Best structure of taxonomies for the different purposes of analysis
Academic Research Track:04Best structure of taxonomies forthe different purposes of analysisNomura Research Institute, Ltd.Data Analyst Chie Mitsui
Contents for today’s session• Discussion on taxonomy design• Difficulties for discuss best taxonomy• Taxonomy design of next generation EDINET• Each investor / Analyst has different usage of data• Real case, Different requirement to use SGAExpense data• How we can get necessary information from XBRL?• ConclusionAbout Nomura Research Institute；A research institute, which is a member of the group companies in financialsectors. Nomura securities used to be a parent company before we went topublic on Tokyo Stock Exchange. Our department provides information andsolution for mainly asset management companies, trust banks, and advisoryservice companies, etc.1
21. Discussion on taxonomy design• Discussion on taxonomy design is getting moreactive these days.• Type of issues; usability for handling data,connectivity with other applications, etc.• Required knowledge; business rule, operations,analysis, interface with transfer information, etc.
Many different types of data to understandcompany business and situation2. Difficulties for discuss best taxonomyBecause there are many types of users.There is no one taxonomy which is able to transmit all required information .3We should focus oninvestors‟ usage thatwill benefit issuers.Example;Normalizing DiversityData modelPresentation ofthe reportMonitoringRegulatorAnalystInvestorScreen companies to pick up suspiciousdisclosures with specific criteria or policyPreferred type of dataSame formatted dataData for only regulatorinvestigationExtension of each companies isan important information
4EDINET is scheduled to beupgraded in fiscal 2013Expand XBRL coverage to non-financial information in the securities reports or any othertypes of reports.3. What to expect from next generation EDINET
• Next generation EDINET introduceso Dimensiono Inline XBRLo Textblock tag• New taxonomy structure for the whole reporto Form tree => For table of contents of the reports, elements for title of each sectionare set on the presentation linko N/A tag => When company doesn‟t have any facts to disclose on particular section,it can set this tag there54. Taxonomy design of next generation EDINET関連付けContents ＡText blockContents ＡPricedataText blockDetail treeForm tree contents of tableSame nameContents Ｂ関連付けText block
5. Each investor / Analyst has different usage of data6Type of data usage Requirement(1) Making their own estimation ofcompany performance to havetheir own scenarioTaxonomy structure should providenature of concept or ideal data structure(2) Making sure whether there areany suspicious disclosures ornotWould like to use taxonomy for checkingdata consistency=> designed to emphasize the relationbetween each line-item and total item(3) Would like to collect informationthat it is difficult to find normally.Would like to find where toinvest by different angle usingoriginal disclosure information.=> Users need as many tags as possibleso that each analyst can create his/herown model to find out issues such asdifferentiator from his/her peers or goodpoints, etc. Most important thing is thatdata is original
76. Type1 – Nature of concept or ideal structureFor users who make their own estimation of company performance to comeup with their own scenario, taxonomy should support them to re-calculatedata using original elements.I want to know the „link‟ between elements of each figureof depreciation and applied method, other conditions byfootnoteInter-segment elimination is not disclosed enough. I haveto know the detail data against each segment. => It means,I need multiple values by members on the same axis.
6. Type 2 – Relation each element with primary FSFor users who want to take data automatically toremove any arbitrariness, for comparingcompanies.• Need sum-element on the primary FS as a standard taxonomy(as well known item) for all extension elements as parent so thatuser is able to find their meaning automatically•For handling data automaticallyo Need to know what is disclosed or not, using tags, such as Nil ( in case ofnumber) or “N/A” tag (for narrative information)oNeed to recognize the improbable combination members of dimension andcontrol them8
In fact, we need several types of taxonomy for the samedata Depends on purpose of analysis?Now we should focus on type 1 and 2.96. Type 3 – Many elements as many as possibleFor users who handle data such as “BIG DATA ANALYSYS”to search without any premises to find out singular pointFor finding out the hidden relation between data, whichseems to be unrelated actually, might not require any link-information between each element on the taxonomy?
7. We should focus on type 1 and 2.Discussion expected on usage of SGA expense and taxonomy10On the financial report, SGA expenses are written on primaryfinancial statements and footnote (disclosure) separatelyHow to use data and issues(When data is scattered with theextension elements )Possible solutionsA Have to collect all elements that belongto SGA expense=>Sample shown on the next slideFor example, set member of dimension “SGA expense”as global dimension or definition link sets all elements aschild under total SGA expense, even if some elementsappear on the footnoteB Want to check total number andspecific figures for calculation ofspecific financial indicators(want to separate causality of thoseexpenses)Want to use calculation-link between those items,however, if footnote disclosure can omit to discloseeverything (only to write important elements), calculation-link doesn‟t workC Want to know which items are inPrimary financial statement and whichitems are on the footnote (lessimportant items are written on thefootnote)Describe all required disclosure forms usingpresentation-link. => Sample of the Next GenerationEDINET “form tree” in the after next slide.Let‟s see how we can find solution? => Go to Slide 16
Sample data of SGA expense11Selling, general and administrative expensesStatement of IncomeFootnote for Statement of IncomeDirectors compensationsSalaries and allowancesProvision for bonusesRetirement benefit expensesWelfare expensesEducation and training expensesRent expenses on real estatesOperations consignment expensesDepreciationThese items belong todifferent ELR, havedifferent parent item
12Sample of “Form Tree” of next generation EDINETFootnote of consolidated statement of income ( jpcrp_001500-000_2013-03-31_pre.xml )Major components of selling, general and administrative expenses [text block]Depreciation-SGAProvision of allowance for doubtful accounts-SGAResearch and development expenses included in general and administrative expenses and manufacturing cost for currentperiod [text block]Research and development expenses included in general and administrative expenses and manufacturing cost for currentperiodResearch and development expenses-SGAStatement of income [abstract]Statement of income [table]Statement of income [line items]Revenue from operating activities [abstract]Net sales [abstract]Net salesSelling, general and administrative expenses [abstract]Sales commission-SGAPacking expenses-SGAHaulage expenses-SGAAdvertising expenses-SGASample expenses-SGAWarehousing expenses-SGA
8. How we can get necessary information from XBRL?13Reviewing basic function of taxonomy• Basic taxonomy has three links, at least..o Presentation, Definition, Calculation• Simply user expects each role of link….o Presentation can explain elements in Primary financial statement or footnoteo Definition might be able to categorize elements as their nature, even if thoseelements are somewhere in the reportso Calculation can provide which elements figures are included for total items→ Definition link can present data relation and meaning of each data usingdimension members. Presentation link can present elements as disclosedunder regulation and corporate policyIf we have at least two different roles of links, it might meet the purpose A andC. Then part of B can be supported by calculation link (because calculationcan not be provided between members of dimensions)
9. Conclusion• Though XBRL has been developed for issuers or regulators, it is agreat attempt to accelerate discussion among investors. However,there are no taxonomy structures to be able to solve everything• Taxonomy should be designed by each usage purpose . But we canprioritize for disclosure purpose• For disclosure purpose, for example, taxonomy structure has to helpimprove validation level and support handle data correctly by user• If the purpose is different, sometimes we might have several differentlayers on the taxonomy for one data14