Alan Teixeira General Manager – Standards and Quality Assurance Institute of Chartered Accountants of New Zealand May, 2

1. XBRL for IFRS and Extension Taxonomies Alan Teixeira General Manager – Standards and Quality Assurance Institute of Chartered Accountants of New Zealand May, 2004

2. Session Outline • The core Taxonomies - IFRS and US-GAAP • Extension Taxonomies • Local GAAP • Local regulation • Entity specific extensions

3. What is a Taxonomy? An XBRL taxonomy is a description and classification system for the contents of financial statements and other business reporting documents. XBRL taxonomies can be regarded as extensions of XML Schema, augmented with written documentation and a number of additional XML Linking (XLink) files. Taxonomies represent up to hundreds of individual business reporting concepts, mathematical and definitional relationships among them, along with text labels in multiple languages, references to authoritative literature, and information about how to display each concept to a user. www.xbrl.org

4. The Core Taxonomies - IFRS and US-GAAP • There are two dominant GAAPs • IFRS • US-GAAP • They are converging, but not equivalent • The Taxonomies that capture IFRS and US-GAAP present powerful representations of financial reporting data.

5. The Demand for Extensions • Intra-Jurisdictional • Industries • Regulatory Filings • Extra-Jurisdictional • Cross jurisdictional comparisons • Can I compare elements? Which ones? • Convergence to IFRS around the world • Concepts are very common across jurisdictions • Aligning these structures makes sense

6. What is the Extension Process? • FRTA defines it as adding and removing concepts and relations. • Result is a “Taxonomy” that meets a particular need.

8. The completed “stand-alone” Taxonomy created for a specific process.

9. Entity Requirements Entity Requirements NZ-GAAP IFRS-GP NZ-GAAP Company Elements IFRS-GP NZX NZ-GAAP

10. NZX Appendix 1 extract IFRS-GP: Income Tax Expense (Income)

11. NZ-GAAP: Operating Surplus Deficit After Tax NZX Appendix 1 extract

12. NZX Appendix 1 extract NZX: Operating Surplus (Deficit) Change Percentage

13. Local GAAP • IFRS is not yet used by many major jurisdictions – there is still a demand for local GAAP • Even after IFRS there will be local needs • eg. New Zealand • Sector neutrality • Local requirements • Unspecified elements • Assets or expenses • The demand for entity specific extensions depends on how comprehensive the core taxonomies are.

14. Regulatory Extensions • Statistics • Company Returns • Stock Exchange • Tax • Monitoring Agencies • There will be many elements common to several regulatory agencies. Hence, one regulatory “extension” in a jurisdiction is achievable. • And regulatory extensions will have common elements across jurisdictions. • The message is that there is the potential to develop accepted international taxonomies in many domains.

15. Entity Specific Extensions • How will all this work? • Taxonomy creation • Taxonomy loading and instance creation • The extension process can be used to build XBRL power into your internal needs • Management reporting • Integration with non-financial reports

16. Summary • A Taxonomy based on a general purpose document will not meet the needs of all users for all uses. • XBRL provides a process for building extensions to core Taxonomies. • Extension taxonomies will be created by intermediaries (such as ICANZ) and the technology will soon make it easier for entities to create their own taxonomies. • We are not yet there but demand is increasing and the ability to supply is increasing. • We may not be far off a critical cost-benefit cross-over point.

17. XBRL for IFRS and Extension Taxonomies Alan Teixeira General Manager – Standards and Quality Assurance Institute of Chartered Accountants of New Zealand May, 2004