Frequently Asked Questions

1. Frequently Asked Questions • Who is using XBRL for what? • What is most urgent for XBRL International? • How will XBRL impact content based businesses? • Why XBRL instead of our own XML Schemas? • What XBRL tools and products are available? • What is XLink and why is XBRL based on it? • When will XBRL become widely used? • Who is behind XBRL… and why? • Is XBRL like FpML (RIXML, MDDL, SomeotherML) • Where can I get a copy of these slides?

2. Frequently Asked Question:Who is using XBRL for what? • B2G - Regulatory Applications • Australian Prudential Regulatory Authority (2001) • US Federal Depository Institution Corp. (2002) • UK Inland Revenue (2003) • B2L – Business to Lenders • Bank of America / Moody’s – Credit Analysis (2003) • Deutsche Bank – same • B2M – Business to Markets • Traditional financial reporting (2002) • Business performance reporting (2003) • Internal applications

3. Frequently Asked Question:What is most urgent for XBRL International? • Taxonomies • Wide coverage • Consistent practices • Reusability • Specifications • Enhanced validation • Richer representations • Move to interoperability • Implementations • Profiles

5. Taxonomy as Dictionary Disclosure Income Expense Result inc exp inx Advertising Marketing Profit Net Interest exp.adv exp.mkt inx.prf inx.int

6. Taxonomy as Classification Disclosure Defined as Income Expense Result Defined as Defined as Advertising Marketing Profit Net Interest

7. Taxonomy as Calculation Disclosure Added into Income Expense Result Subtracted from Added into Added into Advertising Marketing Profit Net Interest Added into

8. Taxonomy as Reusable Building Block Disclosure Added into Income Result Expense Subtracted from Added into Added into Advertising Marketing Profit Net Interest Rebates Added into Website Expenses

9. Insider trades Company Site Custom Taxonomy US Site Taxonomy Element Schema and Definition Linkbase imports Significant events Element Schema and Definition Linkbase Calculation and Other Linkbases Calculation and Other Linkbases Restrictions on redefining links imports Example: XBRL for Web Site Reporting GAAP C&I v2 Taxonomy Element Schema and Definition Linkbase Calculation and Other Linkbases

10. Taxonomy as Collaborative Effort • Agree naming • Agree structure • Agree schedule Disclosure Income Expense Result Advertising Marketing Profit Net Interest

11. XBRL Taxonomies in 2002 • Best practices • e.g. ast.amz.goodwill = Amortization of Goodwill • e.g. Assets have “current” & “non current” children • e.g. Reusable common components taxonomy • Focused development efforts • IAS Taxonomy: Core financials, Core + Notes • US GAAP C&I Taxonomy • UK GAAP C&I Taxonomy • Inland Revenue “Computation” Taxonomy • FDIC Taxonomy (US) • Canadian GAAP, others.

13. Validation • The financial information integration problem • Any (XBRL) application involving data transfer across enterprises must validate incoming data one way or another. • Consumer can validate after the fact, return errors (bad) • Producer can validate before submitting (good) • Common solutions and their consequences • Custom code, database constraints • XML Schema validation • Computation linkbases • Like XML Schema – used in many programming environments • Native to XBRL and works well for financial computations • Do this the way other standards bodies would

14. XBRL Taxonomy Calculation and Other Linkbases Element Schema Imports Imports Schema Validation Form AA Schema Schedule BB Schema “Include only directors’ comp” Schema Validation Schema Validation CalculationArc cwa Validation Form BB Filing Validating XBRL today Current assets, liabilities, Pretax profit, expenses, Directors compensation… “Include only profit and expenses which must be whole numbers” Form AA Filing

15. Benefit of Upstream Validation: Low Benefit of Upstream Validation: High Validation Levels • Data elements • “Current assets” is represented by uk:ast.cur • Primitive data types • The value of uk:ast.cur must be nine digits and not negative • Compound data structures • A Maturity Breakdown must contain Loans, Securities and Derivatives • Calculated data values • RIAC4410 = RIAC4411 + RIAC4412, plus or minus 1 • Co-Constraints among data values – “Business Rules” • Box27 is True if and only if Box28 is the same as Box29 • Cross-document constraints • If Box28 is larger than any other value ever reported, Var50 is True

16. Computation LinkbasesSample “business rule” Upper tolerance FRB Edit Check 0125 True/false Result Constant Lower tolerance Riad4011-Q1 >= Riad4022-Q2 Formula Constant Variable Outstanding Loans in Q1 Monetary Variable Outstanding Loans in Q2 Monetary

17. Computation Linkbases (Vun Kannon) <element name="FRB-EDCK-0125" type="xbrl:booleanItemType"> <annotation> <documentation> Current quarter value should be greater than or equal to previous quarter's value. </documentation> <appinfo> <xbrl:formula select="(number($riad4011-q1) - $lower_tolerance) >= (number($riad4011-q2) + $upper_tolerance)" xlink:type="resource" xlink:label="RI_FRB-EDCK-0125_fm" xlink:title="RI_FRB-EDCK-0125_fm"> <xbrl:variable name="riad4011-q1" xlink:type="simple" xlink:href="ffiec-031.xsd#riad4011"> <xbrl:precondition name="period" interval="m" value="6 9 12"/> <xbrl:precondition name="period" minimum_value="20010101"/> </xbrl:variable> <xbrl:variable name="riad4011-q2" xlink:type="simple" xlink:href="ffiec-031.xsd#riad4011"> <xbrl:restriction name="period" interval="m" offset="-3"/> </xbrl:variable> <xbrl:constant name="upper_tolerance" value="0"/> <xbrl:constant name="lower_tolerance" value="0"/> <ffiec:edit type="i"/> </xbrl:formula> </appinfo> </annotation> </element>

18. Entity Linkbase proposal • Proposed additional computation / validation requirements: • Ability to define, publish and re-use general financial formulas • Ability to express computational relationships across entities

19. Entity Linkbase proposal • Common need to represent financial relationships among subsidiaries, owned assets, etc. TLA Enron Group (Virtual) St. Advil’s Hospital owns 100% owns 50% owns 100% BFD TBD owns 100% owns 100% Enron Enron JV’s (Virtual) MA_571XVH (Asset)

20. Entity Linkbase proposalSample fragment <ownershipLink> <!-- TLA has two fully owned subsidiaries, TBD and BFD. --> <entity xlink:label="tla" xlink:type="resource" xlink:title="tla“ /> <entity xlink:label="tbd" xlink:type="resource" xlink:title="tbd"/> <entity xlink:label="bfd" xlink:type="resource" xlink:title="bfd"/> <ownershipArc weight="1" from="tla" to="tbd" xlink:type="arc"/> <ownershipArc weight="1" from="tbd" to="tla" xlink:type="arc"/> <ownershipArc weight="1" from="tla" to="bfd" xlink:type="arc"/> <ownershipArc weight="1" from="bfd" to="tla" xlink:type="arc"/> </ownershipLink> TLA owns 100% owns 100% BFD TBD

21. All Owned Entities Corresponding “Flow” type items in corresponding Periods For all Owned Entities Corresponding “Flow”type items in corresponding Periods For all Owned Entities Corresponding “Flow”type items in corresponding Periods Augmented Computation Linkbase:Compact, reusable business rules • TLA Q1 Revenue = TBD Q1 Revenue + BFD Q1 Revenue • HPCQ Q2 Interest = HP Q2 Interest + Compaq Q2 Interest • etc… Upper tolerance Check True/false Owner/Owned Flow Items Formula Constant Lower tolerance Result Owning Entity All “Flow” type Items In All Periods Variable Variable

22. Augmented Computation Linkbase Sample “business rule” <xbrl:formulaType select="(number($R1)) - $lower_tolerance) >= (number($R2) + $upper_tolerance)" xlink:type="resource" xlink:label="GTPP" xlink:title="GTPP"> <xbrl:variable name="P" type="period"/> <xbrl:variable name="E" type="entity"/> <xbrl:variable name="I" type="item"/> <xbrl:variable name="R1"> <xbrl:precondition name="entity" bind="$E"/> <xbtl:precondition name="item" bind="$I"/> <xbrl:precondition name="period" bind="$P"/> <xbrl:precondition name="period" interval="m" value="6 9 12"/> <xbrl:precondition name="period" minimum_value="20010101"/> </xbrl:variable> <!-- ... --> </xbrl:formulaType> <xbrl:formulaInstance xlink:label="GTPP"> <xbrl:bind name="P" value="20010101P3M"/> <xbrl:bind name="E" xlink:href="entity.xml#bailey_bank"/> <xbrl:bind name="I" xlink:href="ffiec-031.xsd#riad4011"/> </xbrl:formulaInstance> …but my point is…

23. Creating a Specification in a “capital-S” Standards Body • Requirements document • Market requirements – define needs, assess current solutions • Technical requirements – compatibility with other open specs • Use cases – specific cases to be covered • Specification document • Technical documents including design rationale • Reference implementation • Sample instances, documentation of instances • Sample application that illustrates correct semantics • QA and Review process • Define criteria, set deadlines, have 2nd editor, vote.

25. Implementation Profiles • Excited advocates of XBRL face cost uncertainties • Process analysis of exporting, transmitting, revising, importing • Authenticating sender and receiver, privacy, version control • Schema and linkbase version management, repositories • Current solutions require reinvention of wheels • Plug XBRL payloads into an existing communication path • Develop dedicated login, signature, transport • Publish suggested bindings to other specifications • OFX2 – not typically used for reporting, but it would work • SOAP / WSDL / UDDI / XLANG – Web Services • ebXML – business transaction protocol, process definitions

26. Register, retrieve, update producer and producer standing data; Register, revoke, update authorized persons at the producer; Register, revoke, update authorized intermediaries reporting on behalf of the producer; Obtain new versions of the reporting form; communicate other change notices; Submit a test report, submit an actual report; Obtain an error check or analysis on a report; Recall a previously submitted report; submit an updated report; modify individual data items within a report; Confirm acceptance or rejection of a report; Obtain a transaction history, version history; access log, and detailed audit trail of reports, by institution and/or report. Producer-Consumer interactions appearing in all e-reporting

27. Frequently Asked Question:How will XBRL impact content based businesses? • Intermediaries’ value added does not change • Completeness – History and breadth • Consistency – Data linkage via unique identifiers • Availability, Anonymity of access • Customization, Convenience • Intensifies competition over unique content • Producer & consumer behaviors change slowly Intermediary Consumer Producer Intermediary

28. Source: Liv Watson, Edgar Online Frequently Asked Question:How will XBRL impact content based businesses? • Less data preparation • Less data re-keying • More direct communication among processes • More emphasis on analytics • Dashboards • Expansion of non-financial information content • Rapid transformation of products • Semantic analysis • Information agents • Reduced data tailoring costs and revenues • Reduced application tailoring costs and revenues

29. Source: Terry Dawson, ICC ICC Information • Part of the Bonnier Group, BBI • 61 companies covering 19 European countries • local information specialists • core competence based around content • XML adopted throughout BBI • ICC Information - UK & Irish company info. • Private Companies, Directors & Shareholders • Capture • Analysis • Direct & Indirect distribution

30. Source: Terry Dawson, ICC Why XBRL is important to ICC • Standardisation of content is always important! • Isolates content value in purchasing decisions • Provides greater distribution opportunities • Standardises delivery platforms beyond XML • Supports analysis methods and data structure • Potential to significantly reduce costs • Leverages existing technology and skills • Positive revenue impact

31. Source: Terry Dawson, ICC Mid and Long-term impacts • For the Industry • reduced switching costs / development expense • increasing emphasis on content and end-user integration • reduced publishing costs • intermediaries must seek new ways of adding value • For ICC Information • greater ability for content to be integrated in a wide variety of applications • cost of capture reduces (subject to UK Companies House & other Company Registries adopting)

32. Frequently Asked Question:Why XBRL instead of our own Schemas? • Don’t reinvent the features of XBRL • Item types – financial parameters • Predefined concepts (labels, references) • Entities, periods, segments, scenarios • Extensibility using XLink • Business Information • that is • Financial in nature • Enhances standard definitions • Refers to multiple entities • Refers to multiple periods 9,000 EPS Information Producer Information Consumer € 2.5m 57% Information Producer Information Consumer Information Producer Information Consumer

33. Frequently Asked Question:Why XBRL instead of our own Schemas? • ICAEW • IASB • AICPA • IDW • JICPA • CICA • CPAA

34. b explains a b is the same as c Frequently Asked Question:What is XLink and why is XBRL based on it? • XLink is a W3C standard way to use XML to represent all kinds of relationships between XML elements no matter where they are. Linkbase XML Document 1 XML Document 2 <P id=“c”> <P id=“a”> <P id=“b”>

35. <Label>Current Assets</Label> <element id=“ast.cur”> Definition: more general label label <Label>Inventory</Label> Presentation: before reference <P>A formal explanation of Inventory in the Accounting Literature</P> <element id=“ast.fixed”> XBRL uses XLink to represent all relationships between data elements <element id=“ast.inv”>

36. <Label> </Label> <element id=“ast.cur”> Definition: more general <Label> </Label> Presentation: before reference <P>A formal explanation of Inventory in the Accounting Literature</P> <element id=“ast.fixed”> XLink allows customization and explicit, modular changes to reusable material label label <element id=“ast.inv”>

37. Frequently Asked Question: What about other financial markup languages? • MDDL – Market Data • RIXML – Research Reports • FpML – Financial Instruments • SMDX – Statistical Metadata • ISO 15022 – UML repository of financial data fields and business processes (SWIFT, FIX, etc.) • NewsML – News Packaging and Distribution • PRML – Press Releases • IFX and OFX – Financial transactions

38. Source: Tony Coates, Reuters What is the Role of XBRL in Finance? • Beyond company reports, XBRL is a good format to choose wherever a numerical breakdown/roll-up needs to be expressed. • If there are no such breakdowns, then the main XML file risks being just another XML file • Little to be gained from using XBRL, unless a significant proportion of items have accepted XBRL definitions • So it is a matter of horses for courses • XBRL’s forte is numerical breakdown/roll-ups • Supports drill-down into numbers of interest.