XBRL Update: How Will the SEC Mandate Affect You? Diane Janvrin Assistant Professor

1. XBRL Update: How Will the SEC Mandate Affect You? • Diane Janvrin • Assistant Professor • American Society of Woman Accountants • May 20, 2009 • Thanks to Dr. Rajendra Srivastava, University of Kansas, Dr. Clifton White, University of Delaware, Ernst & Young, LLP, and XBRL.US and XBRL.org for assistance with material preparation.

2. Agenda • What is XBRL? • Overview of SEC final rule for interactive data • Planning for XBRL Reporting • Organizing Data –4 Key Steps •Map •Extend •Tag •Create XBRL document • Impact on Auditors and Investors

3. XBRL BASICS WHAT DOES XBRL LOOK LIKE? HTML or PDF Format XBRL Format

4. 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 • ElementA 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 extensionCreated by individual companies

5. Paper Based HTML XBRL Actual Presentation Content XBRL BASICS 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>

6. 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)

7. HOW XBRL WORKS

8. 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).

9. 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 companies $5 billion + worldwide float • 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

10. SEC Final Rule Summary • Requires companies to provide financial statements in XBRL. • Applies to domestic and foreign companies using U.S. GAAP and, eventually, to foreign private issuers using IFRS issued by the International Accounting Standards Board. • Includes primary financial statements, notes, and financial statement schedules, plus company identifier information • Is a supplement, not a replacement to the traditional electronic filing formats in ASCII or HTML. • Filings would be subject to limited liability within 24 months of the time the filer first is required to submit interactive data files. The limited liability provision will terminate completely on October 31, 2014.

11. Phase-in Three year phase-in schedule: • In year 1, the final rules would apply only to domestic and foreign large accelerated filers that use U.S. GAAP and have a worldwide public float above $5 billion. • Quarterly reports on form 10-Q or annual report on Form 20-F or Form 40-F containing financial statements for a fiscal period ending on or after June 15, 2009. • In year 2, all other domestic and foreign large accelerated filers using U.S. GAAP would be subject to interactive data reporting. • Quarterly reports on form 10-Q or annual report on Form 20-F or Form 40-F containing financial statements for a fiscal period ending on or after June 15, 2010.

12. Phase-in (continued) • In year 3, all remaining filers using U.S. GAAP, including smaller reporting companies, and all foreign private issuers that prepare their financial statements in accordance with IFRS as issued by the IASB would be subject to the same interactive data reporting requirements. • Quarterly reports on form 10-Q or annual report on Form 20-F or Form 40-F containing financial statements for a fiscal period ending on or after June 15, 2011.

13. Submission Format • Interactive data would be required with a company's annual and quarterly reports, transition reports, and Securities Act registration statements.

14. Grace Period • Each company’s initial XBRL filing will have a 30 day grace period • In year 2, for first filing with detailed footnote tags, filers will receive a 30 day grace period

15. Company Website • XBRL formatted financials must be posted on the company’s corporate website, if it maintains one. • For at least 12 months on an issuer’s website. • A company cannot use a hyperlink to the SEC website to satisfy the requirement of posting the interactive data on its own website.

16. Data Tagging Details • US GAAP Filers must use tags released by XBRL US and required by the EDGAR Filer Manual. • Similarly, filers using IFRS as issued by the IASB, will be required to tag their financial information using the most recent list of tags for international financial reporting, as released by the IASCF and specified in the EDGAR Filer Manual.

17. Data Tagging Details (continued) • The filer’s complete financial statements (i.e. the face of the financials) would be required to be tagged in detail. • Footnote tagging is broken out into 4 different levels: • Level 1 –Each complete footnote tagged as a single block of text. • Level 2 -Each significant accounting policy within the significant accounting policies footnote tagged as a single block of text. • Level 3 –Each table within each footnote tagged as a separate block of text. • Level 4 –Within each footnote, each amount (i.e. monetary value, percentage, and number) is required to be separately tagged. Narrative disclosures are not required. • Level 1 would be required in the first submission, Levels 1 through 4 would be required starting one year from the filer’s initial required submission.

18. Previewer and Validation • The SEC’s website contains a portal for companies to make test submissions. • Companies may also use the previewer function to see how their files will look on the viewer prior to making a submission.

19. Planning • Learn about XBRL and your requirements • Where is your company in the mandate? • What MUST you do and why? • What CAN you do and why? • Leverage available XBRL resources • Assemble the oversight team • Develop the project plan, workflow and quality control steps • Staff according to plan • Identify internal personnel • Get training • Hire consultants • Outsource according to plan

20. Planning (continued) • Develop review, approval and filing procedures • Who must be engaged? • Learn taxonomies • Download taxonomies or use online viewer • Understand industry entry points, how to find needed items • Understand collections of information by Statement or Note • Understand how to differentiate individual facts • Learn about the tables and which ones affect your company in Year 1 and subsequent years • Learn about, select and implement software and services • Determine which filings will be tagged • Primary financial statements only? • Notes –detailed or block tagged?

21. OUTSOURCE OR IN-HOUSE • Outsource • Leverage expertise of service provider • Partnering with a known entity, idea-sharing • Less strain on internal resources • In-house • Greater control • Easier for system integrate • Faster close • Lower out-of-pocket costs

22. WHO SHOULD BE INVOLVED • External reporting • Special projects • Legal • Audit committee • Internal/external auditors • Investor relations • IT • Others

23. CONSIDERATIONS WHEN CHOOSING TOOL OR SERVICE • BOTH • Support – hours, form • Training • Map to internal financial management system • Does detailed tagging • Does block tagging • Provides validation • Provides rendering • Has a repeatable process • Security policies • Maintains user groups • Software tool only • Speed of taxonomy loading • Web based, ASP, PC-based? • File size if PC based • Handling changes to taxonomy • Software updates • Processing times • Search capabilities • Service only • Turnaround times • Provides multiple tags

24. WHERE TO FIND US GAAP TAXONOMIES • XBRL.US (www.xbrl.us) • XBRL.ORG (www.xbrl.org) • Commercial and industrial taxonomy • Banking and savings institutions taxonomy • Insurance taxonomy • Real estate taxonomy

25. THE COMPANY TAXONOMY EXTENSION • Common steps that result in extensions: • Create new relationship groups for each statement and disclosure. • Create new element relationships. • Change the ordering of elements to reflect the company financial statement model. • Create and modify ‘element labels’ to conform to the companies ‘human readable’ presentation. • Create new elements with label and definition for a company specific concept.

26. INSTANCE DOCUMENT CREATION “BEST PRACTICES” • Focus on the mapping and taxonomy extension – Element selection documentation and a well crafted custom company taxonomy will greatly simplify the XBRL document creation process • Stick to the workflow – Jumping ahead often results in dead ends and rework. Avoid the idea of building the company taxonomy on the fly • Create new relationship groups for your company financial statements – this will provide a taxonomy that is easier to work with and validate • Use existing elements from the XBRL US GAAP Taxonomies if it represents the appropriate financial concept regardless of its location • Validate early and often – errors accumulate and become harder to fix

27. HOW OFTEN IS TAXONOMY UPDATED AND HOW DO YOU KNOW YOU HAVE THE CURRENT VERSION • XBRL US’ support and maintenance program • Annual updates on marketplace/industry changes • Continual updates with new FASB pronouncements • New releases each January 31 • Most current always available on www.xbrl.us

28. PRESENTATION OF INFORMATION BY RENDERING SOFTWARE • SEC Interactive Data Viewer (www.sec.gov/spotlight/xbrl/xbrlwebapp.shtml) • Rivet DragonView (www.rivetsoftware.com) • Fujitsu Instance Viewer Plugin (www.fujitsu.com/global/services/software/interstage/xbrltools/xbrlviewerplugin.html) • JustSystemsxfy XBRL Viewer (na.justsystems.com/content-xfy)

29. XBRL PRODUCTS AND SERVICES (XBRL.US)

30. XBRL TOOLS (XBRL.ORG)

31. IMPACT OF XBRL ON AUDITORS • SEC’s voluntary XBRL filing program on EDGAR • February 3, 2005 • File paper format and furnish XBRL format statements. • Companies create customized taxonomies to enable the XBRL filing to parallel the paper format filing as closely as possible. • MD&A, notes, and accountant’s report are optional. • The main purpose of the VFP • Encourage companies to experiment with and learn from the process of creating XBRL filings to parallel their traditional 10-Q and 10-K filings. • Assist the SEC in assessing the feasibility of XBRL as a potential filing format on EDGAR in the future.

32. IMPACT ON INVESTORS • Ability to view selected financial information • View information in either tabular or graphic format • Analyze financial information between periods or across companies without re-keying financial information • Value added to tagging process

33. CONCLUSIONS • XBRL mandate will impact preparers, auditors and investors. • Many unresolved issues exist today. • Need for more XBRL knowledge.