6th University of Kansas International Conference on XBRLTransparency, Assurance, and Analysis

April 26, 2013

J. Louis MatherneChief of Taxonomy Developmentlmatherne@fasb.org

Key Goals for 2013 FASB Financial Data Analysis ASU Integration Understanding User Requirements UGT Element Usage

Topics

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Concurrent Taxonomy Exposure Drafts (TED) /Implementation Guides (IG) with Accounting Standards Updates Exposure Drafts

Help drive improvements in data quality Promote a stable taxonomy XBRL Implementation Guides

Increase input from data aggregators / users Establish banking / financial services industry group Support change management for all constituents

Key Goals for 2013

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FASB Financial Data Analysis

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FASB XBRL Team assists in obtaining financial statement data

Disclosure topics where we have provided data:- Expected return of pension plan assets- FVO disclosures- Repurchase agreements- Joint ventures of REITs- Accounting changes and error corrections- Business combinations- Segments- Unremitted foreign earnings- Revenue recognition element use and label terminology

FASB Data Requests

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Query: Identify trend in expected return on plan assets

Can this be obtained through XBRL data?

XBRL DataExample 3 – FASB Data Request

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XBRL DataExample 3 – FASB Data Request

Key: Element Name

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XBRL DataExample 3 – FASB Data RequestRun query

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XBRL DataExample 3 – FASB Data Request

Results Exported to Excel

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XBRL DataExample 3 – FASB Data Request

2008 2009 2010 2011 2012Average 7.74% 7.49% 7.34% 7.08% 7.23%

Median 8.00% 8.00% 7.75% 7.50% 7.50%

Mode 8.00% 8.00% 8.00% 8.00% 7.50%

Max 12.30% 12.30% 15.00% 14.25% 9.20%

Min 2.50% 1.40% 0.40% 0.24% 3.00%

Count 379 1126 1309 1288 57

Results - Table

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ASU Integration

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Financial Reporting Model

Conceptu

al(Principles)

Logical(Business Requirements)

Physical(Application)

Accounting Standard Setters

Data Modelers

Focu

s is

on

Prin

cipl

esFocus is on A

pplicationTraditional print media

New digital media

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On FASB AgendaDeliberate

Ballot ExposureDraft Deliberate Ballot Final

WatchEngage

ModelDisclosure

Expose Taxonomy Fragment

Revise Revise Final

Accounting Standards Update (ASU) Exposure Process

• Create example disclosure with ASU Project Team

• Create elements & modeling

• Create instance document

• Expose TED concurrent with ASU ED

• Revise based on public feedback and Board deliberations

• Release in base taxonomy as complete

Steps

Taxonomy Exposure Draft (TED) Process

Taxonomy Exposure Draft Process

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XBRL team member assigned to project team based on topic area

Participation/presence at Board discussions Links on website between exposure documents

and XBRL ASU Taxonomy change page Benefits of earlier integration in the process

Inform standard setting process Conceptually align approach Consider implications of data model Assist with research

Accounting Standards Updates

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Recent Projects Reclassifications from AOCI

- Discussions with project team influenced modeling - users wanted effect of reclassification adjustments on Income Statement line items

- XBRL Team prepared memo to Board on impact to UGT of presentation considerations

- Participated in Board meeting to discuss memo- Follow up with Board member individually for further discussion- Resulted in ASU containing XBRL team recommendation

(parenthetical requirement) Repurchase Agreements

- Discussions with project team on differences in definition of repurchase agreements between ASUs (Balance Sheet Offsetting and Repurchase Agreements)

- Identified need for additional element to reconcile 16

Recent Projects Revenue Recognition

- Discussions with project team regarding impact to UGT of changes to presentation and disclosure requirements from original ED

- Identified area in which XBRL data could assist project team with research

- Clarified intent regarding contract assets/liabilities resulting in potential less impact to UGT

Discontinued Operations- Discussions with project team on appearance of redundancy in

disclosure requirements, inconsistency in implementation guidance and reversion of definition

- Result is clarification of disclosure, removal of inconsistencies in exposure draft and update of NTS for change in definition

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Review of ASU Impact to UGT – XBRL Team Most current draft available/listen to Board discussions

- Important to understand underlying accounting & user expectations

- Scope changes impact- Focus on presentation / disclosure areas and

implementation guidance section Identify areas of UGT that will be impacted

- Flat file useful for filtering (references, element search)- Amendment section of ASU- Identify disclosure sections of UGT impacted- Consider impact to other areas (cash flow, disclosure

overlap)

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Review of ASU Impact to UGT – XBRL Team Assess impact

- New elements- Deprecations- Definition changes (conform to style guide)- Calculation relationship changes (additions, deletions)- Reference changes (additions, deletions)

Structure appropriateness- Dimension/Line item approach- Balance type - Income or cash flow perspective- Period type – consider context guide- Item type – consider EFM, SEC Staff Interpretations

Question E.21, unit registry- Conform to XBRL Style Guide

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Review of ASU Impact to UGT – XBRL Team

Discussion with project team- Prepare targeted questions to clarify open items

If extensive may be helpful to show specific section of ASU compared to section of UGT

Expectations of line items for general requirements Which amounts expected to agree to face financials Expectation of further breakdowns of values Impact to other areas of Codification/UGT

Discussion with TAG Modeling considerations

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Meeting Data Provider Requirements

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• Data quality and assurance• Extensions are a concern but can be manageable• Tagged earnings release• Greater coverage of the 10K and 10Q• Reported fact value relationships matter• Much analysis is performed based on topic• How to identify changes from filing to filing and

taxonomy to taxonomy• Prefer tabular information over narrative• Expressed concern that service providers are providing

conflicting guidance• Looking forward to inline XBRL

What we know so far about data provider expectations

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• Revised, streamlined, and stable calculation hierarchy• Stabilize taxonomy but XBRL taxonomy and instances

will continue to change

Need to focus on better change management from a data provider perspective

FASB – Addressing data provider requirements

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UGT Element Usage

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UGT Element Usage 2012 10-Ks

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“Rough” Estimate

UGT Element Usage 2012 10-Ks

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“Rough” Estimate

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UGT Element UsageAssume All Used Equally

Normalized?

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UGT Element Usage Target?

UGT Element Usage – Ideal?

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UGT Element Usage Target?

Questions

?

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Bonus Slides

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Data Modeling in the Standard Setting Process

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Modeling ASU Presentation and Disclosure Requirements Shift from modeling based on:

- Paper-based financial reports presentations- COD/ASU descriptions and related implementation

presentations

Shift modeling to:- Consideration of underlying relationships among fact

values- Contemplation of data consumption

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Questions we need to ask1. WHAT is the underlying relationships of reported fact values based on common or unique disclosure structures?

2. WHAT is the best way to capture the underlying relationship - through a calculation or dimensional model?

3. WHAT is the most effective way to provide the information to data consumers?

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The General Principles Behind Our “Data Modeling” Approach

General Principles: Recognize Primary Domain - Primary Line Items

For example, Balance Sheet items, or “Revenue” etc.

Identify Secondary Attributes or Disaggregation – Dimension Each disclosure is a further description of face statement fact value attributes

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Connect Financial Reports Analysis with Data Modeling

Other Considerations: Same Facts Should be Modeled in the Same Way

Users’ Perspective/Business Objective- Example Reclassification from AOCI ASU

The Board received requests from financial statement users looking for the effect of reclassification adjustments on INCOME STATEMENT LINE ITEMS; AOCI and reclassification components are two fact value attributes of the primary domain and are modeled as dimensions.

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7 “What” Questions We Should Ask During the Data Modeling Process

WHAT statutory requirements does the model need to capture?

WHAT common practice requirements does the model need to capture based on traditional paper-based financial reports? *

WHAT is the underlying relationships of reported fact values based on common or unique disclosure structures?

WHAT is the best way to capture the underlying relationship - through a calculation or dimensional model?

WHAT is the most effective way to provide data users the information?

WHAT is the common, flexible data model - “the template”?

WHAT taxonomy structural requirements (EFM, style guide, etc.) does the template need to meet?

* Subject to circumstance where no actual financial reports available

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WHAT is the best way to capture the underlying relationship?

Line Item Modeling Approach

Generally acceptable for items that are understood as primary, (i.e., revenue, cost of goods sold, etc.)

Comparability more affected by line item extensions

Dimension Modeling Approach

Effective way to model the disaggregation or attribute identification of a primary concept

Comparability less affected by member extensions

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WHAT is the most effective way to provide data users the information?

Calculation Relationship

All fact value attributes will be contained within the line item as one concept.

All of the line items available would have to be known that relate to this information and then searched for within the data to see if it exists.

Dimensional Relationship

Allows the data to be “sliced and diced” as needed by the users of the information.

Depending on what the users of the information are looking for, they can extract the attributes that are important to them.

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Organize the Disclosures in the “Template”

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Data Model Scorecard® A tool that helps us evaluate the “template” post data modeling process.

Steve Hoberman & Associates, LLC www.stevehoberman.com

# Question ScoreModel Score % Comments

1How well do the characteristics of the model support the type of model? 10      

2 How well does the model capture the requirements? 15      

3 How complete is the model? 15      

4 How structurally sound is the model? 15      

5 How well does the model leverage generic structures? 10      

6 How well does the model follow naming standards? 5      

7 How well has the model been arranged for readability? 5      

8 How good are the definitions? 10      

9 How consistent is the model with the enterprise? 5      

10 How well does the metadata match the data? 10        TOTAL SCORE 100      

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Example – Other Comprehensive Income

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Disclosing Reclassifications Out of AOCI on the Face Statements

How do you distinguish expense amounts before and after the effect of reclassifications out of OCI?

How do you distinguish gain on sale of securities amounts before and after the effect of reclassifications out of OCI?

What if there is more than reclassification adjustment?48

Using “Line Item” Approach

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Using “Dimension” Approach

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OCI - Template

New AxisNew Member

Accumulated Net Unrealized Investment Gain (Loss) [Member]

Accumulated Defined Benefit Plans Adjustment [Member]

Interest Rate Contract [Member]

Credit Risk Contract [Member]

Foreign Exchange Contract [Member]

Commodity Contract [Member]

Gains and losses on cash flow hedgesInterest and Dividend Income, Operating 1,000Interest Expense, Other (500)

Revenues 2,500Cost of Goods Sold (2,000)

Unrealized gains and losses on available-for-sale securities

2,300

(285)Interest Expense, Other (15)

Amortization of defined benefit pension items

(2,000)

(2,500)

(1,500)

1,000 2,000 (6,000)

(250) (500) 1,500

750 1,500 (4,500) (2,250)

For the Period Ended December 31, 201XReclassifications out of Accumulated Other Comprehensive Income (a)

Notes to Financial StatementsEntity XYZ

Income (Loss), Including Portion Attributable to Noncontrolling Interest

Reclassification from Accumulated Other Comprehensive Income [Axis]

Income Tax Expense (Benefit), Continuing Operations, Discontinued Operations, Extraordinary ItemsNet Income (Loss), Including Portion Attributable to Noncontrolling Interest

Equity Components [Axis]

Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]

Reclassification from Accumulated Other Comprehensive Income [Member]

Derivative Instrument Risk [Axis]

OCI, Reclassification, Pension and Other Postretirement Benefit Plans, Net Gain (Loss) Recognized in Net Periodic Benefit Cost, before TaxOCI, Reclassification, Pension and Other Postretirement Benefit Plans, Net Transition Asset (Obligation), Recognized in Net Periodic Benefit Cost, before TaxOCI, Amortization, Pension and Other Postretirement Benefit Plans, Net Prior Service Cost (Credit) Recognized in Net Periodic Benefit Cost, before Tax

Available-for-sale Securities, Gross Realized Gain (Loss), Excluding Other than Temporary ImpairmentsOther than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net

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Example - Revenue Recognition

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Disaggregation of Revenue 605-10-50-6 An entity shall disaggregate revenue from

contracts with customers (excluding amounts presented for customers’ credit risk) into the primary categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. To meet the disclosure objective in paragraph 605-10-50-1, an entity may need to use more than one type of category to disaggregate revenue.

Revenue Recognition – Exposure Draft

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605-10-50-7 Examples of categories that might be appropriate include all of the following:

- a. Type of good or service (for example, major product lines) - b. Geography (for example, country or region) - c. Market or type of customer (for example, government and

nongovernment customers) - d. Type of contract (for example, fixed-price and time-and-materials

contracts) - e. Contract duration (for example, short-term and long-term contracts) - f. Timing of transfer of goods or services (for example, revenue from

goods or services transferred to customers at a point in time and revenue from

- g. Sales channels (for example, goods sold directly to consumers and goods sold through intermediaries).

Revenue Recognition – Exposure Draft

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Revenue Recognition - Template

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Preliminary Data Model of 605-10-50-7