XBRL New approach to financial  reporting and analysisIlya Vadeiko, MBA Candidate in Finance, McGill UniversityVitaly Grit...
Agenda• Brief introduction to XBRL  1. What it is  2. Why and how to use it• Various perspectives on XBRL  1. Corporations...
Introduction to XBRL(high level overview)                        3
XBRL is:• eXtensible Business Reporting Language based on XML for  tagging financial statements• International standard ag...
Why bother learning XBRL? 1. Regulators enforce it across                     2. Like Web 2.0 to static HTML – the globe –...
Basics of XBRL                                                                              6Source: “Cheat Sheet from XBR...
Taxonomy is like a dictionaryExamples of US Taxonomies:•   XBRL US GAAP Taxonomy•   XBRL US Managements Discussion and Ana...
SEC filing: Interactive DataInteractive data     (XBRL)                         1.   XBRL instance (.xml)                 ...
Viewing XBRL in stand-alone app 2. Selected statement: Balance Sheet                                        3. Export to E...
Viewing online: XBRL cloud                             10
Corporates’ perspective on XBRL(creators of financial information)                                      11
Corporate’s perspective on XBRL                                                 Trading        Management                 ...
Enforcing XBRL by SEC in USTier 1Tier 2Tier 3                                                                             ...
Tagging levels explained                                                                                                  ...
Most Challenging Aspects of XBRL                                                                                          ...
Key providers of XBRL solutions     • Large EDGAR filers/Financial printers (e.g. RR Donnelley, Bowne)     • Independent S...
Market evolution   • Most XBRL exhibits are created by registrants’ EDGAR filers   • However, significantly more non-EDGAR...
Auditing and Consulting in XBRL                                  19
Investors’ perspective on XBRL(users of financial information)                                   20
What could XBRL be used for?                               21
Footnotes are very importantHow often do you use numerical data ONLY found in a company’s footnotes?                      ...
Timeliness of the financial data    How quickly after its issuance do you require SEC-mandated financial info?Sum = Atleas...
Broader analyst coverage                                                                                     24Source: “Tr...
Awareness about XBRL (US)                                                                                                 ...
Awareness to XBRL (Global)                                                                                                ...
Use of XBRL (Global)                                                                                                27Sour...
Reasons for not using XBRL yet                                                                                            ...
Universities’ perspective on XBRL   (Research and Education)                                    29
Academic projects (globally)                            XBRL in classroom:                         Kennesaw State Universi...
XBRL at Waterloo                   31
Conclusion: this is the time!                                                                                            3...
Useful Resources• http://xbrl.squarespace.com/ – website of the father of XBRL  (Charles Hoffman) that contains learning m...
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Overview of XBRL by FinDynamics.com

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This presentation gives a brief overview of the current state of XBRL, its benefits and challenges for public corporations, investors, and university researchers working in finance. See more at findynamics.com and try our Excel platform XBRLAnalyst

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Overview of XBRL by FinDynamics.com

  1. 1. XBRL New approach to financial reporting and analysisIlya Vadeiko, MBA Candidate in Finance, McGill UniversityVitaly Gritsenko, M.Sc. in Computer Science, Owner of F-Key Solutions
  2. 2. Agenda• Brief introduction to XBRL 1. What it is 2. Why and how to use it• Various perspectives on XBRL 1. Corporations: advantages and challenges 2. Investors: benefits and risks 3. Universities: education and research 2
  3. 3. Introduction to XBRL(high level overview) 3
  4. 4. XBRL is:• eXtensible Business Reporting Language based on XML for tagging financial statements• International standard agreed upon by regulators, CFOs, CFAs, CPAs• New computer format enabling automated processing and validation of business information• Search-facilitating technology that improves the transparency of financial reporting and analysisDuring his 2007 testimony before the U.S. Senate Committee on Banking, Housing, andUrban Affairs, SEC Chairman Christopher Cox stated, “XBRL would in fact give investors 4better access to the information because they could find it more easily.”Source: “Cox Defends XBRL to Senators,” 31 July 2007 www.cfo.com/article.cfm/9571612?f=msdynamics
  5. 5. Why bother learning XBRL? 1. Regulators enforce it across 2. Like Web 2.0 to static HTML – the globe – compliance Interactive Data Where XBRL saves you time Source: Charles Hoffman, Liv Watson. XBRL for Dummies. Wiley Publishing, 2009, page 51 5Source: http://xbrl.org/knowledge_centre/projects HOW?
  6. 6. Basics of XBRL 6Source: “Cheat Sheet from XBRL for Dummies” www.dummies.com/cheatsheet/xbrl
  7. 7. Taxonomy is like a dictionaryExamples of US Taxonomies:• XBRL US GAAP Taxonomy• XBRL US Managements Discussion and Analysis Taxonomy• XBRL US Standardized Industrial Classification (SIC) TaxonomyExamples of UK Taxonomies: 7• UK GAAP (for Accounts)• UK IFRS (for Accounts)• HMRC Taxonomy (for Corporation Tax Computation)
  8. 8. SEC filing: Interactive DataInteractive data (XBRL) 1. XBRL instance (.xml) 2. Taxonomy (.xsd) 3. Calculations (_cal.xml) 4. Definitions (_def.xml) 8 5. Labels (_lab.xml) 6. Presentation (_pre.xml)
  9. 9. Viewing XBRL in stand-alone app 2. Selected statement: Balance Sheet 3. Export to Excel 1. Statements and notes 9
  10. 10. Viewing online: XBRL cloud 10
  11. 11. Corporates’ perspective on XBRL(creators of financial information) 11
  12. 12. Corporate’s perspective on XBRL Trading Management Companies Auditors Regulators Partners AccountantsDisclose to: Financial Publishers & Investors Central Other Data Aggregators Banks Stakeholders XBRLBusinessManagementSystems:Sources: Legacy ERP CRM SCM… 12Source: “IFRS, XBRL and Business Performance Management (BPM)” by Trevor Walker, for XBRL.org
  13. 13. Enforcing XBRL by SEC in USTier 1Tier 2Tier 3 13Source: “SEC XBRL Mandate for Dummies” by Ed Tittel, IBM Limited Edition, Wiley Publishing Inc. 2011 Today
  14. 14. Tagging levels explained 15Source: “SEC XBRL Mandate for Dummies” by Ed Tittel, IBM Limited Edition, Wiley Publishing Inc. 2011
  15. 15. Most Challenging Aspects of XBRL 16Source: “SEC Reporting and the impact of XBRL: 2012 Survey” by William Sinnett, Financial Executives Research Foundation
  16. 16. Key providers of XBRL solutions • Large EDGAR filers/Financial printers (e.g. RR Donnelley, Bowne) • Independent Software Vendors (Rivet, WebFilings) 17Source: “SEC Reporting and the impact of XBRL: 2012 Survey” by William Sinnett,Financial Executives Research Foundation
  17. 17. Market evolution • Most XBRL exhibits are created by registrants’ EDGAR filers • However, significantly more non-EDGAR filer XBRL service providers and software vendors appear on the market 18Source: “XBRL Summit Presentation” by Natalie Zimmer, Ernst & Yong, May 2012
  18. 18. Auditing and Consulting in XBRL 19
  19. 19. Investors’ perspective on XBRL(users of financial information) 20
  20. 20. What could XBRL be used for? 21
  21. 21. Footnotes are very importantHow often do you use numerical data ONLY found in a company’s footnotes? 22Source: “An Evaluation of the Current State and Future of XBRL and Interactive Data for Investors and Analysts”Columbia Business School, Centre for Excellence in Accounting and Security Analysis, December 2012
  22. 22. Timeliness of the financial data How quickly after its issuance do you require SEC-mandated financial info?Sum = Atleast 50% 23 Source: “An Evaluation of the Current State and Future of XBRL and Interactive Data for Investors and Analysts” Columbia Business School, Centre for Excellence in Accounting and Security Analysis, December 2012
  23. 23. Broader analyst coverage 24Source: “Transforming business reporting”, Presentation by XBRL International Inc.
  24. 24. Awareness about XBRL (US) 25Source: “An Evaluation of the Current State and Future of XBRL and Interactive Data for Investors and Analysts”Columbia Business School, Centre for Excellence in Accounting and Security Analysis, December 2012
  25. 25. Awareness to XBRL (Global) 26Source: “CFA Institute Member Survey: XBRL”, CFA Institute Market Intelligence, December 2011
  26. 26. Use of XBRL (Global) 27Source: “CFA Institute Member Survey: XBRL”, CFA Institute Market Intelligence, December 2011
  27. 27. Reasons for not using XBRL yet 28Source: “An Evaluation of the Current State and Future of XBRL and Interactive Data for Investors and Analysts”Columbia Business School, Centre for Excellence in Accounting and Security Analysis, December 2012
  28. 28. Universities’ perspective on XBRL (Research and Education) 29
  29. 29. Academic projects (globally) XBRL in classroom: Kennesaw State University 30 Last updated in 2010
  30. 30. XBRL at Waterloo 31
  31. 31. Conclusion: this is the time! 32Source: “Review of 2013 US GAAP Financial Reporting Taxonomy (UGT)” by J. Louis Matherne,Financial Accounting Standards Board, January 16, 2013
  32. 32. Useful Resources• http://xbrl.squarespace.com/ – website of the father of XBRL (Charles Hoffman) that contains learning materials• http://xbrl.org/ – XBRL International (key resource for information, news, events, etc.)• http://www.sec.gov/edgar/searchedgar/webusers.htm – new website of SEC for Interactive Data• http://xbrlwiki.info – Wiki type of resource about XBRL• http://www.eurofiling.info/ – XBRL in Europe 33

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