XBRL - 6 June 2011


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XBRL - 6 June 2011

  1. 1. The A,B,Cs of XBRL
  2. 2. XBRL Services: Overview <ul><li>What is XBRL? </li></ul><ul><li>SEC’s Rules </li></ul><ul><li>Best Practices </li></ul><ul><li>Process </li></ul><ul><li>Deliverables </li></ul>
  3. 3. What is XBRL? <ul><li>eXtensible Business Reporting Language (Interactive Data) </li></ul><ul><li>Each line item is given data tag standardized by US GAAP/IFRS and different industries </li></ul><ul><li>What does it do? </li></ul><ul><li>Creates machine-processable disclosures for more effective communication, easy re-use and analysis </li></ul><ul><li>Allows for disintermediation of data aggregators </li></ul>
  4. 4. Key Terms to Know <ul><li>Tag </li></ul><ul><li>Machine-readable “barcode” that gives a standardized definition for each disclosure item in an income statement, SCF, or balance sheet, notes or MD&A </li></ul><ul><ul><li>Concept </li></ul></ul><ul><ul><li>Precision </li></ul></ul><ul><ul><li>Period </li></ul></ul><ul><ul><li>Currency </li></ul></ul><ul><li>Taxonomy </li></ul><ul><li>A “dictionary” of concepts for: </li></ul><ul><ul><li>Specific accounting standards (US GAAP, IFRS) </li></ul></ul><ul><ul><li>Industry segments (e.g., Oil & Gas, BASI, Commercial & Industrial, Broker Dealer) </li></ul></ul><ul><ul><li>Company-specific disclosures </li></ul></ul>
  5. 5. Key Terms to Know: What is a Concept?
  6. 6. Key Terms to Know <ul><li>Instance document </li></ul><ul><li>XBRL structured document of company disclosures that is the building block to viewing and analyzing data </li></ul>
  7. 7. Foreign Companies <ul><li>US GAAP Filer </li></ul><ul><ul><li>Follows standard phase in schedule </li></ul></ul><ul><li>IFRS Filer </li></ul><ul><ul><li>1st report after June 15, 2011 </li></ul></ul><ul><ul><li>20-F / 40-F filer, only annual report, not quarterly </li></ul></ul>
  8. 8. What do you need to File? <ul><li>In connection with registration statements where historical financial statements are incorporated by reference, issuers often file under cover of Form 8-K or 6-K their revised audited annual financial statements when their previously filed annual financial statements are required to be revised, pursuant to applicable accounting standards, to reflect the effects of certain subsequent events, including a discontinued operation, a change in reportable segments, or a change in accounting principle . Also, foreign private issuers occasionally may file current interim financial statements pursuant to the nine-month updating requirement of Item 8.A.5 of Form 20-F under cover of Form 6-K which are incorporated by reference into a registration statement. In these circumstances, the interactive data exhibit will be required to be included in the Form 8-K or 6-K to accompany the traditional format financial statements to which they relate. Interactive data exhibits related to financial statements that have been restated to correct an accounting error will be required to be included in any amended registration statement or periodic report or transition report that contains the restated traditional format financial statements. The requirement to submit restated financial statements in interactive data format in such an instance would depend on whether the original filing contained financial statements for fiscal periods regarding which the filer was subject to the interactive data requirements. For instance, for those filers in the first phase-in period, the financial statements being restated would only have to be submitted in interactive data format if they were originally for fiscal periods ending on or after June 15, 2009. </li></ul>
  9. 9. Detailed Tagging (Level I) <ul><li>One footnote = one block of text = one tag </li></ul>
  10. 10. Detailed Tagging (Level II)
  11. 11. Detailed Tagging (Level III)
  12. 12. Detailed Tagging (Level IV)
  13. 13. Best Practices <ul><li>Prepare Primary Financial Statement and Block Tagged Notes XBRL documents at least one to two quarters ahead of your mandated timeframe even if they are not formally filed with the SEC </li></ul><ul><ul><li>#1 – On-boarding: establish Initial Template via Tag Approval for a filed 10-Q </li></ul></ul><ul><ul><li>#2 – Dry Run test to time with Concurrent EDGAR filing </li></ul></ul><ul><li>For Detailed Footnote tagging, examine the structure and presentation of your companies financial disclosure and get an estimate of the number of concepts that will need to be tagged in both your 10-K and 10-Q documents. </li></ul><ul><li>Focus on XBRL data creation and not too much on rendering issues on public sites including the SEC. According to the SEC there is no rendering requirement in the mandate. </li></ul>
  14. 14. Best Practices (continued) <ul><li>Extensions - where to extend or not extend? </li></ul><ul><ul><li>SEC Staff Feedback published in May’09 </li></ul></ul><ul><ul><ul><li>When choosing between two US-GAAP Standard Tags (narrow vs. broad), narrow is preferred </li></ul></ul></ul><ul><ul><ul><li>When choosing between an existing Standard and Custom/Extension Tag, every effort should be made to utilize existing US GAAP tag found in taxonomy </li></ul></ul></ul><ul><ul><ul><li>Tags may cross industry classifications </li></ul></ul></ul>
  15. 15. Who Should be Involved? <ul><li>External reporting – education and build in more time for review! </li></ul><ul><li>Special project team </li></ul><ul><li>Legal Counsel - Internal or External – do they review notes? </li></ul><ul><li>Audit committee - may need to alter meeting dates down the road? </li></ul><ul><li>Internal/external auditors - get them involved earlier if needed </li></ul><ul><li>Investor relations – posting of XBRL on web site </li></ul><ul><li>Information Technology </li></ul><ul><li>Consultants </li></ul><ul><li>Vintage Filings / PR Newswire </li></ul>
  16. 16. Process Overview: Set-Up <ul><li>1-4 week process </li></ul><ul><li>As filed data is processed </li></ul>
  17. 17. Process Overview: Set-Up Files are processed <ul><ul><li>Year 1 </li></ul></ul><ul><ul><ul><li>3-7 days </li></ul></ul></ul><ul><ul><li>Years 2 </li></ul></ul><ul><ul><ul><li>1-3 weeks </li></ul></ul></ul>Client Reviews <ul><ul><li>Year 1 </li></ul></ul><ul><ul><ul><li>20-40 hours </li></ul></ul></ul><ul><ul><li>Years 2 </li></ul></ul><ul><ul><ul><li>2-3 weeks </li></ul></ul></ul>Conference calls Edits <ul><ul><li>Year 1 </li></ul></ul><ul><ul><ul><li>24-36 hours </li></ul></ul></ul><ul><ul><li>Years 2 </li></ul></ul><ul><ul><ul><li>2-7 days </li></ul></ul></ul>
  18. 18. Process Overview: Pro Forma <ul><li>24-96 hour turn </li></ul><ul><li>Document structure checked </li></ul><ul><li>No numbers needed </li></ul><ul><li>1-4 week process </li></ul><ul><li>As filed data is processed </li></ul><ul><li>Document is checked for new / changed / removed items </li></ul><ul><li>Document is updated for changes in US GAAP taxonomy - new / changed / depreciated concepts </li></ul><ul><li>Filing is checked against latest EDGAR filer manual rules </li></ul>
  19. 19. Process Overview: Filing Time <ul><li>Final EDGAR needed 24-96 hours prior to filing </li></ul><ul><li>1-4 week process </li></ul><ul><li>As filed data is processed </li></ul><ul><li>24-96 hour turn </li></ul><ul><li>Document structure checked </li></ul><ul><li>No numbers needed </li></ul>
  20. 20. In-House versus Out Source
  21. 21. XBRL <ul><li>Time Savings </li></ul><ul><ul><li>Company Specific XBRL Template is created and saved for future </li></ul></ul><ul><ul><li>XBRL Proofs available in 3-7 days. Ongoing Edits – 24-36 hours (8 hour average turnaround) </li></ul></ul><ul><ul><li>Taxonomy experts complete the initial tagging, saving 80-100 hours </li></ul></ul><ul><ul><li>XBRL specialists transfer knowledge to ensure understanding of the taxonomies, mapping process and SEC requirements </li></ul></ul><ul><ul><li>No need to purchase, install and learn software </li></ul></ul><ul><li>Cost Effective & Easy Review Process </li></ul><ul><ul><li>Repeatable Process derived from rules based engine (reuse of company XBRL template) </li></ul></ul><ul><ul><li>No hiring of additional staff to create XBRL in-house, no worries of retraining staff or absenteeism during critical periods </li></ul></ul><ul><ul><li>Full-service solution </li></ul></ul><ul><ul><li>Ease of Use/Easy Step process: review and approve, then file </li></ul></ul><ul><ul><li>Reviewer’s Guide for easy review </li></ul></ul>
  22. 22. XBRL (Continued) <ul><li>Experience & Expertise of EDGAR Online </li></ul><ul><ul><li>Top creator of all SEC mandated XBRL filings (17% market share since XBRL inception), no 10-Q/A’s filed </li></ul></ul><ul><ul><li>Deep knowledge of the rules governing taxonomies and extension process </li></ul></ul><ul><ul><li>EOL was the lead developer of the 2008 taxonomy </li></ul></ul><ul><ul><li>CPA-trained taxonomy experts with 2+ years of tagging experience with XBRL voluntary filers </li></ul></ul><ul><ul><li>SAS 70 Type 1 certified (security and controls) </li></ul></ul><ul><ul><li>EOL has created/converted over 1,000 SEC filing documents in XBRL format (includes tests or dry-run XBRL documents not filed with SEC) </li></ul></ul><ul><ul><li>High level of QC and Multiple Validation Checks </li></ul></ul>
  23. 23. Validation <ul><ul><li>check the quality of your EDGAR document </li></ul></ul><ul><ul><li>guarantee compliance with the latest XBRL standard and the SEC filer manual </li></ul></ul><ul><ul><li>ensure the consistency of tagging period-to-period and filing-to-filing </li></ul></ul><ul><ul><li>help you make decisions on your extensions versus your peers </li></ul></ul><ul><ul><li>synchronize your XBRL rendering with your EDGAR Document and the SEC viewer </li></ul></ul><ul><ul><li>capture all your comments and changes  and create an audit trail of your decisions </li></ul></ul><ul><ul><li>verify the calculations in your statements- if we find errors, we let you know </li></ul></ul><ul><ul><li>cross-check to ensure the categories and sub-categories foot properly </li></ul></ul><ul><ul><li>make sure the same tags are used to represent the same concepts across balance sheet, income statement, cash flow statement and shareholder’s equity </li></ul></ul>
  24. 24. Deliverables <ul><li>Reviewer’s Guide </li></ul><ul><ul><li>Online – shows tags, definitions, comments </li></ul></ul><ul><li>HTML Rendering </li></ul><ul><ul><li>Shows what the filing will look like at the SEC </li></ul></ul><ul><ul><li>Although not required by the SEC, important for the client to see </li></ul></ul><ul><li>Filing package – zip file </li></ul><ul><ul><li>Allows the client to validate using their own software or services </li></ul></ul>
  25. 25. Online Reviewer’s Guide As Filed or Pre Released Information Comments Concept Definition to each XBRL concept