Snapshot of IFRS Taxonomy


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Snapshot of IFRS Taxonomy

  1. 1. March 2011International Financial Reporting Standards (IFRSs®)Snapshot: the IFRS® TaxonomyThis snapshot is a briefintroduction to XBRL(eXtensible BusinessReporting Language)and the XBRLrepresentation of theIFRSs, known as the IFRSTaxonomy.The snapshot has been prepared by staff and is notan official technical document of the IASB or IFRSFoundation.
  2. 2. The IFRS XBRL initiativeThe goal of the IFRS Foundation and its In the current economic climate where XBRL works in such a way that it allows XBRL can also easily handle languageindependent standard-setting body, the transparency in financial reporting is financial information to be automatically differences and therefore ease the burdenInternational Accounting Standards Board regarded as vital, the regulatory and accessed, extracted and processed by associated with information translation.(IASB), is to provide the world’s integrating investment community are requiring more, computers. The need to manually re-key It is estimated that the use of XBRL couldcapital markets with a common language increasingly complex business information to information to adapt it to specific needs is reduce the time spent analysing a singlefor financial reporting. be reported with greater accuracy and speed. removed. financial statement by 15 - 30 per cent, andXBRL (eXtensible Business Reporting This demand places additional pressure on Issuers are able to compile financial reports this is without considering the improvedLanguage) was developed to provide a those who prepare, compile and analyse this more speedily and with less chance of error. accuracy of the data.common, electronic format for business and information. However, the majority of this This in turn gives users access to more timely The IFRS Foundation recognised thefinancial reporting. Because both IFRSs and work continues to involve manual and accurate data, thereby enabling them to potential impact that XBRL could have onXBRL are intended to standardise financial processing and is therefore prone to time make better, more informed decisions and to financial reporting. The Foundation alsoreporting in order to promote transparency delay and (human) error, and is cost- produce more accurate reports in less time. realised that if XBRL were applied inand to improve the quality and intensive. Because XBRL is adaptable and is not conjunction with IFRSs, it could improvecomparability of business information, the XBRL could potentially solve - or at least restricted to particular formats or tools, XBRL access for users to financial information andtwo form a perfect partnership. mitigate - these problems. information can be transmitted to users in a could also support IFRS adoption and variety of ways. Furthermore, the implementation. information contained within an XBRL report The IFRS Foundation therefore launched the allows for increased comparability and IFRS XBRL initiative in 2001 and the IFRS therefore improved analysis. Foundation XBRL Team was created.2 | Snapshot: IFRS® Taxonomy
  3. 3. The IFRS Foundation XBRL TeamThe mission of the IFRS Foundation XBRL The IFRS Foundation XBRL Team maintains appointsTeam is to: create and provide a framework an ongoing dialogue with the IASB through Trustees of the IFRS Foundationfor the consistent adoption and the XBRL Board Advisory Group, which isimplementation of IFRSs with a high-quality composed of six IASB members, the oversee, review effectiveness, XBRL Advisory informsIFRS Foundation-developed IFRS Taxonomy Director of Technical Activities and the appoint and finance Councilthat is consistent with IFRSs. This mission is Chief Operating Officer. The team consults (strategic) consults consultspart of the adoption and implementation the Board Advisory on a broad range of IFRS Foundation IASBstrategy of the IFRS Foundation and is strategic issues relating to the XBRL Team advises advisesintegrated with the development of IFRSs. implementation of IFRSs with XBRL. XBRL Quality Review Team (technical) creates createsThe IFRS Foundation XBRL Team is supported The team also consults with IASB technicalby two external committees: the XBRL staff and provides input on the structureAdvisory Council (XAC) and the XBRL Quality and modelling of IFRS disclosure IFRSs in XBRL (IFRS Taxonomy) IFRSReview Team (XQRT). requirements. reviewsThe XAC provides strategic advice on the IFRS In the future, it is likely that XBRL will Illustration: XBRL governance at the IFRS Foundation.Foundation’s XBRL activities, while the XQRT come to play an increasingly significantreviews developed taxonomies in order to role in the IASBs standard-setting process.achieve the highest level of quality byproviding input and offering practicalrecommendations on the usability of theIFRS Taxonomy from the perspectives of bothXBRL technology and financial reporting Snapshot: IFRS® Taxonomy | 3
  4. 4. The IFRS Foundation’s XBRL activitiesTaxonomy development Support materials • The IFRS Taxonomy Guide, a technical guide for users of the IFRS Taxonomy.The IFRS Foundation develops a licence-free The IFRS Foundation produces a number of By providing the IFRS • The IFRS Taxonomy Modules Manager, antaxonomy known as the IFRS Taxonomy, support materials to facilitate the use and online tool that guides users though the Taxonomy, the IFRSthat is consistent with IFRSs issued by the understanding of the IFRS Taxonomy,IASB. It is developed in accordance with a including: process of navigating and customising the Foundation seeks to IFRS modules that make-up the IFRSthorough, open, participatory and • XBRL illustrative examples, which Taxonomy. address the demandtransparent due process. illustrate the use of the IFRS Taxonomy in for an electronicBy providing the IFRS Taxonomy, the IFRS financial statements, in accordance with Translations standard to transmitFoundation seeks to address the demand for the XBRL architecture outlined in The IFRSan electronic standard to transmit IFRS Taxonomy Guide. Translations of the IFRS Taxonomy are IFRS financial provided into key languages, in order tofinancial information. • xIFRS (IFRSs with XBRL), an online tool support users of IFRSs and the IFRS information that supports viewing and understandingGlobal outreach Taxonomy whose primary language is not of the IFRS Taxonomy. xIFRS presents a English.The IFRS Foundation makes a concerted view of the electronic IFRSs with To date, the IFRS Taxonomy has beeneffort to promote the use of XBRL in embedded XBRL.* translated into more than 10 languages,conjunction with IFRSs around the world. • The IFRS Taxonomy Illustrated, a document including Arabic, Chinese, Dutch, French,The IFRS Foundation also encourages that presents the structure of the IFRS German, Italian, Japanese, Korean andco-operation and communication with Taxonomy in a simplified, visual format Spanish.stakeholders of the IFRS Taxonomy. that does not require knowledge of XBRL.* eIFRS (the electronic IFRSs) is the IFRS Foundation’s online subscription service that contains the electronic consolidated editions of the IFRSs and accompanying documents. It can be accessed from the IFRS website at | Snapshot: IFRS® Taxonomy
  5. 5. What is XBRL?XBRL is a data-rich dialect of XML (Extensible A typical business report on an Internet page A business report that has been preparedMarkup Language), the universally preferred is a closed and self-contained document. using XBRL is known as an instance document,language for transmitting information via Although it can be viewed and transmitted and it is different to a standard business XBRL was developedthe Internet. using the Internet, its format and content is report. The information contained in the specifically to fixed; neither the format nor the content can instance document is not closed and doesIt was developed specifically to communicate be changed unless you change the Internet not have a predefined, fixed format. The data communicateinformation between businesses and otherusers of financial information, such as page. can be used interactively because it can be information betweenanalysts, investors and regulators. As a result, to extract the information from accessed, extracted and processed businesses and other automatically by computers. ThisXBRL provides a common, electronic format such a report for computerised analysis interactiveness is made possible by the use of users of financial requires exporting or re-keying the data intofor business reporting. It does not change a format that can be handled by computer tags. information, such aswhat is being reported. It only changes howit is reported. software. analysts, investors and regulators Snapshot: IFRS® Taxonomy | 5
  6. 6. About XBRL tagsIn XBRL, information is not Because XBRL tags are formed in a The right-hand side excerpt displays the Users would only encounter an XBRL report universally-accepted way, they can be read same information from the same statement. as it appears in the left-hand side excerpt (ietreated as a static block of and processed by any computer that has However, the formatting has been removed the human-readable version). This is becausetext or set of numbers. XBRL software. to reveal the computer-readable XBRL tags XBRL tags are read and processed by concealed beneath the human-readable computers, behind the computer screen.Instead, information is broken down into To demonstrate how XBRL tags work, an report. Rendering software is then used to convertunique items of data (eg total liabilities = 100). example excerpt from a typical company’s the XBRL tags in an instance document toThese data items are then assigned mark-up statement of financial position that has been An example of a statement line item and the present the information in a human-readabletags that make them computer-readable. For filed using IFRS and XBRL is displayed corresponding XBRL tag has been format, such as a statement of financialexample, the tag <Liabilities>100</Liabilities> opposite. highlighted. position or a cash flow statement.enables a computer to understand that the On the left-hand side excerpt, the company’sitem is liabilities, and it has a value of 100. current assets are listed as six line items of <ifrs:CurrentAssets contextRef="AsOf2009"Computers can treat information that has text as they would appear in a statement, Assets unitRef="EUR">671629000</ifrs:CurrentAssets>been tagged using XBRL ‘intelligently’; they starting with Assets, Current assets, Cash, etc, Current assets <ifrs:Cash contextRef="AsOf2009"can recognise, process, store, exchange and and ending with Total current assets. Cash 28,700 unitRef="EUR">28700000</ifrs:Cash>analyse it automatically using software. Trade and other current <ifrs:TradeAndOtherCurrentReceivables receivables 585,548 contextRef="AsOf2009" unitRef="EUR">585548000</ifrs:Tr Inventories 57,381 adeAndOtherCurrentReceivables> <ifrs:Inventories contextRef="AsOf2009" Total current assets 671,629 unitRef="EUR">57381000</ifrs:Inventories> Left-hand side: example excerpt from a typical Right-hand side: the same example excerpt, but now (human-readable) statement of financial position. displaying the computer-readable XBRL tags.6 | Snapshot: IFRS® Taxonomy
  7. 7. About XBRL taxonomiesXBRL tags are defined and As a result, taxonomies enable computers Taxonomies differ according to reporting with XBRL software to: purposes, the type of information beingorganised using reported and reporting presentation For a company • understand what the tag is (eg whether itcategorisation schemes is a monetary item, a percentage or text); requirements. Consequently, a company reporting in IFRS, the may use one taxonomy when reporting to acalled taxonomies. • what characteristics the tag has (eg if it stock exchange, but use a different IFRS FoundationTaxonomies are the computer-readable has a negative value); taxonomy when reporting to a securities publishes tags for all‘dictionaries’ of XBRL. Taxonomies provide • its relationship to other items (eg if it is regulator. IFRS disclosures.definitions for XBRL tags, they provideinformation about the tags, and they part of a calculation). Taxonomies are available for most of the These tags are major national accounting standards aroundorganise the tags so that they have a This additional information is called the world. For a company reporting in IFRS, organised andmeaningful structure. meta-data. When information that has been tagged with XBRL is transmitted, the the IFRS Foundation publishes tags for all contained within the meta-data contained within the tags is also IFRS disclosures. These tags are organised IFRS Taxonomy. transmitted. and contained within the IFRS Taxonomy. Snapshot: IFRS® Taxonomy | 7
  8. 8. The IFRS TaxonomyThe IFRS Taxonomy is the XBRL The two are then combined and the result is a By publishing interim releases, the IFRS This ensures transparency and compliancerepresentation of the IFRSs, including set of XBRL computer files which make up the Foundation aims to support the early with best practice, and also provides qualityInternational Accounting Standards (IASs), IFRS Taxonomy. adoption of IFRSs by providing taxonomy assurance and opportunities to engage withInterpretations, and the IFRS for Small and items for new IFRSs once they are published stakeholders in order to understand their This year, the financial reporting contentMedium-sized Entities (SMEs), issued by the by the IASB, which eliminates the need for concerns and the impact that the IFRS scope of the IFRS Taxonomy has beenIASB. early-adopting entities to create their own Foundation’s decisions will have. expanded to include IFRS application and taxonomy items.The IFRS Taxonomy is an open core taxonomy, implementation guidance and illustrativewhich means that it has been developed to examples that are commonly used by entities. The IFRS Taxonomy is developed through aallow companies to tailor it to their specific This is intended to reflect IFRSs more formal system of due process and broadneeds by adding their own tags. Company- comprehensively, thereby supporting international consultation.specific tags that are added to a taxonomy are preparers of IFRS financial statements in XBRL End of annual taxonomyknown as taxonomy extensions. format. development cycleLike the IFRS Bound Volume*, the IFRS In addition to the core taxonomy the IFRS XBRLTaxonomy is released once a year to Foundation, beginning in 2010, has also Quality Further Exposure IFRS New / IFRS Taxonomy Final IFRS Taxonomyincorporate new IFRSs, improvements to started to publish IFRS Taxonomy extensions development* Review taxonomy Draft IFRS Bound Taxonomy improved Interim Team development Taxonomy Volume IFRSsexisting IFRSs, and also changes in XBRL following the publication of new IFRSs by the releases reviewtechnology. IASB. These extensions are known as IFRS Taxonomy interim releases. They containThe annual development cycle of the IFRS additional taxonomy items that reflect new or NOVEMBER DECEMBER JANUARY FEBRUARY MARCH APRIL MAY to OCTOBERTaxonomy involves the construction of an improved IFRSs which are not included in—XBRL technology framework (known as an *including consolidation of IFRS Taxonomy interim releases and are therefore supplementary to—the corearchitecture) and the implementation of IFRS Taxonomy. Illustration: the annual development cycle of the IFRS Taxonomy.up-to-date IFRS disclosure and presentationrequirements (ie financial reporting content).* The IFRS Bound Volume is the printed consolidated text of the IASBs authoritative pronouncements and the accompanying documents—illustrative examples, implementation guidance, bases for conclusions anddissenting opinions—as issued by the IASB at the beginning of a calendar year. The IFRS Bound Volume is available from the IFRS e-shop at | Snapshot: IFRS® Taxonomy
  9. 9. Due process guiding considerationsBusiness considerations Functional considerations Usability Technical considerationsConsistency with IFRSs Stability The IFRS Taxonomy is usable throughout the Compliance financial reporting supply chain in allThe IFRS Taxonomy reflects and is consistent The IFRS Taxonomy is intended for use scenarios and geographic regions where IFRSs The IFRS Taxonomy is compliant with allwith IFRSs at all times. Common-practice or throughout the financial reporting supply are implemented, thereby improving market specifications recommended by XBRLindustry-specific disclosures which are not chain. Consequently, the XBRL architecture transparency, supporting better analysis and International.included in IFRSs are not included in the and financial reporting content of the IFRS reducing the reporting burden. New technologies and best practicesIFRS Taxonomy. Taxonomy are developed to ensure that the taxonomy is stable and sustainable, although Interoperability The IFRS Foundation considers the impact ofTime line alignment with IFRSs requires necessary The IFRS Taxonomy ensures that new XBRL technologies (specifications) andThe development time line of the IFRS amendments to the taxonomy from a interoperability between different software best practices developed by XBRLTaxonomy is aligned with the IASB delivery financial reporting perspective. systems is possible. International.timetable as closely as possible (ie with the Extensibilitypublication of the IFRS Bound Volume). Users of the IFRS Taxonomy are permitted toAvailability extend it for their specific needs.The IFRS Taxonomy and all related files andmaterials are freely available. Snapshot: IFRS® Taxonomy | 9
  10. 10. Applying XBRL to financial statementsStep 1: choose a taxonomy Again, there are some cases when a company may not create an extension. For example, the company is filing with an agency and the agency has prohibited the use of extensions. In theseIn order to create an instance document, a company must first identify a taxonomy to use. In cases, the company must identify an element from the taxonomy provided.some cases, a company may not have the choice of the taxonomy it uses. For example, thecompany is filing with an agency and the agency has prescribed a specific taxonomy that Step 4: create tags and an instance documentmust be used. If a taxonomy is not prescribed then a company must decide whether to use a Once all line items and their equivalent elements have been identified (and/or created),published taxonomy, or to create its own taxonomy, or do a combination of the two and use a numeric facts (monetary, decimal or share values) or text facts from the statement are taggedpublished taxonomy but add items that are specific to its own reporting needs. using XBRL software. These tags associate the facts with the taxonomy (and extension)Step 2: compare information elements, and are used to generate an instance document. The instance document should then be reviewed and checked (validated).Once the taxonomy is chosen, a company must compare the line items in their chart ofaccounts or financial statements with the elements contained in the chosen taxonomy. Thecompany must then identify the taxonomy elements that are equivalent to these line items. IFRS Taxonomy 2010For example, the statement may report the companys liabilities, and if the taxonomy [210000] Statement of financial position, current / non-current - Consolidated financial statementscontains the element liabilities, then this element can be used by the company. This process is Statement of financial positionknown as mapping and can be done manually using a spreadsheet or using an XBRL viewing Assetstool. Non-current assets Property, plant and equipment IAS 1.54, IAS 16.73Example excerpts from a typical companys statement of financial position and the IFRS Investment property IAS 1.54, IAS 40.76, IAS 40.79Taxonomy are displayed on the right-hand side (a statement line item and the corresponding Goodwill IAS 1.54, IAS 36.134,IFRS Taxonomy element have been highlighted). IAS 36.135, IFRS 3.B67 Intangible assets other than goodwill IAS 1.54, IAS 36.134, IAS 36.135, IAS 38.118Step 3: create extensions Investments accounted for using equity method IAS 1.54, IFRS 8.24, IFRS 8.28If the companys financial statements contain line items that do not have equivalenttaxonomy elements, then a company must create its own element, known as a taxonomy Right-hand side: example excerpt from the IFRS Left-hand side: example excerpt from a typicalextension. Taxonomy viewed using an XBRL tool. statement of financial position.10 | Snapshot: IFRS® Taxonomy
  11. 11. The origins of XBRLXBRL is highly adaptable (extensible). Because XBRL was originally developed in 1998 by a There are currently almost thirty XBRL The growing number of XBRL jurisdictionsit is an open standard without licence fees, Certified Public Accountant to improve the jurisdictions around the world. Each reflects the growing emergence of theXBRL is software and hardware independent. exchange, publication and analysis of jurisdiction is responsible for creating standard around the world.As a result, data that has been tagged in XBRL business information, including financial taxonomies - generally for the main localcan be transmitted in a variety of formats and data. accounting standards - and for promoting andusing a variety of tools. XBRL’s adaptable facilitating the implementation of XBRL in Today, the ongoing development of XBRL isnature also means that it can be applied to that region. coordinated by XBRL International, a not-for-different languages. profit consortium of approximately 550Although XBRL’s most recognised and companies, organisations and governmentcommon function is financial reporting, agencies around the world, including theXBRL tags can be created and adapted to IFRS Foundation.virtually all reporting needs and to supportall standard tasks involving both financialand non-financial business data. XBRL was originally developed by a Certified Public Accountant to improve the exchange, publication and analysis of business information Illustration: XBRL jurisdictions around the world (source: XBRL International) Snapshot: IFRS® Taxonomy | 11
  12. 12. The future of IFRSs and XBRLAdoption of IFRSs around the world is In order to support a growing number of Yet despite a steadily rising number of usersgrowing. Since the formation of the IASB stakeholders and convergence of financial and stakeholders, and despite the success ofand IFRS Foundation in 2001, almost 120 reporting standards, new IFRSs and numerous individual initiatives and The IFRS Taxonomycountries have required or permitted the improvements are being published. XBRL is projects, on a global scale XBRL remains in and all relateduse of IFRSs. All remaining major also evolving with new, robust specifications the early adoption phase. The benefits ofeconomies have established time lines to being developed by international working XBRL adoption and implementation are materials are freelyconverge with, or adopt IFRSs in the near groups, and software solutions being being realised, but gradually. available from thefuture, and few are doing so without also developed to harness these new Consequently, while XBRL is in the early IFRS website at http://considering XBRL and the IFRS Taxonomy. functionalities and to ease implementation. phases of adoption, now is an opportune adoption is also growing of its own Combined with the lack of an alternative time to learn about XBRL and to prepare anaccord, with new jurisdictions and projects standard that is able to offer the same implementation plan.emerging across the world. capabilities and benefits, XBRL is ideally placed to become the de facto standard for business reporting.12 | Snapshot: IFRS® Taxonomy
  13. 13. Frequently asked questions (FAQs)What is XBRL? What is the IFRS Taxonomy?XBRL stands for eXtensible Business Reporting Language. It is a digital ‘language’ that was The IFRS Taxonomy is the XBRL representation of IFRSs issued by the IASB. The IFRS Taxonomydeveloped specifically to communicate information between businesses and other users of contains tags for all IFRS information. In XBRL, mark-up tags are used to make business information computer-readable and consumable. Why did the IFRS Foundation develop a taxonomy for IFRSs? The IFRS Taxonomy was developed to address the demand for an electronic standard toDoes using XBRL change the information that is reported? transmit IFRS financial information.No. XBRL provides a common, electronic format for business reporting. It does not changewhat is reported. It only changes how it is reported. What is the relationship between IFRSs and XBRL? The goal of the IFRS Foundation is to provide the world’s integrating capital markets with aDoes XBRL change financial reporting standards? common language for financial reporting. XBRL was developed to provide a common formatNo. Financial reporting standards can be translated into XBRL but their meaning and for business and financial reporting. Both IFRSs and XBRL are intended to standardise financialdisclosures remain unchanged. reporting, in order to promote transparency and to improve the quality and comparability of business information.Is XBRL restricted to financial reporting?No. Although XBRL’s most recognised and common function is financial reporting, XBRL tagscan be created and adapted to virtually all business reporting needs. Useful links IFRS Foundation: XBRL International: www.xbrl.orgWhat is a taxonomy?A taxonomy is a computer-readable dictionary that defines and organises XBRL tags to give thetags order and meaning. Snapshot: IFRS® Taxonomy | 13
  14. 14. Notes14 | Snapshot: IFRS® Taxonomy
  15. 15. Notes Snapshot: IFRS® Taxonomy | 15
  16. 16. IFRS Foundation30 Cannon Street | London EC4M 6XH | United KingdomTelephone: +44 (0)20 7246 6410 | Fax: +44 (0)20 7246 6411Email: | Web: further information about the IFRS XBRL initiative, please contact the IFRSFoundation XBRL Team on telephone: +44 (0)20 7246 6410 or email: 100%Printed on 100 per cent recycled paper