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Liv A. WatsonE-Mail: [email protected]
Phone: (812) 499-8149
What Financial Executives What Financial Executives Need to Know About XBRLNeed to Know About XBRL
www.xbrl.orgwww.xbrl.org
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Today’s ObjectivesToday’s Objectives• Overview of XML & XBRL
• Show you how this technology makes doing E-Business:
– Faster
– Cheaper
– Better
• Obtain your views
• Determine how your company will embrace this technology
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Evolution to WEvolution to Webeb Services Services
TechnologyInn
ova
tio
n
FTP, E-Mail,Gopher
Web Pages
Web Services
TCP/IP HTML XML
Connectivity
Presentation
Automation
Browse the Web
Program the Web
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4 From Evansville Courier and Press
Is There A Problem?
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Searching for the word “Mercury” on the Web can provide search results such as--
Hg
Content—without Context
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Astronomy
Aerospace
Music Industry
Publishing or Mythology
Chemical Industry
Auto Industry
<RECORD-LABEL>
<PROGRAM>
<PLANET>
<GOD>
<SYMBOL>
<CAR-MODEL>
“Content in Context” (Industry-specific)
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What is XML?What is XML?XML stands for:
eXtensible
Markup
Language
Universally accepted method of exchanging information
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How does it work?How does it work?• XML gives meaning to information through
the use of tags
<Customer> <Name>Liv A. Watson</Name> <Title>Director</Title> <Company>Edgar Online Inc</Company></Customer>
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Who defines the tags?Who defines the tags?• Tags are defined by industry consortiums • Each industry’s standard tags are commonly
referred to as a taxonomy
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Who’s Building Taxonomies? Who’s Building Taxonomies?
Accounting Advertising Architecture
Automotive Banking Communication
Economics Education E-Commerce
EDI ERP Financial
Healthcare HR Insurance
Legal Music News
Publishing Real Estate Retail
Science Software Supply Chain
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What Is XML?What Is XML?
• “XML is aplatform-independent,
self-describing,
expandable,
standard data exchange format
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XML is Platform IndependentXML is Platform Independent
• Windows
• Unix
• Macintosh
• Mainframe
• Linux
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XML is Self-DescribingXML is Self-Describing
• Example:– <DATE>July 26, 1998</DATE>
• Describes the information, not the presentation
• Format neutral
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XML is ExpandableXML is Expandable
• Whereas HTML has a fixed set of tags– <H1>, <B>, <PRE>
• XML lets you create your own tags– <sugary-substance>– <Shakespearean-character>– <cash-equivalent>
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Who’s Embracing XML now?Who’s Embracing XML now?
• Software developersUsing XML as the core technology for new products
• Database developers Building XML support into their products.
• Industry groupsDeciding how information should be shared.
• Organizations Investigating how to tie their inter and intra company processes together.
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XML Makes Doing E-Business:XML Makes Doing E-Business:
Better
Faster
Cheaper
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• XML for Financial Reporting
• Enables a dramatic improvement in the processing of financial reports
• XBRL documents can be—– Prepared efficiently– Exchanged reliably– Published more easily– Analyzed quickly– Retrieved by investors simply
to enable smarter investments
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• XBRL is:– NOT a new accounting standards but enhances
the distribution and usability of existing financial statement information
– Enabler and an extension for relational database functionality for all financial statement information
Benefits
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Problems XBRL AddressesProblems XBRL Addresses
• Ineffective communication to investors
• Inefficient aggregation and analysis
• Inefficient creation of financial statements
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Process Benefits:Process Benefits:Lowering Financial Reporting CostLowering Financial Reporting Cost
Who benefits
RegulatoryFilings
Web Site
Tax Return
Trade Filings
Printed Financials
Accounting System
Third Party Information
ExplanatoryText
• Today’s external reporting processes– Rework and delay
– Ad hoc and non repeatable
– No path forward
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Process Benefits:Process Benefits:Lowering Financial Reporting CostLowering Financial Reporting Cost
Who benefits
RegulatoryFilings
Web Site
Tax Return
Trade Filings
Printed Financials
Accounting System
Third Party Information
ExplanatoryText
XBRLDocuments
• Common interchange format and storage is good information management practice– Reduces redundancies & discrepancies
– Repeatable processes using tools
– A platform for continuous reporting
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XBRL: Interoperability & Multiple XBRL: Interoperability & Multiple OutputsOutputs
Other Sources of Information
RegulatoryFilings
Intranet /Internet /Extranet
Tax Returns
Bank Filings
Printed Financials
XBRL XBRL
Creditors
Other Parties
Investors
Other Sources of Information
Accounting System(s)
XBRL
Accounting System(s)
Accounting System(s)
Other Sources of Information
XBRL
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XBRL Working Model: Planned Specifications
ExternalFinancialReporting
BusinessOperations
InternalFinancialReporting
Investmentand Lending
AnalysisProcessesProcesses
ParticipantsParticipants
AuditorsTradingPartners
Investors
FinancialPublishersand Data
Aggregators
Regulators
XBRL for G/L Journal Entry
ReportingXBRL for
EDGAR Filings
XBRL for Financial Statements
XBRL for Tax Filings
XBRL for Business Event Reporting
Software Vendors
ManagementAccountants
Companies
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As Presented on the Web
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• Reduces Cost / Enhances Revenue
• Improves Financial Reporting
• Improves Audit Quality
• Improves Client Satisfaction
XBRL and its BenefitsXBRL and its BenefitsBenefits
05Audit.scm
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XMLDocument
XMLDocument
Core Schema
Core Schema
Company Specific
Vocabulary
Company Specific
Vocabulary
Industry Specific Vocabularies
Industry Specific Vocabularies
Transformation
Tools
Transformation
Tools
The XML PuzzleThe XML Puzzle
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Internal to company –Internal to company –Proprietary formatProprietary format
XBRL/XML used to transfer data XBRL/XML used to transfer data across the Internet across the Internet
– – common vocabulary -common vocabulary -
Internal to company –Internal to company –Proprietary formatProprietary format
Company ACompany AData StoresData Stores
Company BCompany BData StoresData Stores
<XBRL><XBRL><XML><XML>
XM
L T
ranslator
XM
L T
ranslator
InterneInternett
<XBRL><XBRL><XML><XML>
XM
L T
ranslator
XM
L T
ranslator
ApplicationsApplicationssuch assuch as
Accounting Accounting SystemsSystems
ApplicationsApplicationssuch assuch as
Accounting Accounting SystemsSystems
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Steps in Technology AcceptanceSteps in Technology Acceptance
VisionariesVisionaries
TaxonomyTaxonomy
Simplification/ToolsSimplification/Tools
AcceptanceAcceptance
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How Do You Get There?How Do You Get There?
Needs AssessmentNeeds Assessment
Design Solution/Business PlanDesign Solution/Business Plan
Training & EducationTraining & Education
ImplementationImplementation
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XBRL Makes Business Reporting EasierXBRL Makes Business Reporting Easier
Better
Faster
Cheaper
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Additional Education SourcesAdditional Education Sources• www.xbrl.org• www.xml.org• www.ebxml.org• www.w3.org• www.rosettanet.org• www.ibm.com/developer/xml• www.microsoft.com/industry/biztalk
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When Will It Reach Critical Mass?When Will It Reach Critical Mass?• “The phonograph is of no commercial use”
- (Thomas Edison, 1880)
• “Everything that has been invented has been invented” - ( Charles Duel, Director US Patent Office, 1899)
• Who the hell wants to hear actors talking?”- (Harvey Warner, 1927)
• “I think there is a world market for about five computers” - (Thomas J Watson, Chairman, IBM, 1943)
• There is no reason for any individual to have a computer in their home” - (Ken Oloson, President of Digital Equipment Corp., 1977)
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Ask YourselfAsk Yourself……• What will your digital industry look like?
• What will be your business model?
• How will your business process support this business model?
• What people skills will you need to manage those new business processes?
• How should you organize to use those people skills to best effect?
• What will your infrastructure need to look like to support those digital processes?
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Products Imbued with Services Delivered Over the Internet
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Final Thought……..Final Thought……..
Change is not what it used to be…..Change has become a process; it’s become a permanent part of the external environment
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Concluding Remarks…..Concluding Remarks…..
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Questions ?Questions ?
EDGAREDGAR ®®
NLINE NLINEOO SMSM
• Liv A. Watson• E-Mail: [email protected]
• Phone: (812) 499-8149