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I N K O S D A Q

K O S D A Q S t o c k M a r k e t I n c . Nov. 4, 2 0 0 3. 8 th XBRL International Conference (Seattle, WA). X B R L P I L O T P R O J E C T. I N K O S D A Q. 8 th XBRL International Conference. I : KOSDAQ. XBRL PILOT PROJECT.

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I N K O S D A Q

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  1. K O S D A Q S t o c k M a r k e t I n c . Nov. 4, 2 0 0 3 8th XBRL International Conference (Seattle, WA) X B R L P I L O T P R O J E C T I N K O S D A Q

  2. 8th XBRL International Conference I : KOSDAQ XBRL PILOT PROJECT 01. Introduction 02. Comparison Among Asia’s New Markets 03. Global Status I N K O S D A Q II : XBRL Pilot Project 01. Introduction 02. Taxonomy for Korean Companies 03. Transformation of SGML filings to XBRL 04. Web & Excel-based Analysis Tools using XBRL 05. What XBRL offers III : Assignments

  3. I : KOSDAQ 01. Introduction • Provides an investor-friendly environment providing capital for SMEs • and IT venture businesses, serving as the marketplace • for new and diverse opportunities. • Referred to as the “Nasdaq of Asia” • 100% fully automated trading system • Top of the world in On-line Trading • WWW.KOSDAQ.COM

  4. I : KOSDAQ 02.Comparison Among Asia’s New Markets Daily Trading Value(US$ mil.) ( End of November 2002 ) Note: (1) Japan (2) Taiwan (3) Singapore (4) Hong Kong

  5. I : KOSDAQ 03.Global Status (US$ bil.) * WFE Sep. 2003(companies), July.2003 (Trading Val, Market Cap)

  6. II: XBRL Pilot Project 01.Introduction Contractor : Samil (PwC), UB Matrix Korea (UB Matrix USA) PROJECT OVERVIEW • Personnel : Accounting Consultants (Local : 5 , Foreign : 1) • Engineer (Local : 3, Foreign : 5) • Software : Taxonomy Builder, Universal Studio, Web Analyzer • (UB Provided), Oracle, JSP, Excel • Period : July 28th ~ Nov. 10th 2003 (15 weeks) • - Samples : 15companies (5-year Financial Statements) Outcome :XBRL Products • - Commercial & Industrial Korean GAAP(K-GAAP) Taxonomy Establishment • Web and Excel-based Investor Analysis Tool • Technical Experiment on the Internet

  7. KOSDAQ -PwC -UB Matrix Fast & Enhanced Financial Statements & Analysis Tools Standardized Financial Statements Simpler Process Investor Trust COMPANIES INVESTORS Investment II: XBRL Pilot Project 01.Introduction Nasdaq launched XBRL Pilot Project in 2001 BACK- GROUND - In Korea, FSS, KSE, KOSDAQ have established SGML-based E-disclosure Infrastructure (DART in Korea, EDGAR in USA) for Financial Reporting since 1999 Benefits to KOSDAQ’ & Listed companies - Establish on Standardized Financial Statements with simpler process for listed companies  Increase Market Transparency - Provide fast and enhanced financial statements and empowered analysis tool for investors around the world  Increase Equity funding with Investors Trust

  8. II: XBRL Pilot Project 01.Introduction Establish K-GAAP Taxonomy GOAL - Approval from XBRL International- XBRL adoption around Korean Companies in Financial Reporting Increasing Market Transparency - Provide standard Financial Statements through XBRL - Empower investors by providing analysis tools Frontier in XBRL Technology in Korea - Kosdaq is the first organization to recognize the value of XBRL

  9. II: XBRL Pilot Project 01.Introduction PROCESS Samil (PwC) UBMatrix (UBMatrix USA) 1. Define & Establish Korean GAAP Taxonomy 2. Provide Taxonomy Builder Tool 4. Confirm XBRL Instance Outcome 3. Establish & Validate XBRL Instance (Korean/English) <VALIDATION FROM THE PROJECT> - EDGAR Analyst Financial Standards Review - Validation of extracted Financial Information - Business Evaluation Model of SMEs 5. Save in Document Repository 6. Apply EDGAR Analyst analysis Program to the WEB 7. Develop Excel Analytics & Apply to the WEB 8. Hold related Seminars 10. PR to foreign securities houses & Investment Companies 9. Apply outcomes to EDGAR Analyst Project Review & Follow-up Planning

  10. E-disclosure System Standardized Financial reporting system using E-disclosure (based on SGML) FSS KOSDAQ(KSE) via Internet II: XBRL Pilot Project 02.Taxonomyfor Korean Companies APPROACH SGML Based Financial Statements ListedCOMPANIES INVESTORS * Financial Statements of FSS - Besides Standard Accounts, FSS includes Accounting Practices (approx. 3,000 accounts) - Industry (Finance, Non-Finance) APPROACH K-GAAP TAXONOMY INDUSTRY EXTENSION OF K-GAAP TAXONOMY

  11. II: XBRL Pilot Project 02.Taxonomyfor Korean Companies Issues and Considerations APPROACH How to approach building K-GAAP Taxonomy in line with Global Financial Statements? TAXONOMYARCHITECTURE?? 1. US GAAP, IAS (FSS) 2. FSS (US GAAP, IAS) REFER TO FSS (*2) * Dr. Walter Hamsher’s Suggestion- Accounts Hierarchy from FSS - Label, References from US GAAP, IAS APPROACH K-GAAP TAXONOMY INDUSTRY EXTENSION OF K-GAAP TAXONOMY

  12. Phase 3. Company Extension – Naming and defining up to the level of Individual Company’s User defined Accounts(excluded in FSS Accounts Schema) II: XBRL Pilot Project 02. Taxonomyfor Korean Companies 3Phases APPROACH Phase 1. K-GAAP Taxonomy (Korean Standards) • K-GAAP Taxonomy Definition/Establishment based on • Korean Companies Accounting Principles Phase 2. Extended FSS Taxonomy (Commercial & Industrial) – In actual industry accounting practices -over 3,000acccounts were used, FSS element Extension APPROACH K-GAAP TAXONOMY EXTENDED FSS TAXONOMY * In general, individual companies expand and apply lower level accounts when standard Taxonomy is defined, however, in Korea FSS account schema has already included the level of industry.

  13. II: XBRL Pilot Project 02.Taxonomyfor Korean Companies Framework K-GAAP TAXONOMY 01 Chart of Accounts 02 Notes 03 GAAP References for Korean Standards APPROACH K-GAAP TAXONOMY EXTENDED FSS TAXONOMY - Chart of Accounts - Notes - GAAP References NEXT >

  14. II: XBRL Pilot Project 02.Taxonomyfor Korean Companies 01 Chart of Accounts K-GAAP TAXONOMY Accounting Review Technical Review for Korean Standards Standardized Accounting StructureGuided by Korean Companies Accounting Principles XBRL adoption skill in accordance with international standardized accounting principles • Korean Companies Accounting Principles • - Refer to IAS, US GAAP • XBRL Specification • & Taxonomy Builder Skill • IAS, US GAAP Taxonomy Schema & Structure • - Consideration with FRTA Label, Description Element, Attributes APPROACH K-GAAP TAXONOMY EXTENDED FSS TAXONOMY CoA including Commercial & Industrial in accordance with Korean Companies Accounting Principles with the consideration of International Standards. - Chart of Accounts - Notes - GAAP References • Chart : B/S, I/S, R/E, C/F (approx. 870accounts) BACK <

  15. II: XBRL Pilot Project 02.Taxonomyfor Korean Companies 01 Chart of Accounts K-GAAP TAXONOMY for Korean Standards APPROACH K-GAAP TAXONOMY EXTENDED FSS TAXONOMY - Chart of Accounts - Notes - GAAP References BACK <

  16. II: XBRL Pilot Project 02.Taxonomyfor Korean Companies 02 Notes K-GAAP TAXONOMY for Korean Standards Reliance Actual Best Practice from Accounting Firms Financial Reports fromKOSDAQ Listed Companies Guidelines from KASB Notes Standardization for K-GAAP Taxonomy - 121 type notes (Quantity & Variety) * 3,000 notes (in general) cannot be completed in this pilot project(3 mo.’s) and should be continued… * Notes standardization has encountered unexpected problems (Various table formats in Korean Notes) APPROACH K-GAAP TAXONOMY EXTENDED FSS TAXONOMY - Chart of Accounts - Notes - GAAP References BACK <

  17. II: XBRL Pilot Project 02.Taxonomyfor Korean Companies 02 Notes K-GAAP TAXONOMY for Korean Standards APPROACH K-GAAP TAXONOMY EXTENDED FSS TAXONOMY - Chart of Accounts - Notes - GAAP References BACK <

  18. II: XBRL Pilot Project 02.Taxonomyfor Korean Companies 03 GAAP References K-GAAP TAXONOMY for Korean Standards K-GAAP references which had similar rules with IAS, US GAAP were reviewed and referenced. * Rule : statements, opinions, etc. • K-GAAP Reference based on Standards from KASB. • IAS References based on standards from IASB. • - US GAAP References based on standards from FASB. APPROACH K-GAAP TAXONOMY EXTENDED FSS TAXONOMY - Chart of Accounts - Notes - GAAP References BACK <

  19. II: XBRL Pilot Project 02.Taxonomyfor Korean Companies 03 GAAP References K-GAAP TAXONOMY for Korean Standards APPROACH K-GAAP TAXONOMY EXTENDED FSS TAXONOMY - Chart of Accounts - Notes - GAAP References BACK <

  20. II: XBRL Pilot Project 02.Taxonomyfor Korean Companies Extension for FSS Industry Practice EXTENDED FSS TAXONOMY • K-GAAP Taxonomy must be extended up to the level of FSS to • connect between K-GAAP Taxonomy and Existing FSS E-disclosure • Financial Accounting Structure. • General Schema was adopted from K-GAAP, however, in the • extended Taxonomy there was some complications (see below*). • * FSS includes Similar accounts and it can be matched more than • one account in the translation of Korean • * Element posting in Taxonomy Builder accepted English only. • * Similar accounts : • - Accounts which has same meaning with two different names • - Accounts with similar meanings with different names APPROACH K-GAAP TAXONOMY EXTENDED FSS TAXONOMY

  21. II: XBRL Pilot Project 02.Taxonomyfor Korean Companies Extension for FSS Industry practice EXTEDED FSS TAXONOMY APPROACH K-GAAP TAXONOMY EXTENDED FSS TAXONOMY

  22. K-GAAP TaxonomyKorean Standard Extended FSS Taxonomy (name) Inherited schema Mapping Table II: XBRL Pilot Project 03.Transformation of SGML filing to XBRL MAPPING TABLE Use Mapping Table to Transform SGML Filing into XBRL Instance To transform SGML filing into XBRL instance Financial Reports(SGML) XBRL Instance

  23. II: XBRL Pilot Project 03.Transformation of SGML filing to XBRL MAPPING TABLE Mapping Table for Transformation To transform SGML filing into XBRL instance

  24. II: XBRL Pilot Project 04.Web & Excel-based Analysis Tools using XBRL Web View & Excel SYSTEM ARCHI-TECTURE

  25. II: XBRL Pilot Project 04.Web & Excel-based Analysis Tools using XBRL Technical Experiments SYSTEM ARCHI-TECTURE

  26. Ratio & Financial Statements Analysis Analysis Methods (Web & Excel) - Growth(9 ratios) Profitability(19 ratios) Stability(17 ratios) Turnover(8 ratios) Cash Flow(6 ratios) Others(10 ratios) - B/S, I/S, C/F, R/E - Summary of Single company - Comparison ( Multi-Company One Period, Company-Industry One period, Single-Company Multi Period ) in Financial, Ratio II: XBRL Pilot Project 04.Web & Excel-based Analysis Tools using XBRL ANALYSIS FUNCTION Web Viewer, EXCEL, Technical Experiments -- Video Clip (MPEG file) SCREEN SHOTS

  27. II: XBRL Pilot Project 05. What XBRL Offers SCREEN SHOT 05-1 Change of Exchange Reporting Objectives (SGML -> XBRL)05-2 Accounting Global Standards Based on XBRL05-3 Financial Reporting Process in EXCEL05-4 Enhancement in Financial Reporting 05-5 Change in Information Analysis (WEB) 05-6 Change in Information Analysis (EXCEL)05-7 Change in Information Analysis 05-8 Change in Information Logistics

  28. 05-1 Change of Exchange Reporting Objectives (SGML -> XBRL) SGML XBRL Accept Global Standard(Global Communication)

  29. 05-2 Accounting Global Standards Based on XBRL SGML / DTD XBRL / TAXONOMY Recognition of Financial Statements &Easiness of Sharing Information Logical AccountsSchema Logical CofA Reference, Presentation, Calculation, Label, Definition

  30. 05- 3 Financial Reporting Process in EXCEL SGML(restricted,closed) XBRL(open,Common) Easy to prepare Fin’l Statements

  31. 05- 4 Enhancement in Financial Reporting BEFORE AFTER Financial System Financial ReportingPrint Out FinancialSystem Financial ReportingPrint out SupervisoryOrg. Report • Reduce Time • & Costs • Reduce Errors • in re-input • Compatible • with any S/W SupervisoryOrg. Report XBRL OutsideDisclosure Documents CompanyWebsite OutsideDisclosureDocuments CompanyWebsite IRS Report IRS Report Other 3rd Party Documents Audit Report Other 3rd Party Documents Audit Report

  32. 05- 5 Change in Information Analysis (WEB) BEFORE AFTER -Visual Analysis -Comparison with Companies -Time Series Comparison-Industry vs. Industry (Excel Download)

  33. 05- 6 Change in Information Analysis (Excel) BEFORE AFTER Office 2004 embedded in XML Functions

  34. 05- 7 Change in Information Analysis

  35. 05- 8 Change in Information Logistics BEFORE AFTER COMPANY COMPANY • BETTER • FASTER • CHEAPER • Information Vendors • Enhanced Information INVESTORS (Web, Excel) INVESTORS

  36. III:ASSIGNMENTS XBRL International Approval on K-GAAP Taxonomy • Join XBRL Korea Jurisdiction (2003.9.29) • - Submit K-GAAP Taxonomy Draft to XBRL Korea Jurisdiction (2003.10.21) • - As a member of XBRL Korea Jurisdiction, attain XBRL International • approval on K-GAAP Taxonomy (ongoing) • - Co-work with FSS, KSE for Korea Standardization in Working Group • - Announce K-GAAP Taxonomy as Standard Financial Reporting for • Korean Companies with the aid of FSS, KSE & KASB • - Co-operation with FSS to improve E-disclosure infrastructure • from existing SGML to XBRL and XML.

  37. III:ASSIGNMENTS NEXT STEP… • Invite XBRL experts and hold domestic seminars to publicize • Kosdaq Pilot Project (in 2003)- Presentation of Pilot project during Overseas IR roadshow with • KOSDAQ Listed Companies to attract foreign investors - Maintain & Expand XBRL information from 15 to 30 companies • * Project consistency with real-time update of financial information KOSDAQ will be the Eternal Pioneer in XBRL

  38. 8th XBRL International Conference (Seattle, WA) X B R L P I L O T P R O J E C T K O S D A Q S t o c k M a r k e t I n c . N O V 4 , 2 0 0 3 I N K O S D A Q ::thank you

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