XBRL and Stock Exchanges: The benefits of IFRS web-based reporting

1. XBRL and Stock Exchanges: The benefits of IFRS web-based reporting

2. Presenters: • Kurt Ramin • IASC Foundation, Commercial Director • Chair of XBRL International • kramin@iasb.org.uk Josef Macdonald IASC Foundation, XBRL Practice Fellow Vice Chair of Domain Working Group, XBRL International jmacdonald@iasb.org.uk

3. This Session: • Why IFRS? • About this Study • Benefits • Observations • Conclusions

4. Who are we? The IASC Foundation Trustees (19) Trustees (19) Trustees (19) SAC (52) Board (14) Steering Committees & Other Advisors IFRIC (12) Staff

5. Why IFRS and Stock Exchanges? • IFRS roll out – Europe, Asia/Pacific, etc • An XBRL thought leader • Encourage SXs to consider XBRL and IFRS • Transparency and Comparability …

6. IFRS concerned with: • Increase transparency • Improve comparability • Increase quality • Facilitate maintenance • Increase speed to produce financial statements IASC Foundation XBRL Mission Statement The IASC Foundation XBRL Working Group is committed to developing, in the public interest, a standardised set of high quality, understandable and interoperable electronic global taxonomies that facilitate the mediation of transparent and comparable information in general purpose, web based, financial statements. In addition, the IASC Foundation XBRL Working Group cooperates with XBRL International and other electronic standard setters to achieve interoperability in electronic standards around the world. IASB Mission Statement The Board is committed to developing, in the public interest, a single set of high quality, understandable and enforceable global accounting standards that require transparent and comparable information in general purpose financial statements. In addition, the Board cooperates with national accounting standard setters to achieve convergence in accounting standards around the world.

7. IFRS Around the World:

8. Global Standards "This underscores another significant step in our partnership with national standard setters to reach a truly global set of accounting standards. While we recognize that there are many challenges ahead, I am extremely confident now that we can eliminate major differences between national and international standards, and by drawing on the best of U.S. GAAP, IFRSs and other national standards, the world’s capital markets will have a set of global accounting standards that investors can trust.“(emphasis added) Hailing the agreement reached between FASB and IASB, quote by Sir David Tweedie

9. Global Support "Another good example of a specific XML schema is this XBRL, eXtensible Business Reporting Language…This one is pretty exciting in that companies that in the past would have posted financial data, say, as just a Web page you could go read, now we'll put it in a structured XML form" Great Plains Convergence, Remarks by Bill Gates

10. Benefits of XBRL • Better: More Effective Use • Improved quality and accuracy • Improved operating efficiency and effectiveness • Improved comparability • Improved navigation • Improved accessibility • Faster: More Quickly and More Often • Decisions are acted upon more quickly • Disclosures can be prepared and updated more quickly • Efforts to comprehend and analyse data are reduced • Cheaper: Less Resources Required • Less effort to prepare and use filings • Software independent • Data reuse – no rekeying!

11. What? FRTA, Taxonomies, etc

12. This Session: • Why IFRS? • About this Study • Benefits • Observations • Conclusions

13. Phased Study/Project: • Phase I • Interview 5-10 exchanges • Draft Synopses • Phase II • Whitepaper • Case Studies • FAQ

15. Phased Study/Project: • Phase III • Review phase I • Interview at least 5 more exchanges • Re-interview first phase exchanges • Consider adding SX Academic Study • Finalise White paper, Case Studies and FAQ • Phase IV • Develop website • Phase V • Build demo/prototype

16. Countries Approached:

17. Countries to be approached ? ? ?

18. This Session: • Why IFRS? • About this Study • Benefits • Observations • Conclusions

19. Stock Exchanges? • Current State: • Too much data rekeying • Emphasis on format – paper based systems • Risks from errors • Collection, processing and distribution inefficient • Benefits • Seamless flow of data • Filtered data • Validation • Create enhanced/new revenue opportunities • SX saves time and resources

20. Michael Sanderson, CEO, NASDAQ Europe “NASDAQ joins shoulder to shoulder in the effort of the XBRL Consortium to adopt this new, freely available technology because it feels that improving the distribution and analysis of corporate results, especially for the 10,000 companies not covered by Wall Street analysts will broaden the market for NASDAQ’s own trading services”

21. Brokers/Analysts • Current State: • Data collection and extraction process difficult • Analysis difficulties • Information available has been scaled back • Benefits • Access the information they want to see • Easier access • Automatically identify and then process data

22. Alfred R. Berkeley III - Vice Chairman of NASDAQ "XBRL will promote the democratization of financial data -- making it equally available to everyone. Instead of people spending, say, 10 hours to re-key data and one hour to analyze it, they can spend five minutes getting the data ready and spend one, two, three or more hours to analyze it, as they prefer, and get more and better analysis in less time than it took before."

23. Investors • Current State: • Data collection and extraction process difficult • Analysis difficulties • Information available has been scaled back • Benefits • Access the information they want to see • Easier access • Automatically identify and then process data

24. John Connors, Chief Financial Officer, Microsoft "Through Internet delivery, XBRL will also provide analysts and investors with extensible financial data to make informed decisions about the company. We see XBRL as not only the future standard for publishing, delivery and use of financial information over the Web, but also as a logical business choice."

25. Other Regulators • Current State: • Data collection process duplicated • Little or no communication between regulators • Onerous • Benefits • Decrease compliance burden • Create once, use many times • Efficient

26. Financial Statements Investors & Creditors Regulatory Filings XBRL XBRL Credit Reporting Government Tax Filings Other Parties Bank Filings Other Regulators: Multiple Uses Accounting System(s) Accounting System(s) XBRL Accounting System(s) Other Sources of Information XBRL Other Sources of Information Other Sources of Information

27. Issuers • Current State: • Data collection process difficult • Form filling repetitive • Information available has been scaled back • Benefits • Reuse data • Faster • Less onerous

28. This Session: • Why IFRS? • About this Study • Benefits • Observations • Conclusions

29. This Session: • Why IFRS? • About this Study • Benefits • Observations • Conclusions

30. 10 Best Practice Tips! 10. Assess your readiness 9. Ignore Kool-aide drinkers & prognosticators 8. Assess XBRL’s maturity 7. Think carefully about maintenance

31. How Long? Milestones STANDARD SETTING STAGES ANTICIPATED LEVEL OF ADOPTION Wide Usage & Significant Market Benefits Validated GlobalRecognition 2009 ? High – It is a Standard • XBRL Use Grows: • Geographically • By Industries • Types of BR • Maturity of Core Components: • Taxonomies • Software Tools • Impl. Guidance Medium - Best Practice Market Acceptance 2005 – 2008? Low – Industry Leaders & ‘Pockets’ User and Preparer Implementation Guidance is Developed Technology Standard and Base Taxonomies are Developed New & Existing Software is XBRL Enabled Very Low – Innovators Base Development 2001 – 2005 Denotes estimated status of meeting the milestone International Participation and Focus Significant Market Need & Demand Participation of Key Stakeholders Organizational Development & Structure Conceptualisation 1999– 2001 Source:Ernst & Young

32. 10 Best Practice Tips! 10. Assess your readiness 9. Ignore Kool-aide drinkers & prognosticators 8. Assess XBRL’s maturity 7. Think carefully about maintenance 6. Participate in XBRL.org 5. Worry about security … 4. Worry about security some more 3. Review your filing forms first 2. Build a prototype 1. Get buy-in from issuers

33. Presenters: • Kurt Ramin • IASC Foundation, Commercial Director • Chair of XBRL International • kramin@iasb.org.uk Josef Macdonald IASC Foundation, XBRL Practice Fellow Vice Chair of Domain Working Group, XBRL International jmacdonald@iasb.org.uk