enhancing corporate reporting for the capital markets mike willis founding chairman, xbrl...
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Enhancing Corporate Reporting for the Capital
Markets
Mike WillisFounding Chairman, XBRL International
Partner, PricewaterhouseCoopers
Rob BlakeSecond Vice-Chair, XBRL International
Director - Emerging Technologies, Microsoft
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
Rob BlakeSecond Vice-Chair, XBRL International
Director - Emerging Technologies, Microsoft