What is XBRL? MACPA Case Study & Global Update


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What is XBRL? Is it just another compliance burden forced on public companies or a powerful new technology that can change the way financial information is produced and distributed?

The Maryland Association of CPAs recently set out to see for oursleves and this presentation includes our findings. We have seen efficiencies in accessing our financial data, moving it into KPI software, and believe it can be used to populate tax filings, produce on-line financial statements and much more.

We are also joined by Eric E. Cohen, PWC and one of the founders of XBRL for a global XBRL update including the SEC mandate and SBR projects around the world where XBRL is being used to dramatically reduce teh reporting and compliance burden by businesses to governments.

We do think it is a powerful new technology that can reshape the financial reporting supply chain much like barcodes transformed the mfg and distribution supply chains.

This presentation was produced by Skip Falatko, Tom Hood IV (Student Intern), and Eric E Cohen (PWC)

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  • Intros Agenda Show of hands? XBRL?
  • Int’l mandated and voluntary – SEC uses it for analysis and comparability – think of it as Bar coding and, expected to have benefits that we can’t even imagine yet
  • Information can cross computer systems and still retain its tags, and therefore its meaning & context
  • “Framework” for slotting in all elements of financial statements
  • Thomas will talk about how we dealt with the Commercial & industrial taxonomy in our current project – improve accountability, transparency and comparability for non-profits
  • Many of us spend some of our time moving numbers from one paper/spreadsheet to another.. XBRL can change that … more time analyzing and interpreting
  • Using software from Altova - We’re tagging our data – are populating financial reports, KPIs – Altova folks are here – they learned we were using their software and wrote a white-paper which is on the conference website
  • What is XBRL? MACPA Case Study & Global Update

    1. XBRLWhat is it?What‟s happening with it?
    2. The panelists:• Skip Falatko – MACPA• Thomas Hood – MACPA student intern (Salisbury University)• Eric E. Cohen – PricewaterhouseCoopers & founding member of XBRL
    3. XBRL•eXtensible•Business•Reporting•Language
    4. XBRL• Open standard tagging language• In use internationally• SEC requirement in US• “Bar coding” of financial information
    5. XBRL tags provide meaning andcontext such as……• McCormick & Company• Sales Revenue $3,122• US Dollars• US GAAP• Audited• Year ending November 30, 2010
    6. Taxonomies are data dictionaries• Used to organize tagged data• They include the financial statement elements• Are unique to specific industries• Can be extended to fit your organization
    7. Initial XBRL work with Microsoft• Fitting into the commercial and industrial taxonomy was a challenge• Non-profits need their own taxonomy• XBRL would be beneficial to the non-profit community
    8. Why does XBRL matter?• Facilitates the automatic exchange of information• Can be used to populate financial statements, tax returns, or anything that relies on data• Has the potential to change what we do as CPAs
    9. MACPA’s XBRL project• Learn about XBRL• Impacts our members• Leverage the technology internally to improve our speed, processes and capability
    10. Overview• Map Accounting Data to XBRL Global Ledger• Subsidiary closing entry• Extend the GAAP Taxonomy• Use the XBRL GL Accounting Data ▫ GL to GAAP ▫ KPI Analysis – Excel XML import ▫ Financial Scoreboard – batch files/GUI
    11. Mapping• Use SQL to retrieve accounting data ▫ What information do we need?• Use functions to facilitate movement of data• Map – Account info, journal entries, audit rollup groups, KPI‟s
    12. Accounting Data
    13. XBRL GL Data
    14. Excel XML Import
    15. Excel Pivot Table
    16. Subsidiary Closing Entry• Differences due to: ▫ BLI Closing Entry• Use Global Ledger to „reverse‟ the closing entry• No data in the accounting system is affected• Reversing Journal Entry is easily pulled containing full detail in GL
    17. Reversal of Closing Entry•
    18. Reversing Entry in Excel
    19. Extending GAAP• Use GAAP Commercial & Industrial as entry point• Add FASB References• Create a dimension ▫ Dues ▫ Courses
    20. GAAP Extension
    21. Use the Data• XBRL Global Ledger – SRCD Module ▫ Facilitates the link between GL and FR ▫ Key Component of GL• KPI Analysis ▫ Excel Pivot tables• Financial ScoreBoard ▫ Second Mapping ▫ Batch Files/Graphical User Interface
    22. Outlook• Improve mappings - Global Ledger can represent much more than just general ledger – use it to its max potential! ▫ Transaction level ▫ Multiple databases• Database integration ▫ Dynamics ▫ Payroll ▫ AM4 ▫ SalesForce• Audit Schedules/worksheets• Financial Dashboard – Own your Data• Automated 990 form generation
    23. What did Global Ledger Do?• Automated generation of financial statements• Automated KPI analysis of revenue/expense• Automated Financial ScoreBoard package• Drill down from audit rollup to underlying transactions• “Ownership” of data• Think Global Ledger, Think Internal
    24. SEC Mandates• Final ▫ Financial Reports ▫ Mutual Funds ▫ Credit Rating Agencies• Proposed ▫ Extractive Industries ▫ SWAPs  Registration and Regulation of Security- Based Swap Execution Facilities
    25. SEC (Continued)•2011 Taxonomy ▫ FASB responsibility ▫ Incorporation into exposure drafts•Year 3 ▫ 500 -> 1700 -> 10,000 ▫ IFRS  Concerns  Reaction: HOT OFF THE PRESSES!! ▫ End of limited liability for Group 1
    26. SEC (Continued)
    27. SEC (Continued)
    28. Other Mandates• Ongoing mandates in US (FDIC), Belgium, Chile, China, France, Germany, India, Israel, Italy, Japan, Korea, Spain and others• Inline XBRL at HMRC; also Denmark, Ireland, elsewhere ▫ The ___ of HTML and the ___ of XBRL
    29. SBR•SBR movement: ▫ Primary goal:  Reduced compliance burden ▫ But also:  Greater efficiencies, communications, transparency ▫ NL, AU, TW, SP, UK, et al ▫ Moving from option to mandate
    30. Europe•Banking sector ▫ Former CEBS now EBA ▫ Basel II•Insurance sector ▫ European Insurance and Occupational Pensions Authority (EIOPA)
    31. Assurance• SOP 09-1: Agreed upon procedures• Next step: Principles and Criteria ▫ http://www.aicpa.org/InterestArea s/AccountingAndAuditing/Resource s/XBRL/DownloadableDocuments/F INAL-ED-XBRL-Principles-and- Criteria.pdf ▫ Hot off the presses!
    32. Tooling• From outsourced to in-house ▫ Clarity FSR ▫ WebFilings• To open source ▫ www.arelle.org• To embedded ▫ MACPA story
    33. XBRL Global Ledger• The touch point to transactional standards• The Seamless Audit Trail• Outreach ▫ OMG, EDMC ▫ OCEG ▫ HIMSS and Medical Banking Project ▫ US Government space• Research: Momentum Accounting (K. Wright)
    34. Technical•Formal modelling•Many updates and refinements•Data types and Units of measure
    35. Events•XBRL US, Nashville in Septemberhttps://events.capsllc.net/xbrl2011/welcome•XBRL International XII ▫ Brussels (just concluded) ▫ Montreal in October ▫ Abu Dhabi in the Spring.
    36. Questions?For more information:skip@macpa.orgjh55424@gulls.salisbury.edueric.e.cohen@us.pwc.comAltova - MACPA XBRL Case Studyhttp://www.altova.com/documents/MACPA_Low.pdfXBRL Resources:http://www.xbrl.comhttp://www.cpasuccess.com/xbrlhttp://www.xbrlplanet.org/http://xbrlnetwork.ning.com/http://www.altova.com
    37. Skip Falatko, CPA Director of Finance Maryland Association of CPAs Business Learning Institute (443) 632-2301 E-mail skip@macpa.org Twitter: www.twitter.com/skipfalatkoLinked-In: http://www.linkedin.com/pub/skip-falatko/4/14b/332 Web http://www.macpa.org Blog http://www.cpasuccess.com http://www,bizlearningblog.com