XBRL Implementation for Financial Reporting | NCASA
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Presentation on Limitations on current business reporting and XBRL. Presented to an event organized by Nepal Chartered Accountant Students' Association (NCASA) about an XBRL solution proposed by me and my team in 2013 as a part of my Engineering's Final Project. Credits : Team : Aayush Shrestha - aayush@nlocate.com Ashok Basnet - mail@ashokbasnet.com.np Umanga Bista - bistaumanga@gmail.com Sarvagya Pant - sarvagya.pant@gmai.com Supervisors : Dr Aman Shakya - amanshakya@gmail.com Er Sansar Jung Dewan - sansardewan@gmail.com
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XBRL Implementation for Financial Reporting | NCASA
- 1. Aayush Shrestha Computer Engineer Chief of Design @ nLocate Pvt. Ltd. Aayush@nLocate.com XBRL Implementation for Financial Reporting
- 2. • Introduction • Background • Problem Statement and Motivation • Introduction to XBRL • Looking at an XBRL Document • Benefits of adopting XBRL • System developed for assisting adoption • System Overview • Demo of web based XBRL Generator • Demo of Excel based XBRL Generator • Information gained from XBRL documents • What the future looks like Overview 2
- 4. • XBRL Implementation Financial Reporting to Office Of Company Registrar (OCR) • Built a prototype of a system that covered Generation, Storage and Analysis of XBRL documents • Awarded Best Implemented Project Award by Institute of Engineering, Tribhuwan University Background Introduction 4
- 5. • Everything of stacks of paper • Digital but not computable • Lack of a defined common standard • Not readily available • Redundancy and Inconsistency • Valuable Data, Major concern for stakeholders Motivation Introduction 5
- 6. • eXtensible Business Reporting Language • Dialect of XML for business and financial data • Taxonomy & Instance documents • Internationally accepted • IFRS and GAAP XBRL : A Global Standard Introduction 6
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- 11. WHY? 11
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- 13. • Manageable and always available. • Machine Readable and Computable Information • A common standard across the country • No more redundant works. • Prevent Frauds • Valuable Information for stakeholders Benefits Introduction 13
- 14. HOW? 14
- 15. Overall System System Description Instance Creator Repository Financial Statements XBRL Submit Analytics XBRL open data access Companies 15
- 16. Creating XBRL Document of Financial Reports using our instance creators 16
- 17. Web Based Instance Creator 17
- 18. Excel Based XBRL Generator 18 Macro Program on Excel To generate XBRL Creating Financial Documents In Excel as usual Manual mapping of IFRS taxonomy
- 19. What can we do from those XBRL files? 19
- 20. Repository Mgmt for XBRL documents 20 Public Access to public financial documents
- 21. Analysis from XBRL Documents 21 Listing top companies by different parameters
- 22. Analysis from XBRL Documents 22 Analyzing a company’s performance over the years according to some parameter
- 23. Analysis from XBRL Documents 23 Comparison between companies according to some parameter
- 24. Analysis from XBRL Documents 24 Use xQuery to make complex queries according to need
- 25. XBRL Implementation Process in Nepal 25
- 26. • Change policies and culture. • Adapt to new technology. • Impose new laws and requirements. • A couple years at least. What’s Needed? Conclusion 26
- 27. • Lawmakers, Engineers, Chartered Accountants and stakeholders working hand in hand. • Localization of Taxonomy in accordance with NAS • Imposing policies for requirement and maintenance of reports in XBRL format by government • Getting our taxonomy accepted by XBRL International How we get there? Conclusion 27
- 28. THANK YOU !!! 28 Aayush Shrestha aayush@nLocate.com aayushonweb@gmail.com
Editor's Notes
- In my final year of computer engineering, as our Final Major Project, we were working on a project called “XBRL Implementation for Financial Reporting to the Office of Company Registrar” We were four people in the team and we were supervised by Dr Aman Shakya of IOE and Er Sansar Jung Dewan from OCR Successfully built a prototype of a system that covered generation, storage and analysis of XBRL documents Won Best Implemented Project Award in IOE
- This project was initiated and conceptualized by Mr Sansar Jung Dewan of OCR. When we first went to OCR for a field survey, he showed us stacks and stacks of papers that had financial reports. It was a mess. Now there had been some efforts of digitizing the system. They had started receiving reports in PDF, Doc or Excel Formats. This was digital but not computable. The other problem that we saw was lack of a common defined standard. It was hard to find data. Now what we could clearly see was that all this data in front of us was valuable. Specially to stakeholders of companies.
- XBRL stands for eXtensible Business Reporting Language It is a dialect of XML specially designed for business and financial data representation. By a show of hands… how many of you know what XML is? For those who don’t know, XML is used to define syntax of a document. Taxonomy contains definition, concepts and relationships of tags. Instance Documents contain the actual data based on the taxonomy International accepted across over 113 countries all over the world. Two maor standard or principles. IFRS and GAAP IFRS – International Financing Reporting Standard GAAP – Generally Accepted Accounting Principles
- This is what an XBRL Document looks like. I know it looks intimidating. Lets break it down.
- The header part of the document does nothing but defines that this is an XML and an XBRL document and links to the taxonomy that it follows.
- On the second part, we define context for the document like the dates, the currency unit it follows, etc.
- The last section consists of the facts. Facts are the actual data of a financial document. It consists the actual data of the document enclosed by XBRL tags defined by IFRS. These data are now completely readable by a computer and hence a program can read this document and make sense out of it.
- The major reason is to take the system from a chaotic garbage collection to more manageable form where data can be computed, measured and analyzed.
- Instance Creator : Two Types. - Excel Macro - Based on web forms Repository - used to archive xbrl filings - admin panel to manage submissions, analytics engine and open data access
- The web based generator is an easy to use XBRL generator All you need to do is select the entity and enter the value and click on “Generate XBRL Document” button This is limited to only creating Balance Sheet now. Needs more work to make it complete and thorough
- Excel based XBRL Generator is a little complex but can, in theory, generate any kind of XBRL document An auditor would create a financial document in Excel as usual , but in the Excel file (or a copy of it) that we created. This Excel file has a macro program inside of it that can generate the XBRL document from the data An expert or a trained person with knowledge of IFRS Taxonomies would map each data in the financial document to appropriate IFRS taxonomy Tedious to learn but flexible
- We need to adapt a change in culture and policy Be more open to new technology New laws and regulations has to be imposed to ignite the change. It would take at least a couple of years to fully adapt to this new technology.
- People from different disciplines need to work hand in hand to make the adoption as quick and efficient as possible. Efforts from only one side would not suffice. The adoption would occur in 3 Phases First Phase : Localization of IFRS taxonomy in accordance to Nepalese standards. Second phase: Imposing laws and requirements and development of management systems from the government side. Third Phase : Getting our taxonomy accepted by XBRL International