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Receiving and processing XBRL

Receiving and processing XBRL. Paul Snijders CEO Semansys Technologies Board member XBRL Nederland Founding member XBRL in Europe. What we will cover. What to expect from receiving and processing XBRL The basic process Flexibility in process organization Minimizing effort and costs

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Receiving and processing XBRL

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  1. XBRL

  2. Receiving and processing XBRL Paul Snijders CEO Semansys Technologies Board member XBRL Nederland Founding member XBRL in Europe XBRL

  3. What we will cover • What to expect from receiving and processing XBRL • The basic process • Flexibility in process organization • Minimizing effort and costs • Integration in current systems XBRL

  4. Target group • XBRL is implemented by regulators • A multitude of entities will produce XBRL output Annual reports, credit reports, statistics, general ledger, business information • Regulators can use XBRL to automate processes • Many other consumers of financial data can benefit from automated receiving and processing of XBRL • Banks • Venture funds • Investment companies • Corporates (internal reporting) • M&A officers • Corporate finance (bench marking) • Businesses (peer group comparison, competitor analysis) XBRL

  5. What do we want • Secure transmission and filings • Process technically valid instances • Instance quality control andcompliance rules • Automated processes • Storage and archiving XBRL

  6. Current reporting practice • 70 % of reporting in corps. is manual • A large German Bank processes 200.000statements a year • A US Bank can use only 15 data items for risk assessment • A Dutch bank can save 30-40M euro by preventing rekeying SME’s financial statements • The data filing processing of a regulator can save 50 percent labor costs with XBRL based filings • Less than 10 % of spreadsheets have test procedures, 47% have significant errors XBRL

  7. Accountingrules Regulator Taxonomy creation Companies Validation Mapping Taxonomy Reporting Validation XBRLReport Validation Area of interest Store Analysis The basic processwith XBRL • Regulator presents the taxonomy • You map it to your applications (COA) • Validate the results • Send to the regulator • Receiving and processing XBRL

  8. The requirements • Reception functionalities • XBRL & XML processing • Technical validation • XBRL best practices checks (FRTA-FRIS) • Additional compliance rules • Specific processes • Data base storage XBRL

  9. The business case • Current collection and processing practices: • Manual entry and processing is labor intensive and costly • Manual process can be error prone and can limit quality and reliability • Current process can be time consuming and cause to much delay in processes • Automated Integrator processes • Hides the complexity of XBRL • Efficient collection and processing • Cost reduction, no manual process • High quality • Automated process, early warning system • Integration in current systems XBRL

  10. XBRLReport Existence rules Compliance rules Conditional rules Data quality Database Management Taxonomies Ext. tax’s XBRL data Rules Process Info Logging • Signature • Authentication • Decryption Web Validation Compliance XBRLReport • XML Validation • XBRL Validation • FRTA Validation • FRIS Validation Firewall Mail DB XBRLReport Storage Reception FTP XBRLReport Components XBRL

  11. DO NOTHING • Any XBRL document • File/syntax correctness • XBRL 2.1 valid • Process good formatted XBRL Level 1 XML-XBRL • Well formatted XBRL • Reduce file errors • Ensure good quality XBRL • Keep databases clean Level 2 FTRA-FRIS • Compliance monitoring • Data content quality control • Prevent Database pollution Level 3 Compliance • Match internal system’s criteria • Exception handling • Early warning systems Level 4 Business rules Level 0 Level of validation needs • XBRL from trusted providers • Indirect • No need to • No regulatory role XBRL

  12. Bus. Rules Compliance Completeness FRTA-FRIS XBRL XML No validation Level of validation High Need for validation depends on the use Low Normaluse Technical quality Acceptable data Reliable data Full Compliance XBRL

  13. Technical validation • XML Validation • XML Correctness, • Correct schema/namespace references • XBRL Validation • XBRL 2.1 compliant • FRIS Compliance • Check on nillable, element-requires, • XBRL Calculation • Instance values match XBRL calculations • Taxonomy Validation: (extension taxonomy) • FRTA Compliance • Logical judgment of extension taxonomies • Is non core taxonomy data allowed? • Can we accept custom taxonomies? • Does a extension taxonomy have to be FRTA compliant? • Do we store extension taxonomy instances in the data base? XBRL

  14. Compliance checking • Compliance rules describe the rules for the content of XBRL data to ensure high quality data. • Specific compliance rules per regulator • Make compliance rules public • Allows preparers to validate instance at the source • Based on XBRL formulas • Share compliance rules with other regulators • Rules to describe the expected XBRL items (cells) of instances • Rules describe the expected values of XBRL items (cells) of instances XBRL

  15. Existence rules • Two types of compliance rules • Existence rules and Content rules • Existence rules • Simple • Element A MUST exist • Element B CAN NOT exist • Conditional Existence rules • If Element A exists than Element B MUST exist • If Element B does NOT exist than Element C MUST exist • Context related existence rules • Element C MUST exist in Context 1 • Element D CANNOT exist in Context 2 • Context related conditional existence rules • If Element F exists in Context 1 than Element G MUST exist in Context 2 • If Element H does NOT exist in Context 1 than Element X MUST exist in Context 2 XBRL

  16. Content related rules • Content related • Simple rules • Value must be (equal, less than, greater than, between) a certain value • Calculated rules • Element A MUST be (EQ, LT, GT, Between ) constant value XXX • Element B (+-/*) Element C MUST be …… • Conditional Calculated rules • If Element D = X than (+-/*) element E CAN NOT be Y • examples: • Balance sheet must be in balance   • If there is loan in the beginning balance than there must be interest paid at the end balance • Interest paid at end balance can NOT be greater than 10 percent of loan at beginning balance XBRL

  17. Compliance Control Efficiency Reporting requirements Management& Control Streamline Processes • Full XBRL Compliance • Regulatory compliance rules • Data quality control • Single point of control • Coordinated control • Chance management • Object driven, versioning and audit • Automation • Customizable • Reduced development efforts • Integration with legacy systems Call for managed solution XBRL

  18. IFRS/GAAP AccountingRules Regulatory reporting Compliancerules External Requirement XBRL data Instances Reporting Dimensions Reporting entities Reception Custom Database ExtensionTaxonomies Customization Security Monitoring Logging Process management Architecture Processing Receiving Compliance rules Validation Storage Archive XBRL

  19. The case Strategy The gains The business case • Manual receiving processes are costly, error prone and time consuming • Regulatory flexibility depend on adaptability and swiftness of the data collection processes • Automate as many as possible processes is the sure way to sustain efficient implementation and compliance • Interactive data is an important instrument in bringing more transparency in the financial market. • Over the long run, processes that run on inherently more controllable IT systems instead of manual process can save the organization considerable time and money in the regulatory process as well as in executing day-to-day business XBRL

  20. XBRL processing implementation • Reporting components to consider • Public taxonomies (corporate, local) • Company requirements • Dimensions (granularity) • Compliance rules • Legacy systems (charts of accounts) • Mapping • Centralize configuration & management • Individual processes • Automated processes XBRL

  21. Compliance rules XBRL processing Database mapping XML/XBRL validation Business rules manager FRTA-FRIS validation Database management Taxonomy Processing Firewall XBRLReport XBRLReport XBRLReport XBRLReport The Integrator architecture Taxonomy Web Mail FTP Services XBRL Services XBRL Staging Data base XBRL Data Taxonomies Dimensions Entities XBRL data Status Stored Procedures XBRLReport Process Mgnt Custom Database Update Manager Advanced Scripting Custom Database Company Data Compliance rules Regulator Banks Risk mngt. Analysis DWH Processing Services Repository Process data Business rules Log/Stats XBRL

  22. Requirements met XBRL

  23. Audit & Control Compliance • Taxonomy based Compliance reporting • Improved data quality System Integration Completeness Accuracy • Sarbanes Oxley • Section 302 • Reliability of • Internal financial reporting Integrator a regulatory solution XBRL

  24. paul.snijders@semansys.com XBRL

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