Taxonomy Review Jennifer S. Moriarty, FASB


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  • Watch out for when Campbell posts his slides. Evolution of tax.- not creating anything new, existing information, being explicit about information today and lends itself to who is involved in the process, they know that the information, use checklists and tools and get together with the techies to make sure the taxonomies are complete. Define taxonomy, sources of worldwide taxonomy creation. What are the reference points? Accounting standards, terms, required to be disclosed Acct enabler: created by public accounting firms, disclosure checklists, using as reference for terms, can see from coverage perspective if all…. FS; true gut, check that end user (you/audience) the financial statements are mapped/applied to the taxonomy. Mention extensions. Hoping these taxonomies would cover most of the required items, without requiring in-depth extension. Use financial statements to make sure there’s enough coverage Software tool names: Decisionsoft, UBMatrix, Fujitsu which help techie people in creating tax, and provide mechanism to easier enable to let reviewer to see structure of tasx, hierarchy, and map of financial statements. Participants: multiple people involved, tradt-0aicpa, public accounting firms, regulators-FDIC, in process implementing…make sure our process is consistent with their process. Deal with a lot of fin information (Call Reports) Taxonomy Development Initiation Development Internal Review Working Draft Released Public Release Final Approval
  • Refer back to Jeff and Campbell slides Highlight the public review process (the reason we’re here today is because of this process) Be very brief
  • People to review to make sure taxonomies are accurate if we can get industry experts from public/private co and add value to tax and to the usability/applicability to their companies As continue to move and create taxonomies, because it’s an ongoing process - for the process in near future, several industries, we need continuous feedback for what’s in the tax. , make sure new developments and standards are incorporated into taxonomies We are serious about your comments and they will be a valuable contribution to creating effective taxonomies. That’s why we’re here today. In a lot of review processes – it’s usually final when released for comment. That’s not XBRL’s process.
  • Techie – link bases, tuples, taxonomy structure, namespaces Why are we here today, there are diff types of reviews: Techies, software programming, computer behind the scenes “angle brackets” need the techie people to do this. Today we're looking at domain experts Accounting terms meaningful and accurate?
  • Let audience know where to get these taxonomy files.
  • Notes:
  • Notes:
  • Notes:
  • Notes:
  • Since we’re interested in the content of the taxonomy. These are things we’re looking for: Are label names appropriate? Many call different. Looking for global consistent way of naming items Anatomy of an Element? What XBRL tells you about each element. Table/defining…slide for each, basic level. Josef definitions to growth Yossef slides: slides/handout
  • Show you on this PDF form, the different types of elements Presentation View
  • Diff tech by member of the consortium Take your co financial statements, balance sheet and income statement mapped to specific terms in the taxonomy – so useful with your own financial statements Other detailed info that is not required, Depth of financial statements review: face of Financial statements -good rev tech to match the lines of the financial statements to the taxonomy, so that all info can be mapped and extracted for analysis. The more detail the better the analysis, individual tags…(e.g. pension tax) at high level have all topical tags, then if fn is particular to the industry, use more tags. Main concepts are covered, because it is time consuming process Footnotes are less complete – set their expectations…not a lot of time has been focused on detailed footnote as has been the financial statements . Create instance document, use XBRL software tools to map financial statements to an instance document. Advanced topic. Unless you’ve spent enough tie with tools, spend time with PDF and excel versions Refer to the scope document on website for taxonomy to be reviewed for level of detail they should expect. Also types of reports they’ll cover, how comprehensive and what items are usually in extensions. Manual review – PDF and excel files. Keeps it simple, run down list of element, are the attributes correct etc…
  • Accounting elements, labels, period, data …all that info is accurate…is a concept missing? Concept of tax is accounting terms, should focuses on these areas that have exposure to this concept More granularity for types of feedback….Yossie Accuracy of info, element correct at one level but at deeper level would be diff for other companies. Break up taxonomy and give to separate departments to make sure taxonomy is complete Uniqueness of their company to help us – e.g. derivatives department use their policies and checklists Types of feedback: missing (completeness) inaccurate (accuracy) Inaccuracy: goodwill is an asset, so is cash, they have debit balances, instant…
  • discuss scope missing items breadth of taxonomies, scope issue, what reports does it try to cover depth of review, original face of financial statements vs notes of f/s. what belongs in the big taxonomies and what belongs in the Company extensions. If unique term to your organization, that doesn’t spread to together companies. Don’t add new terms that are company specific. we want terms that relate across companies Important – further in dept review, not everythin is in your fs would be in the core tzxonomy, that’s why we have extensions Elements for taxonomy are fairly prevelant/commonly used throughout industry and should be in the taxonmy.
  • In gen review, go through existing elements, captured right attributes? Columns vs. rows…..all data types, all balance types……or go by elements.
  • Manual review – review against financial statements and review against standard or disclosure checklist. For a manual review you review different attributes using either financial statements or disclosure checklists/accounting standards focus on label/description hierarchy, indents line item, look at all components references – if know the std that’s good, they can also do additional research. Ref takes more effort. break out separate review (diff experts of Company) Comment on blank references also.
  • To follow on to the pros and cons of manual reviews I will walk you through the review of an element using the Presentation View of the BASI PDF taxonomy (the one saved earlier in the session) Note: Not 100% of all items on the financial statements will be listed in the taxonomy. Elements listed are ones you expect to see commonly across many different companies. E.g. Microsoft – “Xbox inventory”, this is unique to this company and would be listed as part of their extension taxonomy. You wouldn’t expect to see “Xbox inventory” on Computer Associates or IBM’s financial statements. You would expect Goodwill to be on those f/s. Identify the element you want to check.
  • Here’s the information that you will be looking for in the taxonomy
  • Using the presentation PDF file… Goodwill, find term in taxonomy, does definition meet term, is it a number, covers a point in time, what’s it’s natural balance. Are components accurate?
  • Is the description correct/accurate? Are references accurate? Refer to accounting checklists and accounting standards This is one of the least likely types of reviews that people will do e.g. Paragraph to paragraph review of the standard (eg/GAAP pension taxonomy)
  • This is the presentation view we have been exhibiting throughout this session. The elements listed will flow similar to the financial statement presentation. Make sure Goodwill is not listed as a liability
  • Different view with the same information from the taxonomy AFS rolls up to Marketable securities which roll up to assets on the stmt of financial position. RECAP: We’ve just gone through a discussion and illustration of the different ways to review a taxonomy using different methods and sources including: MANUAL vs. Software TOOLS (Instance documents) and financial statements, accounting standards, checklist etc… XXXXXXXXX Explain that totals are on top. No time today to explain signs and weights that determine how the different elements are treated within the calculation If they wasn’t more information they should contact the champions that will be identified later in the day.
  • STOP FOR QUESTIONS? Based on what you’ve digested so far, I’m sure you’re asking yourself, “Where do I go for guidance/information?” Let’s talk about Review Enablers: Some of these are familiar – we’ve already talked about them. You can always go to the XBRL website. I’ll show you where to get the Reviewers Guide and the Feedback form review guide, can be obtained on website. Screen shot next slide Handouts – where to go to get this information (CHEAT SHEET)-still o/s item comprehensive list or resources – who to contact/where to get the contact info. Have a champion for each industry that can be contacted Sal –C&I Rob -INS TBD – BASI general-Brad & Jeff Pros/cons: it’s a process, PDF easier for 1 st time users. manual vs. software – advanced topic, let them know where to find info. Refer to website, vendors?
  • Refresh their memory – Where to access the “Summary Info for the BASI Taxonomy”
  • How to find the Reviewer’s Guide from the website.
  • use excel taxonomy file and either add a column or highlight (presentation or calculation hierarchy) tell them to cross reference to PDF. so the excel is really just a feedback doc. Look at PDF and have comment, use excel file and type comment into empty. make sure and mention them to be precise with their comments. screenshots use step by step
  • This is the same taxonomy PDF file that we used earlier. Using this example, we will assume that the balance type for Goodwill was listed incorrectly as a credit.
  • This is the what you will see when the file is opened. Feel free to identify/label the adjacent column for comments. LET THE AUDIENCE KNOW THAT THEY DON’T NEED TO KNOW WHAT AN EXTENDED LINK IS…if the question arises. It’s for the advanced class. Show audience where to get this spreadsheet.
  • Note for Reference. ONLY IF QUESTION ARISES – If they cannot find a reference for a new element, depending on their resources or if they have the time, but we’ll accept comments without the references.
  • 60 day review period is for currently out for review, the 60 days start for IM and BD when they are released. Final taxonomies will be available by the end of the year.
  • Add websites?
  • Taxonomy Review Jennifer S. Moriarty, FASB

    1. 1. Taxonomy Review Jennifer S. Moriarty, FASB Yossef Newman, Deloitte Sharyn Kohen, Ernst & Young
    2. 2. Taxonomy Review <ul><li>Evolution of a Taxonomy </li></ul><ul><li>Elements to Review </li></ul><ul><li>Review Techniques </li></ul><ul><li>Review Enablers </li></ul><ul><li>Action Items </li></ul>
    3. 3. Evolution of a Taxonomy <ul><li>US GAAP and International Financial Reporting Standards (IFRS) taxonomies created using: </li></ul><ul><ul><ul><li>Accounting and Reporting standards </li></ul></ul></ul><ul><ul><ul><li>Accounting enablers (e.g. checklists) </li></ul></ul></ul><ul><ul><ul><li>Financial statements </li></ul></ul></ul><ul><ul><ul><li>XBRL tools </li></ul></ul></ul><ul><li>Participants: </li></ul><ul><ul><li>Trade organizations </li></ul></ul><ul><ul><li>Public accounting firms </li></ul></ul><ul><ul><li>Regulators </li></ul></ul>
    4. 4. Evolution of a Taxonomy (Cont.) <ul><li>Taxonomy Process </li></ul><ul><ul><li>Creators </li></ul></ul><ul><ul><li>Domain groups </li></ul></ul><ul><ul><li>Internal review </li></ul></ul><ul><ul><li>Public review </li></ul></ul>
    5. 5. Importance of Public Feedback <ul><li>Consortium process: Public review </li></ul><ul><ul><li>Accuracy of taxonomies </li></ul></ul><ul><ul><li>Area experts </li></ul></ul><ul><li>Meet the needs of the ultimate users of taxonomies </li></ul><ul><li>Continuous public feedback is integral to effective taxonomy development </li></ul><ul><li>Public comments will be considered and incorporated where appropriate </li></ul>
    6. 6. Types of Reviews <ul><li>Domain </li></ul><ul><ul><li>Industry </li></ul></ul><ul><ul><li>Accounting </li></ul></ul><ul><ul><li>Financial reporting </li></ul></ul><ul><li>Technology </li></ul><ul><ul><li>Software validation </li></ul></ul><ul><ul><li>Conformity with FRTA </li></ul></ul>
    7. 7. Where do you find the taxonomies? XBRL website Under “What’s New: US releases 3 major taxonomies for US GAAP…” click on “ Learn More…”
    8. 8. Choose the taxonomy you will review Click on the BASI taxonomy
    9. 9. Home page of the BASI taxonomy Scroll down to “ Printout of taxonomy elements”
    10. 10. Select both PDF and Excel files of the Presentation Report Save both PDF and Excel taxonomy files
    11. 11. Anatomy of an XBRL Element XBRL Element Financial Reporting Concept
    12. 12. Anatomy of an XBRL Element XBRL Element Basic Attributes Relationships To other Elements & Information
    13. 13. Anatomy of an XBRL Element XBRL Element Basic Attributes Data type Balance Type Period type Description Tag Name (computer readable) Label (human readable) Monetary / String, etc. Debit / Credit Instant / Duration “ Amount paid in excess of the value assigned to the identifiable net assets acquired”. IntangibleAssetsGoodwill e.g. - “Goodwill”
    14. 14. Anatomy of an XBRL Element XBRL Element Publisher : FASB Name : Statement of Financial Accounting Stand. Number : 142 Paragraph : 23 URI : http:/ URIDate : 2004-08-01 Net Goodwill = Goodwill – Accumulated Amortization Relationships To other Elements & Information Calculation Presentation Reference Assets Cash & cash equivalents Property plant & equipment Goodwill Total Assets
    15. 15. Elements to Review <ul><li>Focus on accounting terms, not XBRL technology </li></ul><ul><ul><li>Accounting: </li></ul></ul><ul><ul><ul><li>Concept </li></ul></ul></ul><ul><ul><ul><li>Label (not XBRL technical name) </li></ul></ul></ul><ul><ul><ul><li>Description </li></ul></ul></ul><ul><ul><ul><li>Balance Type (e.g. Debit / Credit) </li></ul></ul></ul><ul><ul><ul><li>Data type (e.g. monetary, string) </li></ul></ul></ul><ul><ul><ul><li>Period type (e.g. duration, instant) </li></ul></ul></ul><ul><ul><ul><li>References </li></ul></ul></ul><ul><ul><ul><li>Presentation order </li></ul></ul></ul><ul><ul><ul><li>Calculation (advance topic)* </li></ul></ul></ul>Basic attributes Relationships
    16. 16. Taxonomy in PDF Balance Type “Credit” Period Type “Instant” Date Type “Monetary” Label “Accounts Payable” Reference “APB 21” Description “ Amounts due to third parties for goods or services received. Amounts have usually been invoiced”
    17. 17. Review Techniques <ul><li>Comparison of taxonomies to: </li></ul><ul><ul><li>Company financial statements </li></ul></ul><ul><ul><li>Internal accounting checklists / policies </li></ul></ul><ul><ul><li>Accounting standards </li></ul></ul><ul><ul><li>Industry Guides / common practice </li></ul></ul><ul><li>Manual review of taxonomy </li></ul><ul><li>Create instance documents (advanced topic)* </li></ul>
    18. 18. Review Techniques (Cont.) <ul><li>Type of Feedback </li></ul><ul><ul><li>Missing terms </li></ul></ul><ul><ul><li>Inaccurate information </li></ul></ul><ul><li>Review performed by: </li></ul><ul><ul><li>Finance department </li></ul></ul><ul><ul><li>Financial statement preparers </li></ul></ul><ul><ul><li>Other accounting experts </li></ul></ul>
    19. 19. Review Techniques (Cont.) <ul><li>Depth of financial statement review </li></ul><ul><ul><li>Face of the financials </li></ul></ul><ul><ul><li>Notes </li></ul></ul><ul><li>Public taxonomy vs. Company extension </li></ul>
    20. 20. Review Techniques – Manual Review Data Type “Monetary” Balance Type “Credit” Period Type “Instant” Label “Accounts Payable” Description “ Amounts due to third parties for goods or services received” Reference “APB 21”
    21. 21. Review Techniques Balance Type “Credit” Period Type “Instant” Data Type “Monetary” Label “Accounts Payable” Reference “APB 21” Description “ Amounts due to third parties for goods or services received” Review against financial statements Review against Accounting Standards, Industry Guides or Disclosure Checklists
    22. 22. Comparison to Company financial statements Look for the element “Goodwill” in the taxonomy .
    23. 23. Comparison to financial statement Primary Terms Taxonomy <ul><li>Review of elements: </li></ul><ul><ul><li>Balance type: Debit </li></ul></ul><ul><ul><li>Period type: Instant </li></ul></ul><ul><ul><li>Data type: Monetary </li></ul></ul><ul><ul><li>Label: Goodwill </li></ul></ul><ul><ul><li>Description: Amount paid in excess of the value assigned to the identifiable net assets acquired. </li></ul></ul><ul><ul><li>Reference: FASB Statement No. 142 </li></ul></ul>
    24. 24. Comparison to financial statement Primary Terms Taxonomy
    25. 25. Comparison to financial statement Primary Terms Taxonomy
    26. 26. Review the Presentation of the Elements “ Statement of Financial Position” “ Assets” is correctly listed on the Statement of Financial Position “ Cash and due from Banks” and “Interest Bearing Deposits in Banks” are correctly listed as Assets on the Statement of Financial Position
    27. 27. Review the Calculation of the Elements – Remember, Totals are on top! Numerous types of line items for “Available for Sale Securities” total to the line item “Available for Sale Securities” All line items for “Marketable Securities” (e.g. Trading, AFS and HTM) total to the line item “Assets” “ Assets” are included on the Statement of Financial Position
    28. 28. Review Enablers <ul><li>Reviewer’s Guide to Financial Reporting Taxonomies 1.0 </li></ul><ul><li>PDF taxonomy reports </li></ul><ul><li>Taxonomy editing software / instance creation software </li></ul><ul><li>GAAP Checklist, financial statements, accounting standards </li></ul><ul><li>Where to find information ( </li></ul><ul><li>Feedback form </li></ul>
    29. 29. Where do I go for the Reviewer’s Guide? Start at the Reporting Taxonomy Framework webpage Click on the BASI taxonomy
    30. 30. Review Enablers – Reviewer’s Guide to Financial Reporting Taxonomies 1.0 On the homepage of the BASI Taxonomy Scroll down to “Guidelines for Taxonomy Review” The Reviewer’s Guide is available in HTML and Word
    31. 31. Feedback Form <ul><li>Captures: </li></ul><ul><ul><li>Incorrect element attributes </li></ul></ul><ul><ul><li>Missing elements </li></ul></ul>
    32. 32. Where do I get the Feedback Form? Excel file of the Presentation Report The Excel taxonomy file is the Feedback Form On the homepage of the BASI Taxonomy Scroll down to “Printout of taxonomy elements”
    33. 33. Feedback process – incorrect element attributes c Assume that the balance type for Goodwill was listed incorrectly as a “Credit”
    34. 34. Feedback Form for BASI taxonomy – incorrect element attributes Expand the row to view all the elements within the “Statement of Financial Position” This is the Excel file of the BASI taxonomy you obtained from the website
    35. 35. Feedback Form for BASI taxonomy – incorrect element attributes Find the element “Goodwill” on the Feedback Form Include your comment in the column next to the element “Goodwill” Be Clear and Concise!
    36. 36. Feedback Form for BASI taxonomy – missing element “Goodwill” Assume the element “Goodwill” was missing from the taxonomy
    37. 37. Feedback Form for BASI taxonomy – missing element “Goodwill” <ul><li>For the element that is missing from the taxonomy include the following details: </li></ul><ul><ul><li>Element label: “Goodwill” </li></ul></ul><ul><ul><li>Element description: “Amount paid in excess of the value assigned to the identifiable net assets acquired” </li></ul></ul><ul><ul><li>Balance type: “Debit” </li></ul></ul><ul><ul><li>Period type: “Instant” </li></ul></ul><ul><ul><li>Data type: “Monetary” </li></ul></ul><ul><ul><li>Reference: “FASB No. 142” </li></ul></ul>
    38. 38. Feedback Form for BASI taxonomy – missing elements Find where the element “Goodwill” should be presented in the taxonomy Include new element detail in the comment area Missing element: Goodwill; description: Amt paid in excess of the value assigned to the identifiable net assets acquired; Debit; Instant; Monetary; Reference: FASB No 142
    39. 39. Where do I send my Feedback Form? <ul><li>Email the feedback form to the US Domain Working Group through Brad Homer at: </li></ul><ul><li>[email_address] </li></ul><ul><li>Don’t forget to include your contact information! </li></ul>
    40. 40. Action Items <ul><li>Visit the XBRL international web-sites </li></ul><ul><li>Review taxonomy review guide </li></ul><ul><li>Review taxonomy applicable to you </li></ul><ul><ul><li>Commercial & Industrial </li></ul></ul><ul><ul><li>Banking and Savings Institutions </li></ul></ul><ul><ul><li>Insurance </li></ul></ul><ul><ul><li>In Process </li></ul></ul><ul><ul><ul><li>Investment Management (public in November) </li></ul></ul></ul><ul><ul><ul><li>Broker Dealer </li></ul></ul></ul><ul><li>Provide feedback </li></ul><ul><ul><li>60 day review period – ending Nov 19 th </li></ul></ul><ul><ul><li>Feedback form </li></ul></ul><ul><li>Final release of taxonomies </li></ul>
    41. 41. Questions? <ul><li> </li></ul><ul><li>XBRL Taxonomy Contact Point: </li></ul><ul><li>Brad Homer </li></ul><ul><li>[email_address] </li></ul>