xbrl - basics

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XBRL Basic Concepts


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Agenda

XBRL Meaning and EvolutionXBRL Structure

Taxonomy

Instance Document

Benefits and Application


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XBRL - Meaning The Extensible Business Reporting Language (XBRL) is one

of the family of XML . It is a language used for creating business reports. The

reports could be financial and non financial.

It is also a standard means of communicating informationbetween businesses and Internet.

Extensible- Designed to allow addition of new features at alater date

Financial Reports Non Financial Reports

Balance sheet Performance measurements

Cash flow statements Regulatory reporting forms

Income statements Loan applications


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XBRL History XBRL original idea conceived by Charles Hoffman

XBRL Developed by XBRL International XBRL International- A non-profit consortium of

major companies, organisations and governmentagencies.

These include the worlds leading accounting,

technology, government and financial servicesbodies. This collaborative effort began in 1998 and has

produced a variety of specifications and taxonomiesto support the goal of providing a standard, XML-

based language for digitizing business reports inaccordance with the rules of accounting in eachcountry or with other reporting regimes such asbanking regulation

Current specification XBRL is version 2.1 Specification provides fundamental definition of howXBRL works


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XBRL - Evolution Internet became a success as a conduit for e-commerce,

e-mail Internet is being increasingly used as a medium for

electronic delivery of business information

However, there are issues

Variety of incompatible languages

Whole range of incongruent platforms

Data stored in HTML or PDF formats are often not queriable

The information is not stored in an easily comparableformat

It takes time to access the information

Accordingly, the need arose to ensure faster, efficientand reliable electronic exchange of business information

XBRL has been developed for standardizing theinformation reported electronically


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XBRL Reports

To get business reports, XBRL describes two kinds ofdocuments Taxonomy and Instance documents. Eachdocument serves a specific purpose and together thesedocuments constitute a business report

Business Reports


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Taxonomy documents defines the concepts that are to be reported.

A concept is a basic piece of information in a report.

For example, Taxonomy document may be created for a simple

balance sheet. In this case Taxonomy document will define the

following concepts.

Taxonomy document also describes the relationship between

these concepts.

Assets Loans

Current assets Accounts Payable

Stock Equity

Debtors Current liabilities

Taxonomy - Meaning


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Taxonomy Structure

Taxonomy structure

Schema file- That contains theDefinition of Business

Reporting concepts

Linkbase Defines theRelationship between

Elements


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Defining concept

Concept

Elements

Name -Current Assets,

Debtors,Current liabilities

Substitution group-Item or tuple

Type-Monetary type

String typeDate type

Balance Debit orCredit


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Examples

= Current Asset Type = Xbrl:

monetaryitemType substitution Group = Xbrli:itemXbrli:balance=debit/>

Instance with Tuple Tuple is an Element that contains otherelements. It is used when a concept cannot be properlyunderstood independently. For example to define an address withStreet name, city and postal code- In this address is created as

Tuple


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Relationships

Taxonomy document Not complete

without describing Relationships

Relationship between concepts are created

using Xlink

Xbrl uses Xlink for different purposes inXbrl Taxonomy documents

Definition links

Calculation links

Presentation links


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Definition Relationship

Defines how the concepts are related to eachother


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Equivalency Relationship

Dimension- Element and Element-Dimension These areused to express relationships between two concepts thatare considered Equivalents

For instance Total of assets by geographical area shouldbe equal to total of assets by Product line


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Calculation Relationship

Calculation relationship shows how conceptsparticipate in computation and summation

It would show how stock, debtors would sum upto current assets or how current liabilities andother liabilities would sum up to total liabilities

Calculation relationship would also includeweightage


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Presentation Relationship

Presentation relationship defines how conceptsshould be presented or displayed

The groupings can be performed in many ways

For example, a Balance Sheet contains Assets,Equity, and Liabilities

Assets consist of Current Assets and Non-current

Assets, etc.

The presentation linkbase helps organize these

elements using parent-child relations (a

hierarchical structure)


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Structure of Links

Xlink uses locators and Arc to create a relationship betweentwo concepts

Locators Identifies where the concepts are defined

Arc is created that connects the Locators


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Name Space

XBRL not restricted using onetaxonomy ( vocabulary) at a time

Name space is used When morethan one taxonomy is used


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Extending Taxonomies

Taxonomies Extensibility allows to build onExisting Taxonomy

For instance A taxonomy for a company can bebuilt on an existing Taxonomy of a Accountingstandards board

Company specific new elements and relationshipscan be added and defined to the existingtaxonomy


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Example of Extended taxonomy


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Taxonomy document does not show any value. It is justconcepts and relationships

The values are contained in the Instance document Exampleof an Instance document

When concepts from taxonomy documents are reported in an

Instance documents with Value, they are referred to as facts Besides the above, it also gives information of as on what

date, the details are given

Instance document also does not show any relationshipbetween concepts. The facts are jumbled together

Concept from Taxonomy document Value As of date

Accounts payable 90 March 31 2009

Stock 50 March 31 2009

Loans 30 March 31 2009

Instance Document


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Business reports When a taxonomy and Instance documents are combined

together, then it becomes a business report


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Business reports When a taxonomy and Instance documents are combined

together, then it becomes a business report


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ITEM

ITEM ATTRIBUTE

NUMERIC CONTEXT

NON - NUMERIC

CONTEXT

UNIT

PRECISION

ENTITY

PERIOD

SCENARIO

INSTANCE DOCUMENT STRUCTURE


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Example of an Instance document- coding


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XSLT Important part of XBRL Data is separated from

concepts Data recorded in instance documents Can be

interpreted both by humans and computers

XBRL Instance document not a pretty sight

Needs to be transformed into proper form foranalysis and interpretation

Extensible Style Language Transformation (XSLT)style sheets, or Cascading Style sheets (CSS).

Both XSLT and CSS are just XML standards usedfor the presentation of data.


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Why two documents

To reuse the reporting terms Every time a balance sheetis prepared, only a new instance document is to beprepared as only the facts are changing. The meaning ofconcepts remain the same

Also when instance document use concepts from sametaxonomy, the facts are comparable. As the definition ofthe concepts, say assets, the assets of one balance sheetcan be compared with the assets in another balance sheet

The more fluid information is captured in Instance

document and the more static information is captured inthe Taxonomy documents.


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5/1/2012 28

Regulatory

Filings

Web Site

Tax

Returns

Bank

Filings

Printed

FinancialsAccounting

System

Other

Sources ofInformation

XBRL

With XBRL: Multiple Outputs from a Single Specification


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5/1/2012 29

Regulatory

Filings

Web Site

Tax

Returns

Bank

Filings

Printed

Financials

XBRL

Investors

OtherParties

XBRL: Information flow TO stakeholders


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Who are using XBRL ?

B2G - Regulatory Applications SEBI

INCOME TAX

B2L Business to Lenders Banks

B2M Business to Markets

Traditional financial reporting

Business performance reporting

Internal applications


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Xbrl- Advantages Time saving Automating the process of data collection. Multiple report

preparation takes less time. Re keying of data avoided. Xbrl coded

information can be fed in to various instance documents to create required

customized outputs.

Timelyavailable within a reasonably short period from the time of

measurement

Accuratefree of data anomalies and errors and tested for obvious

manipulation. Reliability of data is enhanced

Better data analysis and comparability- Efforts focused on analysis

and decision making rather than laborious process of data compilation and

reconciliation

EfficientThe cost of collecting the information proportionate to the value

of the data collected. Xbrl enabled data can be more easily searched,

analysed and converted into any other form

Companies will benefit from growing importance of websites as a means of

communication- Improve Investor relationship


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Live case of XBRL benefits The Federal Deposit Insurance Corporation (FDIC), the

Office of the Comptroller of the Currency (OCC), and theFederal Reserve System (FRS), known collectively as theFFIEC Call Agencies,wanted to improve the collection andmanagement of financial institution data. Call reports

The FFIEC provided Call Report software vendors with anXBRL, version 2.1 taxonomy that provides all contentrequirements, formulas for data validation criteria, plain

English edit messages, capability to capture and reporteach institutions explanations for valid data discrepanciesand/or fluctuations, and common Instance Documentoutput for transmission (i.e., Internet or Web Services).

Implemented XBRL based report filing system afterproviding for various validation checks in the software.

All the data would have to pass all validity requirementsbefore the Financial Institutions could transmit data


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Live case of XBRL benefits ( Cont)Value realised New

processOldprocess

Cleaner data- Logicalrelationship between data

furnished

95% 66%

Data accuracy- Arithmeticalaccuracy

100% 70%

Faster data inflow From thecalendar quarter end

Lessthan 1

day

weeks

Faster data access Publishing data for public

1 day 10 days

Increased Productivity-Banks/analyst

550-600 450-500


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Workflow: Updating Financial Models

Current Workflow

Report published to the web

inHTML or PDF format

Analyst manually transcribes

numbers into spreadsheet

model

and

analyses results quickly in

order to get a comment out

Process with XBRL

Report published in XBRL format

Numbers automatically loaded into

spreadsheet by an Excel add-in

Analyst has more time to analyse

results with confidence

FinancialModel

updatedAnalysis Conclusions

Companyresults

announced


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XBRL in India - Developments

ICAI Draft general purpose financial reportingXBRL taxonomy finalised for commercial andIndustrial establishments

Draft Taxonomy developed conforming to IndianAccounting standards and company law

Draft taxonomy covers Balance sheet, Profit andloss and cash flow

Taxonomy for banks and NBFCs under preparation

RBI

In oct08 had asked all banks to file theBasel-II return on capital adequacy returns in XBRLformat


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What to do? Identifying how many systems are used in producing business

information Identifying the complexity of business process that go in toproducing business information

Measuring the number of person hours that go into producingkey management information and comparing that figure withthe amount of time that goes into analysis

Critically examining the relevance (the timeliness andpredictive value) of key management information

To discuss the potential effect of digital business reporting onexternal investor relations with the investor-relations staff andadvisers.

Cost savings that can be realized from receiving, storing and

sending information in XBRL format To ensure that the IT staff is aware of the impact that digitalbusiness reporting will have on the activities and that they aregetting up to speed on the technical aspects.

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