Sap Insider Webinar With Deloitte 10dec09 Final
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XBRL is here - are you ready?

XBRL is here - are you ready?

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Sap Insider Webinar With Deloitte 10dec09 Final Presentation Transcript

  • 1. XBRL is coming Is your company ready? Scott Rosenfelder Director - AERS Technology & Knowledge Management, Deloitte & Touche LLP Philip Mugglestone Director - Solution Marketing, SAP Jennifer Maddox Director - Solution Marketing, SAP December 10, 2009
  • 2. Agenda 1. The impact of XBRL on group financial reporting 2. Overview of SAP® BusinessObjects™ XBRL Publishing by UBmatrix 3. Demonstration 4. Summary and next steps © SAP 2009 / Page 2
  • 3. Agenda 1. The impact of XBRL on group financial reporting 2. Overview of SAP® BusinessObjects™ XBRL Publishing by UBmatrix 3. Demonstration 4. Summary and next steps © SAP 2009 / Page 3
  • 4. XBRL Basics XBRL (eXtensible Business Reporting Language) is a language for electronically communicating business and financial data • Based on XML, a widely-used Internet standard • Uses standardized “tags” that correspond to concepts and information included in financial reports • Facilitates automated retrieval and analysis of financial data © 2009 Deloitte Touche Tohmatsu
  • 5. The Benefits of XBRL in a data world Improves efficiency and reduces cost of data collection and analysis • Move from static, text-based data to “interactive data” that can be dynamically searched and analyzed • Reduces or eliminates error-prone manual data entry • Enables high value analysis of data vs. low value compilation of data Simplifies comparison of financial and business performance across companies, reporting periods and industries © 2009 Deloitte Touche Tohmatsu
  • 6. Benefits of XBRL in business reporting Common goals of many corporate finance functions map directly to the potential benefits of XBRL which companies may consider leveraging for their business reporting processes Common goals for a corporate finance function: • Reduced costs Potential XBRL benefits • Cost savings, efficiency, and • Stronger internal controls improved accuracy and reliability • Timely and accurate data • Transparency • Standardized systems, business • Enhanced business reporting processes and data elements and standardization • Seamless data exchange • Paperless environment between business units • SOA architecture for interoperability © 2009 Deloitte Touche Tohmatsu
  • 7. The SEC Mandate The SEC published rules requiring the use interactive data to improve financial reporting on April 13th, 2009 Highlights of the ruling: • Require most registrants to submit XBRL-formatted financial reports and schedules as an exhibit • Requirement is phased-in over three years, with largest registrants having to provide interactive data in filings for periods ending on or after June 15, 2009 • 30-day grace period for each initial filing of interactive data • For most registrants, the first XBRL filing will be 10-Q, 20-F or 40-F ‒ Registrants do not have to start with the 10-K © 2009 Deloitte Touche Tohmatsu
  • 8. Then SEC Phase in Timeline Registrant Category Effective Date Large accelerated filers • Domestic and foreign YEAR 1 • Filing using U.S. GAAP, and Periods ending on or after • Having a public float> June 15, 2009 $5 billion Large accelerated filers • Domestic and foreign • Filing using U.S. GAAP, and Periods ending on or after YEAR 2 • Having a public float between June 15, 2010 $700 million and $5 billion Most other registrants including • Smaller companies filing using Periods ending on or after YEAR 3 U.S. GAAP June 15, 2011 • Foreign private issuers reporting using IFRS © 2009 Deloitte Touche Tohmatsu
  • 9. Some Filing results so far and challenges ahead… • FY ending 6/15/2009 ‒ Mandated Participants - Public companies using US-GAAP ("accelerated filers") with >$5B market capitalization ‒ Result - 427 companies - 871 10-Q filings so far • FY ending 6/15/2010 ‒ Mandated Participants - All other "large accelerated filers“ using US-GAAP ‒ Expected Result – an additional 1500-2000 companies • FY ending 6/15/2011 and thereafter ‒ Mandated Participants - All public companies, including “foreign private issuers” using either IFRS or US-GAAP ‒ Expected Result – an additional 10,000 companies • Mandate on Tagging Detail ‒ FS footnotes and schedules initially tagged individually as a block of text ‒ After a year of this, filers also required to tag the detailed quantitative disclosures ‒ Estimated impact – 15X to 20X increase on the number of tagged data elements (and size of filing) © 2009 Deloitte Touche Tohmatsu
  • 10. Challenges seen today • Accounting is the most critical skill even though XBRL is a computer language – Identifying the appropriate tag is the most critical step which can be challenging due to the voluminous nature of the US GAAP taxonomies – There is a lack of guidance on tagging decisions and whether or not to create an extension – The SEC has also included over 200 technical rules in the EDGAR Filer Manual (EFM) on XBRL filings • Experience and lessons learned from first round of filers indicated the significant needs for registrants to perform their due diligence on XBRL filings instead of completely relying on filing agents for tagging decisions and accuracy – Potential lack of reviews and validations resulted in errors in XBRL filings – Companies working with certain service providers are only reviewing Excel deliverables not the XBRL submissions © 2009 Deloitte Touche Tohmatsu
  • 11. Challenges seen in the process so far Process Errors noted and/or feedback Key lessons learned Mapping • There is a lack of guidance around the mapping process for • Mapping requires the most judgment element selection and element extensions • Element selection • Expected challenges with year two detailed footnotes mapping • Extension creation - EDGAR Filer Manual requirements, Leading practices • Use of correct version of taxonomy Extending • Custom element created • Custom extensions limit comparability • When a core element exists • When a customized label would suffice • The creation of an incorrect linkbase can have serious ripple effect • Lack of customized label on correctly mapped core element consequences through the XBRL documents • Incorrect presentation/calculation information in extension linkbases Tagging • Incorrect data entry • Errors in tagging result in incorrect • Tagging incorrect amounts, duplicate tagging, omission of data flowing to financial data data from the tagging, etc. consumers • Data attribute errors • Decimals – rounding errors • Some tagging issues may be attributed • Signs - Data entered with improper sign to the software tools used • Context errors • Duplicate/unused contexts • Reviewed and updated methodology to • Complexity of detailed footnote tagging and rendering adapt to the year two challenge © 2009 Deloitte Touche Tohmatsu
  • 12. XBRL - The Bigger Picture XBRL can be leveraged to add value beyond financial reporting • Enhancing data quality and transparency • Facilitating more effective and timely business decisions • Streamlining business reporting processes and resources The SEC is seeking to leverage XBRL in a range of additional areas in addition to corporate financial reporting, including: • The disclosure of key mutual fund information • Certain reporting by credit rating agencies to be migrated to an XBRL format • XBRL as an enabling component of the SEC new IDEA reporting platform • Application of XBRL for reporting related to asset backed securities and the credit market XBRL is being leveraged more in qualitative reporting, such as ecological impact reporting © 2009 Deloitte Touche Tohmatsu
  • 13. XBRL - The Bigger Picture XBRL is part of a larger trend towards convergence and globalization of reporting standards • International Accounting Standards Board (IASB) ‒ The IASB has released an expanded IFRS XBRL Taxonomy • It is expected to support the broad adoption of XBRL for IFRS based reporting • International Coordination ‒ The SEC, IASB, and JFSA are taking steps to align their XBRL initiatives and taxonomy development efforts • National e-Government XBRL Initiatives ‒ Momentum is building around large scale “national” XBRL projects • Australia’s Standard Business Reporting (SBR) project • The Netherlands National Taxonomy Project (NTP) • These projects aim to improve efficiency and reduce costs borne by companies and governments ‒ Exchanges, regulators, and government agency activities • Canada, Korea, the UK and China © 2009 Deloitte Touche Tohmatsu
  • 14. XBRL - Moving Forward on XBRL Start taking steps to move forward on XBRL now • Obtain understanding of XBRL and the new US GAAP Taxonomy • Understand where your company falls in the SEC’s phase-in plan for XBRL-based financial reporting • Get connected to the decisions being made around the implementation of XBRL reporting tools and processes • Establish a plan for financial reporting teams and IT groups involvement in defining a sustainable process for converting and furnishing XBRL financials © 2009 Deloitte Touche Tohmatsu
  • 15. Agenda 1. The impact of XBRL on group financial reporting 2. Overview of SAP® BusinessObjects™ XBRL Publishing by UBmatrix 3. Demonstration 4. Summary and next steps © SAP 2009 / Page 15
  • 16. SAP BusinessObjects XBRL Publishing by UBmatrix Streamlining XBRL publishing for business users Speed Quickly navigate taxonomies and map data Easy to use drag-and-drop mapping environment Fast, thorough validation of generated XBRL documents Simplicity Works with EPM solutions and SAP Business Suite Link to and import disclosures stored in Microsoft Word Insulates users from dealing with complex XBRL syntax Flexibility Easily extend published XBRL taxonomies Complies with the XBRL 2.1 specification Supports basic and block‐text footnotes, dimensions, and business rules © SAP 2009 / Page 16
  • 17. Speed Quickly navigate taxonomies and map data Taxonomies can be large and complex containing thousands of elements During mapping, search and filter dialogs A allow business users to quickly navigate variety of the selected taxonomy useful search Browse the hierarchy options Full and partial search of taxonomy concepts and labels with smart filtering Separate views to display presentation, calculations, and definition Element detail view helps confirm match Synchronized views help users locate financial elements Search results automatically interact with the hierarchy tree © SAP 2009 / Page 17
  • 18. Speed Easy to use drag-and-drop mapping environment Rapid and re-usable mapping of financial statements and other Excel-based reports Drag-and-drop to map: Concepts Contexts Units (monetary, shares, etc.) Reports can be refreshed SalesRevenueNetGoods without having to re-map Map once Re-use often © SAP 2009 / Page 18
  • 19. Speed Fast, thorough validation of generated XBRL documents Validation encompasses both syntax and semantics Appropriate numeric values Does the Balance Sheet balance? Reports ensure the mapping process is complete, highlight inconsistencies, and ensure compliance Incomplete Mappings Report identifies partially mapped cells Calculation Trace Report helps diagnose errors and inconsistencies by viewing what was found versus what was expected Full Mappings Report provides a comprehensive list of mappings © SAP 2009 / Page 19
  • 20. Simplicity Works with EPM solutions and SAP Business Suite software SAP-approved XBRL reporting tool that’s integrated with our financial consolidation applications and SAP Business Suite SAP BusinessObjects Planning and Consolidation SAP BusinessObjects Financial Consolidation SAP Business Suite (including SEM-BCS) Via a common user interface Microsoft Excel © SAP 2009 / Page 20
  • 21. Simplicity Link to and import disclosures stored in Microsoft Word documents Disclosures are a key part of financial and compliance reporting Financial table footnotes Management discussion & analysis Required by the U.S. SEC Many organizations author this content in Microsoft Word Ability to attach Word documents and reference content from each document This approach offers the best of both worlds Leaves financial report authoring in a friendly Excel environment Narrative can be authored using Word © SAP 2009 / Page 21
  • 22. Simplicity Insulates business users from having to deal with complex XBRL syntax XBRL syntax is complex and not business user-friendly Comprehensive user interface avoids the need for business users to work directly with XBRL syntax XBRL instance documents are created by the application © SAP 2009 / Page 22
  • 23. Flexibility Easily extend published XBRL taxonomies Many organizations wish to extend their XBRL reporting beyond the standard taxonomies Provide extra information to investors to help differentiate from competitors Design and extend XBRL taxonomies using simple drag-and-drop editing functions Business rules editor Define relationships across extended links and link base types Many of the world's XBRL taxonomies have been modeled with the application IFRS, US GAAP, UK GAAP, FINREP Belgium, KOSDAQ, CRAS etc. © SAP 2009 / Page 23
  • 24. Flexibility Complies with the XBRL 2.1 specification Full compliance with the latest XBRL standards XBRL 2.1 Dimensions 1.0 (XBRL.org candidate recommendation) Dimensions Aggregation 1.0 (XBRL.org public working draft) XBRL Formulas 1.0 (working draft) Financial Reporting Taxonomy Architecture (FRTA) 1.0 Financial Reporting Instance Standards (FRIS) 1.0 (XBRL.org public working draft) Supports any taxonomy in use today © SAP 2009 / Page 24
  • 25. Flexibility Supports basic and block‐text footnotes, dimensions, and business rules Basic and block‐text footnotes User‐friendly method of capturing both plain text and block‐text/HTML (or formatted) XBRL footnotes Footnotes can be reused multiple times Multiple footnotes can be associated to a given reporting element Dimensional taxonomies, instance documents, and aggregation Business Rules Supports XBRL Formula 1.0 and Function 1.0 specifications Can specify formula expressions either in Excel-styled syntax or in the 2005 Draft XBRL Formula 1.0 syntax © SAP 2009 / Page 25
  • 26. Agenda 1. The impact of XBRL on group financial reporting 2. Overview of SAP® BusinessObjects™ XBRL Publishing by UBmatrix 3. Demonstration 4. Summary and next steps © SAP 2009 / Page 26
  • 27. The XBRL Publishing Process © SAP 2009 / Page 27
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  • 47. Mapping and Tagging © SAP 2009 / Page 47
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  • 57. Commentary and Disclosures © SAP 2009 / Page 57
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  • 69. Extending XBRL Taxonomies © SAP 2009 / Page 69
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  • 82. Agenda 1. The impact of XBRL on group financial reporting 2. Overview of SAP® BusinessObjects™ XBRL Publishing by UBmatrix 3. Demonstration 4. Summary and next steps © SAP 2009 / Page 82
  • 83. Summary Benefits Saves time and money Speed Quickly navigate taxonomies and map data Faster and easier to create Easy to use drag-and-drop mapping environment financial statements suitable for Fast, thorough validation of generated XBRL documents electronic submission to regulators Confidence and compliance Simplicity Works with EPM solutions and SAP Business Suite Ensures filings are accurate, complete, and meet all current Link to and import disclosures stored in Microsoft Word regulatory requirements. Insulates users from dealing with complex XBRL syntax Enables faster and more accurate audits at lower cost Supports the “last mile” of Flexibility finance Easily extend published XBRL taxonomies Complies with the XBRL 2.1 specification Streamlines consolidation, Supports basic and block‐text footnotes, dimensions, and reporting, and publishing business rules processes without sacrificing data quality © SAP 2009 / Page 83
  • 84. Next steps See www.sap.com/epm for: Solution briefs Streamlining XBRL publishing for business users Accelerating the financial closing process Optimizing the Transition to IFRS Efficient Business Planning and Consolidation Financial consolidation and reporting Financial information management Peer-to-peer intercompany reconciliation White papers The Financial Close - Optimizing Performance and Driving Financial Excellence Improving Intercompany Reconciliation for a Faster Close Streamlining Your Conversion to IFRS Recorded demos Streamlining XBRL Publishing for Business Users Accelerated Group Financial Close © SAP 2009 / Page 84
  • 85. Questions Questions How to contact us Scott Rosenfelder Philip Mugglestone Jennifer Maddox srosenfelder@deloitte.com philip.mugglestone@sap.com Jennifer.maddox@sap.com © SAP 2009 / Page 85
  • 86. Thank you! © SAP 2009 / Page 86