Advanced Accounting Information Systems

1. Advanced Accounting Information Systems Day 30 Introduction to XBRL November 4, 2009

2. Announcements First XBRL assignment for early filers due today (11/4); for all others due Friday Graduate student paper topics Midterm progress

3. Objectives Obtain an overview understanding of XBRL and its role in computerized financial and business operations reporting Understand key terms such as taxonomy, instance document, markup, and meta-data Understand key aspects of SEC filing program Understand the XML document foundation Describe differences between XML and UBL

4. Question for today What is meta-data? How does XML differ from XBRL?

5. Question for today What is a standard taxonomy? What is an instance document?

6. Difference between HTML and XML and XBRL HTML Tags provide presentation information XML Extensible – adding meaning to data and storing and processing it as information As long as you follow the rules, you can extend or add to tags Markup Surrounding pieces of data with tags that add meaning

7. Paper based financial statements reporting HTML based financial statements reporting Off Line LAN, Intranet, Internet INTRODUCTION FINANCIAL REPORTING SYSTEM Web(HTML) XBRL(XML) XBRL based financial statements reporting Provide a standard method for preparing, analyzing, and exchanging financial information. Limited accessibility Not allow data exchange,intelligent search, andadaptive presentation

8. Paper Based HTML XBRL Actual Presentation Content INTRODUCTION FINANCIAL REPORTING SYSTEM Cash: 50000 Debt: 10000 Cash: 50000 Debt: 10000 Cash: 50000 Debt: 10000 <B> Cash: 50000 </B> <I> Debt: 10000 </I> Cash { font-weight: bold } Debt { font-style: italic } <Cash> 50000 </Cash> <Debt> 10000 </Debt>

9. XBRL BASICS • Instance document • XML file that contains business reporting information and represents a collection of financial facts and report-specific information using tags from one or more XBRL taxonomies • Element A financial reporting concept, defined in XBRL • ContextEntity and report-specific information (reporting period, segment information, and so forth) required by XBRL that allows tagged data to be understood in relation to other information • Taxonomy • Electronic dictionary of business reporting elements used to report business information • Standard taxonomyDeveloped for U.S. companies by XBRL.US • Taxonomy extensionsCreated by individual companies

10. Facts Definition, Content, and Presentation Reporting XBRL Taxonomy XBRL Instance <element name="CashCashEquivalents" id="cust_CashCashEquivalents" type="xbrli:monetaryItemType" substitutionGroup="xbrli:item" nillable="true" xbrli:balance="debit" xbrli:periodType="instant"/> <cust:CashCashEquivalents decimals="0" contextRef="End2004" unitRef=“USD"> 35000 </cust:CashCashEquivalents> XSLT Style Sheet <xsl:for-each select="//cust:CashCashEquivalents"> <xsl:if test="@contextRef[.='End2004']"> <xsl:value-of select="format-number(current(), '###,###')"/> </xsl:if> </xsl:for-each> XBRL BASICS Cash and Cash Equivalents $35,000 Dictionary Human readable format Data (Content) Machine readable format Rendering (Presentation)

11. WHAT DOES XBRL LOOK LIKE? • With XBRL, each item of a company’s reported information is tagged with a unique code identifier. HTML or PDF Format XBRL Format

12. HOW XBRL WORKS

13. MANDATE BASICS • SEC rule proposal May 30, 2008 • Adopted by SEC on December 17, 2008 • Basics of the rule: • Required primary financial statements (PFS) and footnotes for all issuers using US GAAP/IFRS for periods ending June 15, 2009 or later • Year 1 – all large accelerated filers (worldwide equity float above $5 billion) • Year 2 – all other accelerated filers • Year 3 – all others • First year PFS plus block tag footnotes • 2nd year include detailed tag footnotes • 30 day grace period for first filing of PFS and detailed footnotes

14. XBRL Emerging technology under the auspices of XBRL International Used to tag each piece of financial and business operations information in a standard way so that it can be validated, stored, and processed by computerized applications XBRL specifications Standard taxonomies Instance documents Metadata Adds meaning to data

15. Why is XBRL Important?

16. Brief History of XBRL

17. EVOLUTION OF XBRL: A HISTORICAL PERSPECTIVE First specification of the XBRL Taxonomy for Financial Statements for the commercial and industrial U.S. companies. International Accounting Standards Board (IASB) released a core taxonomy of XBRL for Financial Statements(IASC 2001). Revised XBRL Specification 2.1 was released by International Steering Committee of XBRL International. Charlie Hoffman introduces the potential use of XML for financial reporting. XBRL proposed mandating companies furnish statements in XBRL format. First meeting of the XFRML Steering Committee. SEC announces expedited reviews for XBRL filers. October 1999 July 2000 April 2002 April 2004 January 2006 1997 May 30, 2008 01/1997 12/1997 12/1998 12/1999 12/2000 12/2001 12/2002 12/2003 12/2004 12/2005 12/2006 12/2007 12/2008 December 17, 2008 December 2003 November 2001 September 2007 August 1999 April 2000 April 2005 SEC adopts XBRL mandate. 12 companies, (besides the AICPA), including ‘Big 5’ joined the project as members of the XFRML Steering Committee. XBRL Specification 2.1 was approved and released by International Steering Committee of XBRL International. XFRML Steering Committee was officially changed to XBRL Steering Committee. XBRL US project team completes tagging of US GAAP (XBRL US GAAP Taxonomies 1.0). SEC XBRL Voluntary Financial Reporting Program (VFRP) The second specification of the XBRL was released for public comment (see at http://www.xbrl.org for details).

18. Glossary of New Terms – Chapter 1 EDGAR FDIC FFIEC Instance documents Meta-data XBRL XBRL Specifications 2.1 XBRL taxonomies XML

19. XML Document Foundation XML vocabularies discussed in class Universal Business Language (UBL) XBRL Design goals of XML Usable over the Internet Support a variety of applications Preferred way to move data between software applications on a computer network Be human-readable XML documents Contain tagged items of data and conform to specific rules and syntax that make them processable by all XML-enabled software applications Well-formed XML documents contain tags and data items in a nested hierarchy

20. UBL UBL 2.0 XML vocabulary that defines the structure and contents of common business documents Catalogue, Order, Invoice, Remittance advice, Reusable data components that appear in them such as ID, Name, IssueDate, and Item UBL Catalogue Business document that describes items, prices, and other details about products or services available for sale See Figure 2.1 and 2.2

21. XML Document Foundation XML documents Contain tagged items of data and conform to specific rules and syntax that make them processable by all XML-enabled software applications Well-formed XML documents contain tags and data items in a nested hierarchy Element Tag set and its contents Matching beginning and ending tag name along with its content Root element Parent of the entire XML document

22. Rules for Well-formed XML Documents An XML document can have one and only one root element. All elements must have matching beginning and ending names, and XML is case sensitive Elements can contain attributes that add information about a specific element and appear following the beginning element name All elements must be properly nested

23. Purpose of Basic Rules for XML Documents Provide foundation for the creation of humanly-understandable tags (element names) to ‘markup’ data items with descriptive metadata (data about data) Provide structure that enforces a strict hierarchy that results in very efficient computer processing

24. UBL Catalogue Open-source software standards for e-business and Web services Created by OASIS Provides complete XML-based library of business documents to be used in e-business transactions Reusable data components Standard way business can encode in computer-readable form the information necessary to describe the products and services it has available Can be rendered as a printed document or a Web page Can also be transmitted from seller to potential buyer via Internet

25. UML Prolog and Documentation Statements Like all XML vocabularies, UBL has its own rules and guiding principles Prolog All XML documents start with a prolog Processing instructions to be used by an XML processor and additional information such as documentation and structure information All XML document prologs start with an XML declaration and version information <?xml version=“1.0” encoding=“UFT-8”?> 8 bit Unicode – preferred encoding schem for email and web pages Documentation statements Can appear anywhere in an XML document Always in form <! - -Documentation statement - - >

26. Beginning root element name Always the first tag in XML document AFTER the prolog Also referred to as the ‘document element) because it contains all of the document’s other elements nested within it <Catalogue> </Catalogue> XML document always starts and ends with its root element name Choose name carefully Need to be descriptive about the contents and purpose of the XML document Xbrl root name is ??

27. Practice What are the child elements of the PostalAddress element shown in Figure 2.2?

28. XML Attributes All XML elements can have one or more attributes Contained within the beginning element name brackets (<>) and further explain the meaning of an individual element Have their own name and a value in the following format: AttributeName = “attribute Value” PriceAmount Used in each Price element Rerquired to have a currencyID attribute

29. Practice How would you interpret the data in the <Price> element within the second <CatalogueLine> element?

30. Rules for UBL documents Each has unique root element chosen to correspond to document’s purpose Each has required ID element to uniquely identify document and IssueDate element to fix it in time Each has two party elements appropriately named for purpose of document to identify provider/supplier and customer/buyer parties to document Each has at least one line element appropriately named for purpose of document. Each line element is required to have ID element and appropriate item information

31. XML and UBL in Business

32. Summary XML documents Used in business to store and transmit data Contain data ‘tagged’ with meaningful XML elements (metadata) in a strict hierarchy Basic unit of information in an XML document is an ‘element’ Consists of beginning and ending element name, attributes, and data values or other elements nested within it All well-formed XML documents follow a basic set of rules (help standardize XML documents so they can be efficiently processed by software applications) One and only one root element Matching beginning and ending element names All elements can contain attributes All elements must be properly nested

33. Glossary of New Terms Attributes Electronic data interchange Element OASIS Open-source software standards Prolog Reusable data component Root element UBL vocabulary Valid XML documents Well-formed XML documents XML web services

34. Questions for Friday What is the purpose of the XML schema language? Distinguish between Namespaces and XLink?