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Consolidation and Entity Mapping: New XBRL Solutions

Consolidation and Entity Mapping: New XBRL Solutions. David vun Kannon KPMG LLP. The Internal Reporting Challenge. Reporting starts at the transactional level Many non-financial measures to be reported Financial consolidation is known to be Time consuming Error prone Not well automated

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Consolidation and Entity Mapping: New XBRL Solutions

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  1. Consolidation and Entity Mapping: New XBRL Solutions David vun Kannon KPMG LLP

  2. The Internal Reporting Challenge • Reporting starts at the transactional level • Many non-financial measures to be reported • Financial consolidation is known to be • Time consuming • Error prone • Not well automated • Costly

  3. Consolidation, the textbook way • Algebraic addition across a worksheet Entity 1 Entity 2 Eliminations Consolidated Entity - = +

  4. Consolidation, the XBRL way • Algebraic addition via calculation linkbase Instance Document Entity 1 Data Entity 1 Context Entity 2 Data Entity 2 Context Eliminations Data Eliminations Context Entity Map (Taxonomy) Instance document Entity Schema Entity 1 Entity 2 EliminationsE1E2 ConsolidatedEntity Consolidated Data Consolidated Context XBRL Processor + Con - + + E1 Elim E2

  5. What are Entity Maps??? • Using the established technology of taxonomies • Schema • Linkbases • Applied to a different dimension • The Entity dimension • Not the Concept dimension

  6. The Concept Dimension? • Facts (items in an XBRL instance) have • Dimensions (with examples) • Concept – Current Assets • Entity – White Satin plc • Period - 20021231 • Scenario - Actual • Unit – US Dollars • Attributes (with examples) • Precision or Decimal - 18

  7. Documenting a Dimension • What names exist in a dimension? • Assets, Liabilities, Equity, etc. • How are they related to one another? • XBRL can document multiple relationships. • How do they relate to other objects? • Especially real-world objects.

  8. Dimension Documentation in XBRL • Names are defined using XML Schema files. • Linkbases define • Inter-relationships • Definition, calculation, presentation • Resource relationships • Label, reference

  9. XBRL 2.1 • The Concept dimension is defined by the DTS (Discoverable Taxonomy Set). • Each instance document has its own construction of the Concept dimension.

  10. Important Point! • The taxonomy (schema + linkbase) technology, which was originally developed in XBRL to document the Concept dimension, can be used to document ANY XBRL dimension. • Using appropriate new roles and arcroles, etc. • Thank you, Walter Hamscher!

  11. Entity Schemas • As in Concept Schema, define names, IDs and other attributes using XML Schema. • <element name=“entity1” id=“entity1” type=“new:entityType” />

  12. xbrlDimension attribute • To distinguish a schema of concept elements from a schema of entity elements, we propose a new attribute. <schema new:xbrlDimension=“entity” … > • Value could be concept, entity, unit, scenario, maybe even period. • NB: attribute is on the schema, not each element • (could also appear on linkbaseRef…)

  13. But entity in context is different! • We need to relate these abstract entity elements with the entity part of a context. • In an instance document, the entity part of the context uses real-world identifiers, such as DUNS number, ticker symbol, CIK. • Use a resource-type (label, reference) linkbase to make the association between abstract elements and real world identifiers.

  14. Worked Example • Next slide shows a small but complete Identity linkbase. • One abstract element is linked to two real world identifiers • D-U-N-S number • CIK (Central Index Key) used by SEC.

  15. <referenceLink xlink:type="extended" xlink:role="http://www.kpmg.com/identity"> <!-- references goes here. --> <reference xlink:type="resource" xlink:role="http://www.kpmg.com/entity" xlink:label="DUNS"> <xbrli:entity scheme="http://www.dnb.com/D-U-N-S"> <identifier>123456789</identifier> </xbrli:entity> </reference> <reference xlink:type="resource" xlink:role="http://www.kpmg.com/entity" xlink:label="CIK"> <xbrli:entity scheme="http://www.sec.gov/CIK"> <identifier>6643567</identifier> </xbrli:entity> </reference> <!-- locator goes here. --> <loc xlink:type="locator" xlink:href="WhiteSatin.xsd#parent" xlink:label="parent"/> <!-- arc goes here. --> <referenceArc xlink:type="arc" xlink:from="parent" xlink:to="DUNS" xlink:arcrole="http://www.kpmg.com/arc/element-identity"/> <referenceArc xlink:type="arc" xlink:from="parent" xlink:to="CIK" xlink:arcrole="http://www.kpmg.com/arc/element-identity"/> </referenceLink>

  16. In Detail (1) <referenceLink xlink:type="extended“ xlink:role="http://www.kpmg.com/identity"> • A standard XBRL reference link. • A new role • http://www.kpmg.com/identity

  17. In Detail (2) <reference xlink:type="resource" xlink:role="http://www.kpmg.com/entity" xlink:label="DUNS"> • A standard XBRL reference resource • A new role • http://www.kpmg.com/entity • Bending the rules of reference resources a little bit…

  18. In Detail (3) <referenceArc xlink:type="arc" xlink:from="parent" xlink:to="DUNS" xlink:arcrole= “http://www.kpmg.com/arc/element-identity” /> • A standard XBRL reference arc • A new arcrole • http://www.kpmg.com/arc/element-identity

  19. Benefits of Identity Linkbase • Enables many-to-one mapping of various real world identifiers to a single abstract identifier. • All other linkbases only need to point to the abstract element, greatly simplifying construction and maintenance. • Some entities (such as Eliminations) may not have any real world identifier, but are still very useful for other purposes. • Created by an entity mainly for internal use.

  20. Entity Calculation Linkbase • Use CL exactly the same as CL for Concepts! • Defines which values to aggregate • Relates the abstract entities to each other • Subsidiary entities have weight=“1” • Correspond to real world business units • Elimination entity has weight=“-1” • “Virtual” unit created to avoid double counting

  21. Other Entity Linkbases • Document various relationships that entities can have with other entities. • Legal ownership • Management control • Org chart • Use definition linkbase with appropriate roles and arcroles. • Presentation linkbase will also be useful. • Can even cross dimensions!

  22. Use of standard XBRL ideas • Resource-type linkbases relate objects (chunks of metadata) to abstract elements • NB: Don’t try to store instance data in a resource linkbase! • Relation-type linkbases relate abstract elements to each other. • Everything we have learned in the Concept dimension can be leveraged in the Entity dimension. • And we can always learn new tricks also!

  23. How to use the CL? • We want to do more with the CL than just create documentation. • It can drive consolidation processing. • But current CL processing only works on the Concept dimension, which has a special place in the instance. + XBRL Processor

  24. XBRL 1.0 • Item has several dimensions • Concept • Entity • Unit • Period <item type=“us:currentAssets” …> All dimensions were represented in the same way

  25. XBRL 2.x • Item has the same dimensions BUT… <us:currentAssets …> The concept dimension has a special place.

  26. One approach • Reuse a Concept dimension CL processor • Ensure periods are aligned. • And other sanity checks • Map entities to abstract entities. • “Pivot” the instance document to exchange the Concept and Entity dimensions. • Process as previously. • Pivot back to obtain the final instance document. • Remap to a real world identifier.

  27. Pivot??? • 2 entities, 5 concepts = 10 facts <my:concept1 context=“entity1” … > Becomes <the:entity1 context=“concept1” … > Now 5 contexts, before there were two.

  28. Suggestion • If you don’t have a working CL processor, treat the preceding slides as a nasty hack, rather than a preferred implementation strategy. • As a result of the pivoting (and the mapping) the document is no longer a valid XBRL 2.1 instance, but a CL processor should still be able to use it. • The XBRL Infoset is still the same • The final instance IS VALID XBRL!!!

  29. Consolidation in XBRL • Incrementally extend and leverage standard XBRL taxonomy ideas for entity maps. • Use standard XBRL instance documents that many systems will be able to export. • Consolidation process is now: • Automatic • Under control of metadata • Much easier to document/audit!

  30. Still to come… • Creating the Eliminations entity data • Show that XBRL GL journals can be summarized into the trial balance and filtered to produce the eliminations. • Non-additive measures • We need a Formula Linkbase to create these.

  31. If we can do… Parent = North + South + East + West - Eliminations Then we should be able to do FY-03 = FQ1 + FQ2 + FQ3 + FQ4 - Adjustments Still to come…

  32. If we can do… Parent = North + South + East + West - Eliminations Then we should be able to do Variance = Budgeted - Actual Still to come…

  33. Thank you! David vun Kannon Senior Manager, KPMG LLP dvunkannon@kpmg.com

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