asked all banks to file the Basel-II return on capital adequacy returns in XBRL format

What to do?
Identifying how many systems are used in producing business information Identifying the complexity of business process that go in to producing business information Measuring the number of person hours that go into producing key management information and comparing that figure with the amount of time that goes into analysis Critically examining the relevance (the timeliness and predictive value) of key management information To discuss the potential effect of digital business reporting on external investor relations with the investor-relations staff and advisers. Cost savings that can be realized from receiving, storing and sending information in XBRL format To ensure that the IT staff is aware of the impact that digital business reporting will have on the activities and that they are getting up to speed on the technical aspects.