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Common XBRL Misconceptions

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XBRL can be complicated to understand and implement, but there’s no doubt that it’s here to stay. This presentation, which lists four common XBRL misconceptions and their corresponding realities, offers an opportunity to learn the basics and can help guide your company toward XBRL compliance.

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  • 1. Common XBRL Misconceptions...and the facts that reveal the truth
  • 2. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™2Since mandated in 2009,XBRL has caused confusion anduncertainty in financial reporting.??? ????
  • 3. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™3the SEC’s XBRL grace period ends.It’s time for organizations to focus on XBRL complianceand learn the truth about common XBRL misconceptions.October 31, 2014On
  • 4. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™4XBRL Misconception #1
  • 5. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™5When unsure about whichstandard tag to use, createan extension tag.
  • 6. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™6?What’s thereality??????? ? ?
  • 7. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™7Extension tags are overused.One studyreveals that22.2%of reports fromthe financial industryuse them.11Columbia Business School Center for Excellence in Accounting and Security Analysis.Democratizing Transparency. New York: 2010. http://www4.gsb.columbia.edu/filemgr?file_id=7216992
  • 8. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™8Why is this problematic?
  • 9. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™9It undermines XBRL’s primary goal to make iteasier for analysts and investors to compare companies…
  • 10. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™10…and:Subjective extension tags leave more possibilityfor error, meaning extra costs for the filer.
  • 11. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™11So, what now?Extension tags will remain, but filersshould apply them with discretion.
  • 12. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™12More extensionsmore manual labor & higher costs.=
  • 13. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™13Align filings with XBRL best practices.One Solution:Source in-house software that offersaccess to precedents and searchableXBRL taxonomy and tags.XBRL</>
  • 14. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™14XBRL Misconception #2
  • 15. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™15Outsourcing XBRL tagging is the best option.
  • 16. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™16?What’s thereality??????? ? ?
  • 17. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™17Outsourcing has many disadvantages, meaningin-house XBRL tagging is the favorable choice.XBRL</>
  • 18. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™18??????? ? ?Why?
  • 19. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™19Outsourcing ismore expensive.costlier than filing XBRLdocuments in-house.2XBRL</>30%2Gartner. Financial Statement Production Solution Increase Market Penetration. Stamford: 2010.http://www.gartner.com/id=1466426
  • 20. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™20XBRL</>And…It shifts accountability from the filer to the outsourcer.This leaves room for errors and doesn’t allow forinternal XBRL proficiency to grow.XBRL</>
  • 21. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™21Other negative implications includeSecurity issuesPoor reportingwork processesHigher riskfor errorsLonger turnaroundtimes & potentialfor late filings
  • 22. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™22??????? ? ?So what now?
  • 23. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™23When it comes to in-house vs. outsourcing, thenumbers speak for themselves…In 2012, 50% of large accelerated filerschose to bring the tagging in-house.33LogixData Analysis of XBRL Vendors and Their Market Share for 2012 and 2011. 13 Feb, 2013.http://www.logixdata.com/blog/bid/143011/Analysis-of-XBRL-vendors-and-their-market-share-for-2012-and-2011
  • 24. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™24….this is a ~25% increasefrom the year before.44LogixData Analysis of XBRL Vendors and Their Market Share for 2012 and 2011. 13 Feb, 2013.http://www.logixdata.com/blog/bid/143011/Analysis-of-XBRL-vendors-and-their-market-share-for-2012-and-2011
  • 25. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™25XBRL Misconception #3
  • 26. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™26XBRL makes companies too transparent.
  • 27. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™27?What’s thereality??????? ? ?
  • 28. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™28“XBRL in no way requires a company tochange how, what, or when to report financialinformation. It does not provide more datathan standard financial statements.”55XBRL US. XBRL US GAAP Taxonomy Preparers Guide. Washington: 2008. http://xbrl.us/Documents/PreparersGuide.pdf
  • 29. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™29??????? ? ?Why?
  • 30. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™30Filers report the same information, but XBRLpresents it in a computer readable format tomake it more digestible.XBRL
  • 31. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™31??????? ? ?So what now?
  • 32. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™32Filers should remember:XBRL reporting is for the benefit of investors.Using it won’t put you at a competitive disadvantage.
  • 33. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™33For Example - Radyne CorporationCompany’s trading averagesbefore XBRL adoption:After XBRL adoption:20,000shares/day135,000shares/day66PR Newswire. XBRL for the IRO: Benefiting from Interactive Data. PR Newswire Association LLC: 2011.http://promotions.prnewswire.com/rs/prnewswire/images/WP_XBRL_Benefiting_from_Interactive_Data.pdf
  • 34. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™34XBRL Misconception #4
  • 35. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™35SEC penalties for XBRLnon-compliance aren’t a concern.</>XBRL
  • 36. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™36?What’s thereality??????? ? ?
  • 37. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™37They are.
  • 38. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™38??????? ? ?Why?
  • 39. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™39After this date, penalties for XBRLnoncompliance will likely become harsher.the SEC’s XBRL grace period ends.October 31, 2014On
  • 40. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™40…of those filings, 5,000 problems were identified.7Last year, 1,400 XBRL filings were submitted to the SEC…7XBRL US. Avoiding Common Errors in XBRL Creation. Washington: 2010.http://xbrl.us/research/documents/avoidingerrorswhitepaper.pdf
  • 41. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™41??????? ? ?So what now?
  • 42. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™42Companies need to focus on reducingerrors by making a stronger effort tolearn XBRL inside and out.XBRL
  • 43. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™43Taking responsibility for XBRL reportingnow will mean a decreased risk for harsherSEC penalties after the grace period ends.
  • 44. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™44Read this:Find out what’s up and coming for XBRL this year.Read our whitepaper XBRL Trends to Expect in 2013Print this:Or see who comes out on top – in-house or outsourcedXBRL solutions - in this XBRL Cup InfographicResources
  • 45. www.DisclosureNet.com | Copyright © 2013 DisclosureNet™45Looking for a quick, easy way to pull information from XBRL filings? Contact us.DisclosureNet™330 Bay Street, Suite 200Toronto, ON M5H2S8T: 866.974.3638F: 416.913.0446General InquiriesT: 866.974.3638 x0info@disclosurenet.comSolutionsT: 866.974.3638 x2solutions@disclosurenet.com