enhancing corporate reporting for the capital markets mike willis founding chairman, xbrl...

Enhancing Corporate Reporting for the Capital

Markets

Mike WillisFounding Chairman, XBRL International

Partner, PricewaterhouseCoopers

mike.willis@us.pwc.com

Rob BlakeSecond Vice-Chair, XBRL International

Director - Emerging Technologies, Microsoft

robblake@microsoft.com

Enhancing Corporate Reporting for the Capital Markets – XBRL Exchange Reporting Objectives What XBRL Offers What is XBRL Why XBRL Now Next Steps

Exchange Reporting Objectives Timely, accurate and reliable access to data Increased visibility of reported data Enhanced flexibility of changes in reporting More effective production of data More effective consumption of data Better security Lower costs Increased frequency

Enhancing Corporate Reporting for the Capital Markets – XBRL Exchange Reporting Objectives What XBRL Offers What is XBRL Why XBRL Now Next Steps

Why is Transparency Important?

Greater transparency will enhance trust.

The effectiveness of the world’s capital markets depends on public trust, and trust depends on the timely availability of complete, relevant, and reliable information

Corporations have the obligation to provide information to their stakeholders

Stakeholders are demanding greater transparency

XBRL & Web Services enable simple desktop analytical tools to deliver greater transparency

XBRL – Ready for Prime Time

“Some critics have suggested

that XBRL is not ready for

primetime. In fact, it is.”

Hon. Richard H. BakerChairman, Capital Markets Subcommittee

Enhancements to Reporting Clearer communication More cost effective Enhanced flexibility to meet changing

requirements More accurate, timely and reliable reporting Easier to use than current formats Enhanced analysis capabilities

Let’s see what this means to investors and regulators……….……….

Financial Report – Before XBRL

Financial Report – After XBRL

Here is how this works

http://www.nasdaq.com/xbrl

High Consumption Cost Impacts Visibility

29%

16%

55%

16%8%

59%

12%

29%

44%

76%

8%

48%

No ResearchCoverage

One Research Analyst More than OneResearch Analyst

NASDAQ (US)NYSE (US)

NASDAQ (Non-US)NYSE (Non-US)

Includes all common stock on NASDAQ National Market and NYSE.Source: Thomson Financial. December 2002.

Visibility of Information The first obstacle to visibility

Language

XBRL can help to increase the consumers access to information in their own language regardless of what language the report is published in.

How accessible are your public reports?

Enhancing Corporate Reporting for the Capital Markets – XBRL Exchange Reporting Objectives What XBRL Offers What is XBRL Why XBRL Now Next Steps

What is XBRL?

XBRL (eXtensible Business Reporting Language) is:

An information format designed for the Internet.

Freely available

Developed and maintained by over 220 supply chain participants

Based on accepted reporting standards The convergence of:

Technology = XML-based specification Language/dictionary = Terms by jurisdiction/industry Consortium Participants = Supply chain members

…a digital language for business reporting!

Scope and Role of XBRL

ExternalFinancialReporting

BusinessOperations

InternalFinancialReporting

Investment,Lending,

RegulationProcesses Economic

Policymaking

Participants

AuditorsTradingPartners

Investors

FinancialPublishersand Data

Aggregators

Regulators

Software Vendors

ManagementAccountants

Companies CentralBanks

XBRLXBRLXBRLXBRL XBRLXBRLXBRLXBRL

XBRL for G/LJournal Entry

Reporting

TodayXBRL for Financial

Statements

The GrowingFamily

‘99 ‘00 ‘01 ‘02

Members of XBRL International…

‘03

XBRL International Non-profit organization Manages the royalty-free intellectual property Facilitates knowledge sharing among members and the

public Provides global framework for XBRL development

Japan UnitedStates

Australia

Spain

Ireland

GermanyCanada

UnitedKingdom

IASB

China

Sweden

Denmark

Switzerland

Netherlands

NewZealand

Brazil South Africa

Korea

Colombia

Argentina

Singapore

XBRL Guiding Principles Market driven model … win, win, win

Start simple, be inclusive, “agree to agree” Broad supply chain participation XBRL International members support XBRL Members do not compete on framework Build structure and systems to support open community

and parallel taxonomy development Liaise with other XML efforts Neutral third party facilitator For long term success – XBRL International

Defines XML and other technology standards

World Wide Web Consortium (W3C)

XML Framework Standards

RosettaNet, OASIS, ebXML, Web Services-Interop (WS-I)

XML Content Standards XBRL, HRML, RIXML, FinML, NewsML, FpML

XML Application Providers

Microsoft, BEA Systems, Altova, IBM

(and lots more!)

Types of XML Industry Activity

IFRS GAAPConceptual Framework

IFRS GAAPPrimaryTerms

IFRS GAAPFS

Terms

XBRL “Building Blocks”

IFRS GAAPBank Terms

Bank of Germany

Terms

Foundational Terms

Industry Terms

Company Specific Terms

Reporting Framework

Provides a cost effective platform

for IFRS/GAAP convergence

Enhancing Corporate Reporting for the Capital Markets – XBRL Exchange Reporting Objectives What XBRL Offers What is XBRL Why XBRL Now Next Steps

Pervasive Supply Chain Problems Production costs are high

Consumption costs are high

Leads to process delays, higher risks, and poorly informed business decisions

Benefits of XBRL for Producers Tell your own story (precise & clear) Lower cost of producing information Accelerate adoption of reporting models Enhanced functionality Ease of use Better control environment Enhanced analytical capabilities More timely, accurate, data for decisions

Benefits of XBRL for Consumers Enhanced analytical capabilities More timely, accurate, data for decisions Enhanced functionality Ease of use Facilitates language translations Faster access to information Lower cost of consuming information

Live Applications APRA (2001) EDGAR Online (2001) DATEV/Bundesbank (3Q 2002) Wacoal (4Q 2002) – Internal Reporting OneSource (1Q 2003) Tokyo Stock Exchange (1Q 2003) Sumitomo Mitsui Banking Corp. (1Q 2003) Danish Commerce & Companies Agency (1Q 2004) Dutch Water Authority (3Q 2003) – Internal Reporting UK Inland Revenue (4Q 2003) KOSDAQ – Korea (4Q 2003) National Tax Agency of Japan (1Q 2004) US FDIC (3Q 2004)

Morgan Stanley, Reuters, Microsoft NASDAQ-MSFT-PricewaterhouseCoopers Pilot

Exchange Projects

KOSDAQ Tokyo Stock Exchange Luxembourg Exchange Shenzen Exchange New Zealand Exchange NASDAQ

Market Implementation Considerations

Taxonomy development External reporting – GAAP External reporting – Statutory

FASB/IASB Fellowships

Tools

Assurance guidance

Representative XBRL-enabled Products Shipping

SAP mySAP financials Microsoft Business Solutions Navision Oracle FSG Creative Solutions (et al.)

Announced Microsoft Office Solution Accelerator for XBRL Hyperion Financials PeopleSoft Enterprise Financial Management CaseWare Financials Hitachi GEMPlanet

Microsoft Office Solution Accelerator for XBRL

Enhancing Corporate Reporting for the Capital Markets – XBRL Exchange Reporting Objectives What XBRL Offers What is XBRL Why XBRL Now Next Steps

Next Steps…. Provide local market leadership

Initiate XBRL project in your market Evangelize benefits/thought leadership Liaison with and/or join XBRL International consortium Collaborate on forming provisional jurisdiction

Develop reporting objectives and framework Assess inventory of tools Participate in XBRL International conferences

Seattle Conference Nov. 2003 (www.xbrl.org/seattle)

New Zealand May 2004

Questions?

Enhancing Corporate Reporting for the Capital

Markets

Mike WillisFounding Chairman, XBRL International

Partner, PricewaterhouseCoopers

mike.willis@us.pwc.com

Rob BlakeSecond Vice-Chair, XBRL International

Director - Emerging Technologies, Microsoft

robblake@microsoft.com