The Role of XBRL in Internal Reporting: XBRL GL/XBRL FR Conceptual Overview

1. The Role of XBRL in Internal Reporting: XBRL GL/XBRL FR Conceptual Overview Eric E. Cohen eric.e.cohen@us.pwc.com 11th XBRL International Conference Boston April 27th, 2005

2. XBRL GL & FR for Internal Reporting XBRL is well known as a tool to standardize financial statements, tax returns, and other publicly available or external facing documents. XBRL is also an important tool for more efficient, effective and accelerated internal reporting. From XBRL GL, the generic representation of transactional information that bridges the gap between transactions and reporting, to the use of XBRL for Financial Statements to represent common internal reports that involve summarizations and calculations not found in accounting systems, XBRL is a powerful tool for internal use as well. From transaction to summaries, XBRL meets the need.

3. Agenda • Internal reporting • XBRL for internal reporting • Data in internal reporting • Information concepts in internal reporting • Working together

4. Primarily for internal use only Preparation for external use More detailed versions of external reports Internal Reporting: Three Tracks Edit reports Ad hoc reports Posting reports Daily cash/AR/AP Performance Financial Tax Segment PII* * Personally identifiable information

5. In General • Internal Reporting is • More detailed • More frequent • More varied (less standardized) • Fewer “EDI or Die” vendor demands • Change/up-front costs of standardization without pressure from third party • But: more pressures now • Internal controls - SOx 404 • PCAOB 3, Section 5.c

6. Types of Internal Reporting • Operational and administrative • Management • Planning • Control • Decision making • Internal reporting drives • Procurement • Staffing and scheduling • Management and direction • Cash management • Preparation for external reporting …

7. Types of Internal Reporting • Preparation for • Financial • Statutory • Legal • Social • Environmental reporting Documents and entries People and organizations Inventory, supplies, services, processes, measures

8. What Makes it Worse? • Systems are Changing • New sources • Online accounting • Disparate systems • Traditional non-integrated • Point of sale • Job cost • Branch systems • Outsourced • Payroll systems and providers • New technologies • Web services • Requirements are changing • SARBANES-OXLEY, PCAOB We have seen a return to third-party processing. From ADP in the seventies to ASPs in 2005, one business’s data is being captured on another businesses’ computer.

9. Old World of Electronic Data Exchange NEW WORLD

10. BLT ASB AFT TGI FRY ECP HDL SWG DRW MFP WCP QYD DLY SKD DLY XPS WIU KYF XOI ZIS CUI WKD WHR ASB GEX RMO JIA HCO KFC AJT DKE BST VUH FQA Old World

11. Bus Service Service Service Service Service Service New World Web services Service-Oriented Architecture Enterprise Services Bus Facilitated by Standard payload

12. XBRL for Internal Reporting • Benefits of XBRL for external purposes is obvious • Shared meaning, different vocabulary • Standards and definitions • Global consumption • Machine to machine consistency • Public: From A to B to C • Is internal different?

13. Proprietary Formats: XML Alone Point A Point B ... Point n+1 qbxml qbxml smbxml smbxml Intacct xml Intacct xml SAP SAP Peoplesoft xml Peoplesoft xml Oracle

14. Enter Extensible Business Reporting Language • XBRL is • An international consortium of the business reporting supply chain • An agreement on the use of technology to build common user dictionaries and express business information • Dictionaries • Summarized reports • Detailed information • MORE THAN DICTIONARIES qbxml XBRL qbxml smbxml smbxml Intacct xml Intacct xml SAP SAP Peoplesoft xml Peoplesoft xml Tax Reporting

15. Standards-based Data Interchange qbxml XBRLGL qbxml • XBRL FR – Views of Data • A fact • At a time or for a duration • In a unit of measure • For an entity • Under a scenario • XBRL GL – Data • A framework • Based on journal history • Standardizing representations • Documents • Entries • Parties • Resources • Links • Tax • and more smbxml smbxml Intacct xml Intacct xml SAP SAP Peoplesoft xml Peoplesoft xml Oracle Industry transactional XML

16. Tax Regulators Investors Creditors Lenders Website Aggregators One way One way XBRL BUSINESS REPORTING XBRL GL Journal Taxonomy BUSINESS ERP G/L Packages CRM Transaction Creation 2-way 2-way (e-)Business X12, UBL, CEFACT FORUM, Other XML INITIATIVES Suppliers Customers • Orders • A/P • Delivery • Orders • A/R • Delivery Fills the GAPS between GAAPS Detail to summary Intra system Detail Accounting recognition/ classification

17. Scope and role of XBRL XBRL GL, the Journal Taxonomy XBRL Financial Statements Business Operations Internal Financial Reporting External Financial Reporting Investment, Lending, Regulation Economic Policymaking Processes Companies Financial Publishers and Data Aggregators Investors Central Banks Participants Trading Partners Auditors Regulators Management Accountants Software Vendors

18. Data in Internal Reporting • Consolidations • Data migration • Archival • Data transfer • Audit Trail

19. Basic Challenge: Similar Data, But … XBRL GL provides platform for agreed-upon and well defined list of concepts – make sure my “Account” and your “Account” means the same thing (not bank account or customer account but GL account.) Similar Data Account, Amount, Date Based on XML, XBRL GL is order independent; sharing element names for import/export means that AccountNo, AccountNumberm Account# and Account will all be express as one common name; applications will know what to expect inpublishing and consuming data files. Different Data Dictionaries: Field names, field order System 1: AccountNo, Amount, Date System 2: MonetaryAmount, PostDate, AccountNumber System 3: PostingDate, Account#, Value System 4: Date, Journal, Account, Amount Different Data Formats CSV ASCII WKS So many external data formats; XML provides a popular and increasing supported / demanded data format. Different Representations for the same concepts in common data field Journal: PJ, Payroll Journal, Payroll Date: 12-31-03, 20031231, 12/31/03 Once you have agreed on data field standardization, software applications require agreement on content in many cases. XBRL GL provides enumerated values to supplement XML data standards to help in this area.

20. XBRL GL Challenges Local Concepts of “General Ledger,” Holds More

21. AP GL AR IM PR Internal Data Exchange Outsourced Travel and Expense Non-integrated point of sale External payroll provider Subsidiary with separate system

22. From Initial Transaction I N V O I C E Invoice #: 10037 May 2, 2003 ABC Sales Corp. Item Description Qty Extension 1078 Blue Widget 200 2,803.78 1083 Cyan Widget 100 1,402.93 Sub-total: 47,592.33 Freight: Total: 47,592.33 <documentType>invoice</documentType> <documentNumber>10037</document Number> <documentDate>2003-05-02</documentDate>

23. Through ERP System Actual/Virtual purchase orders Outsourced procurement Outsourced e-ordering PO AP, IM sales orders OE AR, IM items IM bomp Off-site fullfillment Third party payroll customers vendors assets employees AR AP FA PR GENERAL LEDGER REPORTING

24. Facilitating Web Services, Assurance Mapping 1 Mapping 2 Assure Assure Assure Assure Assure Assure Assure Spell Check Shipping Rate Check Credit Check Assure? Logistics Check Rules and Journalization Audit and monitoring tool

25. Every System as XBRL Across language Across data definitions Across file formats System 1 System 2 System 3 XBRL GL XBRL GL XBRL GL Account# Description Amount PostDate Account Number Account Description Entry Amount Posting Date Identificador de la Cuenta Descripción Principal de la Cuenta Monto Monetario Fecha de Asignación/Ingreso accountMainID accountMainDescription amount postingDate accountMainID accountMainDescription amount postingDate accountMainID accountMainDescription amount postingDate

26. Data and Views Report Writer Accounting data Select information from database(s), including joins Report Formulas create new data fields Filter the record set Add headers/footers, conditionals with record groupings, derived totals based on sorts Concentration: Data Fields Concentration: Information Concepts Provide visual formatting rules, like cross-tab

27. Scope and role of XBRL XBRL GL XBRL FR Business Operations Internal Financial Reporting External Financial Reporting Investment, Lending, Regulation Economic Policymaking Transactional Representations Consolidation Processes Companies Financial Publishers and Data Aggregators Investors Central Banks Participants Trading Partners Auditors Regulators Management Accountants Software Vendors

28. Information Concepts in Internal Reporting • When you are working on internal versions of external reports • When your internal report rely on derived fields, totals • Aged receivables • 30, 60, 90, 90+, other “buckets” • Combination of XBRL FR for agreed upon derived fields and totals and XBRL GL for necessary detail

29. Broad Spectrum of XBRL Uses External recipients Summarized XBRL VR Views of data Concepts Related recipients Bank, accountant, regulators Data fields Fields of data Detail Internal recipients XBRL GL

30. XBRL GL Works With XBRL FR

31. Benefits of XBRL for Internal Reporting • Improves internal management • Speed • Detail • Cost of abilities of applications • Learn from mistakes, evaluate changes from plans early • Taxonomy - better communication from on top

32. Benefits of XBRL for Internal Reporting • Improves assurance • Details agreeing or reconciling to reporting • Internal auditing • External auditing

33. Benefits of XBRL for External Users of Internal Reporting • Improves sharing data with banks • Asset based lending • Listing of open accounts from customers • Listing of inventory • Improves sharing data with acquirers • Improves sharing data with partners

34. Today’s Internal … Tomorrow’s External? • How about • The same information from its source in greater detail - which may be tomorrow's external reporting? • Bringing together internal groups to speak the same language? • Drill down support from external today • Possible (partial or total) replacement for forms tomorrow

35. Tomorrow’s Control Environment “in plain English, which may include trend and qualitative information and graphic presentations” Deliver real-time XML data stream; On demand Web-services available data using secure and not-so-secure links Bring together information from various sources with all version control, security, etc.

36. Beyond Tomorrow: Entering New Dimensions with XBRL Triggers Documents After-the-fact Processes Promises Prospects Projections Predictive Periodic X: When assurance is delivered Y: When tests are performed Z: “Hardness” of data – later re-assurance? Newer assurance on this item is available: click here Real-time

37. <xbrl> Eric E. Cohen eric.e.cohen@us.pwc.com Questions? • Eric E. Cohen • PricewaterhouseCoopers • eric.e.cohen@us.pwc.com • (585) 271-4070 • Find out more • www.xbrl.org • www.pwc.com/xbrl </presentation>

38. Now’s the Time for Real-time • “[W]e need to move toward a dynamic model of current disclosure of unquestionably material information.” • Harvey Pitt, Pre-”E” • http://www.sec.gov/news/speech/spch523.htm • SEC. 409. REAL TIME ISSUER DISCLOSURES • Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m), as amended by this Act, is amended by adding at the end the following: • ‘‘(l) REAL TIME ISSUER DISCLOSURES.—Each issuer reporting under section 13(a) or 15(d) shall disclose to the public on a rapid and current basis such additional information concerning material changes in the financial condition or operations of the issuer, in plain English, which may include trend and qualitative information and graphic presentations, as the Commission determines, by rule, is necessary or useful for the protection of investors and in the public interest.’’

39. Do You Remember? • From “Highlights” of Initial XFRML Steering Committee, 10/14/99 • [We] should have an initial calibration on the initial picture framework – getting different products (financial statements, etc. others along the supply chain) working together. We need to develop a schematic of the value streams and use cases along with objectives and a timeline and a concept statement. • [XFRML] should have its roots in the "Audit Supply Chain." XFRML as technical standard for seamless process of exchange across all audit processes. • Our opportunity is to address things internationally at the level below the financial reporting level since there is more commonality at that level.