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Group 4

Group 4. Entity Level Group. Modelled Architecture. financial reporting between a listed company and exchange supervisor three different views. 2. Course of the Financial Reporting Domain Analysis.

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Group 4

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  1. Group 4 Entity Level Group

  2. Modelled Architecture financial reporting between a listed company and exchange supervisor three different views 2

  3. Course of the Financial Reporting Domain Analysis Accounting as “... the process of identifying, measuring and communicating information to permit judgements and decisions by user of the information” [AAA1966] 3

  4. Analysed Reporting Scenarios 4

  5. Conceptual Data View 5

  6. Conceptual XBRL Data View 6

  7. Background • Level 1 (transactions) [link to level 2/link to group 3] • Level 2 (summarization from GL/or REA) [link to group 3] • Level 3 (external reporting) • Level 4 (national reporting)

  8. Objective 1 • Catalogue of financial interoperability standards • XBRL FR (US GAAP, IFRS Taxonomies) • SDMX • CCL • GESMES • XBRL GL • Chart of accounts • XBRL Performance Reporting (GRI) • Others (HRXML, …)

  9. Issues: Knowledge base • Why we do not consider direct REA => XBRL FR/SDMX linkage • The amount of revenue arising on a transaction is usually determined by agreement between the entity and the buyer or user of the asset. It is measured at the fair value of the consideration received or receivable taking into account the amount of any trade discounts and volume rebates allowed by the entity. (IAS 18 para 10) • Why we do not underpin the knowledge base (to REA) – Mind the GAAP! • We are discussing abstract modelling of processes/transactions and concrete modelling of disclosures => we miss generic modelling of processes and abstract modelling of disclosures (experiences from SDMX for XBRL logic modelling)

  10. Issues: Knowledge Base • Is REA different for IFRS and US GAAP accounting? • Do we need ontological representation of accounting domain level/ financial reporting level ontology (GAAP superset)? • How It correlates to REA for different GAAPs? • XBRL GL is hardly related to any specific GAAP • What is the role of controlling (compliance/ Management Approach) • We strongly support disclosures (XBRL FR/SDMX) but hardly recognition/derecognition (logic) and measurement • “If a line item is not individually material, it is aggregated with other items either on the face of those statements or in the notes.” (IAS 1 para 30)

  11. Issues: Definitional aspects • Why we do not separate data view from function/process view/organisational view (ARIS/ Zachman) • Horizontal and vertical integration (clean definition for financial information and business reporting space) – consider role of aggregations • Supply chain vs. value chain • Entity reporting (entity definition and resulting consequences for entity reporting)

  12. Issues: BI space • Why we do not consider current DW/OLAP/BI solutions in aggregations (especially when XDT is de facto standard) • A lot of accounting data (especially for big corporations) is stored in DWH - ThyssenKrupp example • Financial reporting as reversed ETL process (offspring of BI reporting modules) • XBRL dimensions (2.1 and XDT) are difficult to map to DWH dimensions and GL dimensions (issues with definition of dimensions)

  13. Research topics • Adjustments (GL-FR) • Is direct conversion from REA to reporting useful. How you deal with adjustments (intermediate level is missing and if you really need adjustments and aggregation level) • Map financial accounting theory for adjustments to direct reporting process • What is an adjustment entry in REA terms?

  14. Research topics • CL and GAAPs • How is it possible to express accounting standards in CL or controlled English • How to express internal accounting policies in CL or controlled English • How can one use the formalized legislations to control the reporting process • Analysis of the legislation for regulated sectors e.g. telecoms (AT&T) and transition to CL or controlled English • How XBRL/SDMX reference metadata can be enhanced when linked to the GAAP CL instead to GAAP directly

  15. Research topics • CL for standards • XBRL taxonomies and SDMX data structure definitions to CL • XBRL 2.1 and XDT and SDMX specs and CCTS into CL for interoperability analysis • Definition of REA in CL for interoperability analysis

  16. Research topics • REA and different GAAPs • How REA can be linked to different GAAPs considering the specificities of the individual GAAPs • Creation of the REA based on traditional order systems • COSO diagrams can be captured as UMM/BPML => analysis how is it possible to express internal controls as logic • Comparison of treatment for measurement in XBRL and SDMX (dimensions and attributes) and CCL

  17. Research topics • Reporting process • UMM model for XBRL (reuse the generic SDMX model) external reporting (process orientation)

  18. Research topics • Multidimensionality • How can one translate SDMX to XDT (dimensions and hypercubes) • Is moving SDMX and XDT to CL enhancing the translation between these two?

  19. Research topics (groups 3 & 4) • How can the reporting entity manage the source data (GL, controlling, unstructured data) – is use of SDMX conceptual model linking from XBRL GL and other data sources to SDMX and XBRL FR possible? • How are adjustments handled given that a change on the FR need to be reflected on the GL side?

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