English Essay Steel. Online assignment writing service.
XBRLglobal April 2010
1. Corporate aCtionsDTCC’s Don Donahue and SWIFT’s Chris Church on how XBRL can solve an age old problem
XBRL Coming to a Business
PRoCess neaR You
Charles Hoffman
Vol 1 • Issue 1 • April 2010
2. The path taken by a corporate action
announcement is rarely smooth. Whether it's a
dividend, bond redemption or merger, the
stages between issuer to intermediary to
investor can see data get dropped, details
missed, and investor decisions, delayed.
The solution is clear. A standardised, common
language. One that ensures consistency of
information delivery and data integrity from the
issuer of a corporate action straight through to
the end user.
Together, Swift, the DTCC and XBRL US are
creating a solution that means less delay on
corporate actions announcements, less burden
on intermediaries, and less chance crucial data
will get missed or misinterpreted.
Which makes a lot more sense.
To find out more, contact Marlene McMahon
in our NewYork office:
email: malene.mcmahon@swift.com
telephone: +1 212 455 1906
How
successful
processing
starts
- and finishes.
For more information on SWIFT
and its portfolio, visit swift.com
To join the community debate
visit swiftcommunity.net
Issuer to Investor: Corporate Actions
Less delay. Less errors. Less risk.
More sense.
3. vol 1 • issue 1 • april 2010 | 1
to give us your input and feedback. We look forward to
hearing from you.
Best Regards,
Stephanie Lawton
Managing Director, XBRLglobal
W
e have some heavy hitters in this, our first
issue, with interviews from leaders and
innovators at SWIFT, the DTCC, and the US
Securities & Exchange Commission. Adding to the
debate, we have case studies and practical examples
of XBRL, demonstrating its application across different
sectors and regions.
Most importantly, now is the time for you all to get
involved. This industry publication is designed to further
the debate. We look forward to your feedback and
support to ensure that every issue of XBRLglobal raises
the questions and tackles the issues that count.
So, please enjoy the following pages, and remember
to drop me an email (stephanie.lawton@xbrlglobal.com)
From
XBRLglobal
Editor’s message
Welcome to XBRLglobal! This inaugural issue brings together experts
from across the financial services industry globally to share, discuss and
debate the role of XBRL as the standardised language for global electronic
communication of business and financial reporting at all stages of the
information value chain. An industry driven initiative to encourage and
provide greater transparency of the issues and debates on all matters
XBRL related.
4. | vol 1 • issue 1 • april 20102
Join XBRL US for the
XBRL US National Conference
XBRL US National Conference
When: November 9-10, 2010
Where: Pennsylvania Convention Center,
Philadelphia, PA
Who should attend:
Public company preparers•
Nonprofit professionals•
Government agencies•
Learn how XBRL can help put accountability into practice by
fostering transparency. Hear about initiatives ongoing in the
nonprofit, government and corporate reporting areas. Find
out how you can leverage XBRL for your own business goals.
Key topics that will be covered include:
SEC-US GAAP, including XBRL Essentials workshop/training•
with a focus on detailed footnote tagging
Corporate Actions, securities industry implementation and•
harmonization with ISO 20022
Corporate Governance, notice and proxy, executive•
compensation
Nonprofit•
Public sector/government•
For XBRL US Members:
Please join our members-only ½ day program on November 8,
including Annual Meeting, committee meetings and member
cocktail reception.
Learn more by visiting http://conference.xbrl.us.
Find out about sponsor opportunities by emailing us at
conference@xbrl.us.
6. | vol 1 • issue 1 • april 20104
the Accuracy of
XBRL-Tagged Data-
Assurance and
Related Services
20th
XBRL International
Conference, Rome
Views from participants in
the XBRL Assurance Track
theXBRLviewpoint
XBRL Assurance
Track Chair, Amy
Pawlicki, American
Institute of Certified
Public Accountants
(AICPA), USA
As XBRL is adopted for financial
and business reporting around the
world, there is an increasing focus
on methodologies to help ensure the
quality of data in the XBRL format.
Because judgment is involved in XBRL
tagging, there is room for errors,
and inappropriate tag choices can
hinder the accuracy of XBRL-tagged
data. As a result, many groups and
organizations are focused on research,
education and guidance related to
providing assurance and related
services on the accuracy of XBRL-
tagged data. The Assurance Track at
the XBRL Conference in Rome will cover
activities under way in the US, Europe
and Asia to address the accuracy of
XBRL tagging and provide assurance
on XBRL data. Track presenters will
discuss their experiences related to
assurance and agreed-upon procedure
engagements on the accuracy of
XBRL-tagged data performed to date.
Key issues related to XBRL assurance
will be up for discussion, such as
demand for XBRL assurance and/or
related services, the potential user
expectation gap, auditor association
and materiality, among others.
Amy Pawlicki, AICPA, USA
7. vol 1 • issue 1 • april 2010 | 5vol 1 • issue 1 • april 2010 | 5
theXBRLviewpoint
For Better Interactive Data,
Interact with Us.
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Hitachi Consulting
Building the Market Responsive Company
For the latest opinion and commentary about the fast-changing XBRL world from the
world’s top experts, visit the Data Interactive blog at www.hitachidatainteractive.com.
® ®
You know it’s critical to respond rapidly to local and global
changes in financial reporting.
Hitachi Consulting offers the industry-leading consulting,
resources and tools to help you outthink your competitors
and successfully execute on an XBRL strategy that
best supports your business goals
Interact with us by calling
1-888-HITACHI or visiting
www.hitachixbrl.com
The International Auditing and
Assurance Standards Board (IAASB)
is currently considering many
questions as part of its preliminary
consultations to determine whether
it is necessary and in the public
interest to develop a pronouncement
or provide additional guidance
addressing the use of XBRL.
An IAASB Staff Q&A document
issued in January 2010 supports the
view that the IAASB’s International
Standards on Auditing (ISAs)
Craig Crawford, KPMG US
(Chair of XBRL Task Force)
currently do not require that procedures
be performed on XBRL-related data
as part of a financial statement audit.
Before mandating procedures on
XBRL-tagged data in the absence of a
regulatory requirement, the IAASB will
need to conclude that doing so is in the
public interest and that the benefits, in
particular to end users, justify the cost
of doing so.
The IAASB acknowledged in the
Q&A that auditors may wish to clarify
their association with XBRL-tagged data
in the auditor’s report, by identifying
in the auditor’s report what financial
International Auditing and Assurance
Standards Board (IAASB),
Craig Crawford, KPMG US Chair of XBRL Task
Force and Jon Rowden, PricewaterhouseCoopers
(PWC) UK Member of the XBRL Task Force
8. | vol 1 • issue 1 • april 20106
theXBRLviewpoint
information is covered by the report.
Further research on the implications
of XBRL for financial statement
audits, including consideration of the
expectation gap, is being conducted
by a research team sponsored by the
Association of Chartered Certified
Accountants (ACCA) and the
International Association for Accounting
Education and Research (IAAER).
The IAASB’s targeted
consultations to date have identified
jurisdiction-specific demand for
the auditor to perform agreed-
upon procedures (AUP) to address
the completeness, accuracy and
consistency of the XBRL-tagged data.
The IAASB has a general standard
dealing with (AUP) engagements, and
the XBRL Task Force recognizes that
further guidance on the performance of
AUP engagements with respect to XBRL
may be helpful.
Further consultations, in particular
with users and regulators, are expected
to continue throughout 2010. A clear
understanding of the needs regarding
XBRL-tagged data, in particular as the
use of XBRL data grows, will assist the
IAASB in determining its way forward.
FROM THE PANELISTS
Question:
Current standards do not require the
auditor to perform procedures with
respect to XBRL-tagged data or the
process to tag the data. In addition,
the auditor’s report does not cover the
XBRL-tagged data. Therefore, what do
users of XBRL-tagged data (whether
true end-users or intermediaries, such
as regulators and tax authorities)
perceive the level of auditor involvement
with XBRL-tagged data to be?
Answer:
Akira Matsuo, KPMG, Japan
“Normally users perceive auditor
involvement as traditional paper-based
financial reporting.”
Efrim Boritz, Ontario Chartered
Accountants’ Chair in Accounting, and
Head of the IT and Assurance areas in
the School of Accountancy, University
of Waterloo, Canada
“Users may assume that XBRL-tagged
financial statements have the same
level of auditor involvement as the
official versions of those statements,
and that the XBRL-tagged versions
of the statements contain the same
information as the official versions.
However, most if not all of our current
professional standards do not require
auditor scrutiny of electronic versions
of those official versions, such as
XBRL-tagged financial statements
and the process used to create those
electronic versions may not result in
XBRL-tagged financial statements that
are the same as those produced in
other formats. In fact, studies indicate
that there is a surprisingly high rate
of errors and exceptions in the first
400 or so filings by SEC registrants
under the SEC’s new regulations
that required the largest companies
to furnish XBRL-tagged financial
statements starting in early 2009.
Also, an electronic filing may
contain financial statements, notes,
MD&A and other disclosures or
certifications with different levels of
auditor involvement, if any. Users
would not normally be able to guess
what level of involvement the auditor
had with this information.”
Barbara Majoor, Deloitte, Netherlands
“In general you would expect
that, once XBRL becomes a more
important medium in providing
financial information and replaces the
‘traditional’ form of issuing financial
information (such as annual financial
statements in the Form 10-K or 20-F),
true end users, regulators and tax
authorities will be looking for comfort
and requesting assurance from
assurance providers, such as auditors.
Although there is no requirement, true
end users have some expectations
and although auditors have no
involvement, true end users will
assume auditors have some.”
Question:
Would explicit language in the auditor’s
report explaining the auditor’s lack of
association with XBRL-tagged data
serve to reduce the expectation gap?
Answer:
Efrim Boritz
“Explicit language may help auditors
avoid liability, but may not help users
Jon Rowden, PWC UK (Member of
XBRL Task Force)
9. vol 1 • issue 1 • april 2010 | 7
be better to clarify this type of service
[rather] than create a new service with
a potentially limited lifespan and with a
potentially confusing message.
Also, a report on controls
surrounding the tagging process will
have inherent limitations and may not
provide all the assurance users may
want on the completeness and accuracy
of the tagged information itself.
Finally, for auditors to be willing
to provide a report on controls
surrounding the XBRL-tagging
process will require that issues
related to significance/materiality of
deficiencies/weaknesses be addressed
and resolved.”
Question:
What are the beliefs among different
stakeholders (i.e., audit firms,
preparers, users/regulators) on
whether auditors should perform
certain procedures on XBRL-tagged
data, or the process of tagging, as a
routine part of their financial statement
audits in the absence of a regulatory
requirement to do so?
Answer:
Akira Matsuo
“Regulatory requirement should
be established.”
Efrim Boritz
“I have not done an extensive
study of stakeholder beliefs,
but my perception, based on
theXBRLviewpoint
obtain the reliable XBRL information
that they may wish to use in their
decision models. Also, ’waving the
white flag‘ to highlight the avoidance
of responsibility may be a dubious
strategy for the auditing profession
to adopt.”
Akira Matsuo
“The expectation gap may not be
reduced with explicit language in the
auditor’s report either.”
Barbara Majoor
“Assuming the question refers to
auditor’s reports issued with respect
to “traditional” financial statements
such as the 10-K and 20-F, the
auditor’s responsibility is to issue an
auditor’s report on these consolidated
financial statements. So based on that
responsibility, there does not seem to
be an expectation gap. However, the
expectation gap won’t be solved only
by an explicit reference, explaining
that the auditor has no involvement.”
Question:
Would an auditor’s report on the
controls surrounding the XBRL-tagging
process result in a meaningful service,
given how XBRL-tagged data is used?
Answer:
Efrim Boritz
“A report on controls surrounding
the XBRL-tagging process could be
useful in some jurisdictions, but might
unnecessarily complicate assurance
services and confuse readers of SEC
registrant companies that are already
subject to SOX 404 reporting. For
such companies, users would have to
correlate SOX-404-type reports with
XBRL control reports and make sense
of any interactions between them.
This is too much to expect of most
users. As noted above, XBRL-tagging
controls may eventually be subsumed
under SOX 404 reporting, so it would
several interviews and conference
presentations, is that financial
analysts would like assurance about
the accuracy of the tagging. Some
regulators would also like assurance,
but are reluctant to impose additional
costs on companies in the current
environment for fear of a backlash and
the stifling of innovation.
Some preparers may want the
assurance, but may not be willing to
pay extra for the assurance services,
although others may wish to avoid
the embarrassment of furnishing
XBRL-tagged information with errors
and inconsistencies. It seems that
there is some demand by CFOs
and audit committees who wish to
avoid reputational harm from issuing
incorrect or questionable XBRL-
tagged information.
Audit firms do not seem to be
keen on providing assurance because
there is still limited experience with
XBRL, and professional standards
for such engagements are not well
developed, especially in terms of
providing guidance on the materiality
of errors and exceptions identified
by their procedures. Thus, they may
perceive more risk than reward in
providing such services.”
Barbara Majoor
“In The Netherlands there are
various stakeholders and users of
XBRL tagged data such as banks,
tax authorities and Chambers of
Commerce, who are supporters of
financial information being provided
through XBRL. Among some of these
stakeholders, there are currently
discussions going on regarding to
what extent auditors should be
involved in providing a certain level
of comfort with respect to XBRL-
tagged data. In general they prefer
the auditors provide some comfort
around the quality of XBRL-data and
the processes surrounding it.”
“Audit firms do not
seem to be keen on
providing assurance
because there is still
limited experience
with XBRL.
”
10. | vol 1 • issue 1 • april 20108
T
he collaborative effort to
create and promote XBRL
began in 2000 when a
small group of companies and
government agencies got together
to build the language, and support
its adoption. Over the years, the
initiative has evolved and grown to
involve about 600 companies and
agencies worldwide.
As we get ready for the 20th
XBRL International Conference
— aptly named “XBRL: Linking
Businesses, Public Regulators,
and Citizens” – that will be held
in Italy this April, let’s look at
how the data standard is being
implemented in a few countries
that have been particularly
receptive to XBRL adoption.
United States
2010 marks the second year of
the SEC’s XBRL mandate for public
company filings in the US. The
mandate is being phased in over a
three-year period, with the largest
accelerated filers having gone first.
The remaining large accelerated
filers using US GAAP will begin to
submit their financial reports in XBRL
for fiscal periods ending on or after
June 15, 2010. The final group of
smaller reporting companies will begin
XBRL filing next year.
The first group of large
accelerated filers, now in their second
year of filing in XBRL, will be required
to detail-tag their footnotes, which
is expected to pose significant
challenges. However, I believe this
is where the value of XBRL will truly
shine. There are data services that
plow through footnotes to uncover
information that companies try to
bury in routine SEC filings. Now this
information will be made available
to the smallest investor, not just
the professional money managers
and analysts who can pay for these
services. This is indeed an exciting
moment in the evolution and
adoption of XBRL.
Following its delivery of the XBRL
US GAAP taxonomies and Preparers
Guide to the SEC, XBRL US — the
United States jurisdiction of XBRL
International — has continued to
push for broader interactive data
theXBRLviewpoint
AROUND THE XBRL WORLD…
Providing an introduction to a cross section of national xbrl initiatives,
Hitachi Consulting‘s Wilson So, paints a vibrant picture of xbrl’s
increasingly central role in electronic financial reporting globally.
11. vol 1 • issue 1 • april 2010 | 9
Wilson So, Director, XBRL Solutions
Business, Hitachi Consulting
theXBRLviewpoint
adoption. A year ago it began to
collaborate with the Depository
Trust & Clearing Corporation (DTCC)
and SWIFT, the global provider of
secure financial messaging services,
to implement XBRL for corporate
actions announcement processing.
By electronically capturing data
directly at the point of origin in a
standardized format, this effort
should deliver the same benefits
that XBRL has brought to financial
reporting – greater accuracy, reduced
risks and costs, and improved
transparency and communication
between issuers and investors. Other
areas that are being looked at for
XBRL implementations include non-
profit financial activities like grant
application and reporting, as well as
asset-backed securities.
Japan
Japan has distinguished itself by its
smooth introduction of XBRL for
financial reporting through EDINET,
similar to the SEC’s EDGAR. Over 1,200
companies took part in the country’s
voluntary filing program, which augured
well for the mandate effected in fiscal
2008. About 5,000 listed companies
and about 3,000 mutual funds are now
submitting filings in XBRL.
Japan is also a leader in adopting
XBRL Global Ledger (GL) for internal
accounting. The first large-scale
implementation of XBRL GL was
at Wacoal, integrating 32 of the
company’s independent legacy
systems across 36 subsidiaries.
Japanese labels have been added
to XBRL GL taxonomy, and the
country’s Ministry of Economy,
Trade and Industry (METI) is moving
forward on J-SaaS (Software as a
Service) that seeks to utilize XBRL
GL for smaller companies without
large-scale IT infrastructure.
to learn, because it will show whether
there is a belief that XBRL will be
beneficial to parties other than the
government and regulator.
China
In the past few years, China has
been very pro-active in the adoption
of XBRL. It was the first country
to formally require XBRL for public
company financial reporting in
2004. The two stock exchanges,
Shanghai and Shenzhen, have
implemented XBRL since 2003. All
listed companies submit XBRL tagged
financial and periodic reports through
the use of a reporting tool developed
by the respective exchanges.
From the beginning, each
exchange has had its own taxonomy,
and these differ slightly. The
Shanghai taxonomy is published on
the XBRL International website as an
‘acknowledged’ taxonomy. However,
United Kingdom
2010 is an exciting year for XBRL
in the United Kingdom. For the first
time, two government bodies — Her
Majesty’s Revenue & Customs (HMRC)
and Companies House — have put
together a timetable for companies
to report in XBRL. It is fair to say the
United Kingdom has strongly reiterated
its commitment to XBRL, which was in
some doubt after the Financial Services
Authority chose not to adopt the
standard to communicate financial and
regulatory information.
Companies House launched a
voluntary, audit-exempt XBRL reporting
program for smaller firms that has
received over 200,000 company
accounts. HMRC, the government’s
tax agency, is pioneering the use of
Inline XBRL for Corporate Tax Returns
(CTRs). The use of Inline XBRL by
HMRC takes into consideration the
need for humans to communicate on
a tax return, even though machines
are expected to perform the function
of identifying ‘a needle in a haystack’
for further investigation of a certain
filing. Companies House and HMRC are
working together on a single gateway
for filing, with April 2011 as the target
date for mandatory XBRL filings of
CTRs and company accounts.
The upshot is that most financial
departments of large UK companies
are aware of what XBRL is and know
that they will have to report using the
format in the next two years. In the
meantime, as with any new technology
introduction, there is uncertainty over
the best way to produce XBRL reports
(buy tools and do it themselves,
engage a third party, or use the
government template). Companies
also have a choice between producing
the whole financial report in XBRL or
doing the bare minimum.
How they choose will be interesting
12. | vol 1 • issue 1 • april 201010
as far as practical use is concerned,
both the Shenzhen and Shanghai
taxonomies are utilized by China’s
listed companies, with the choice
depending on where they are listed.
In 2008, a project was initiated by
the Ministry of Finance to align the
two taxonomies. Led by the China
Securities Regulatory Commission
(CSRC), the securities industry
regulator, a consolidated taxonomy
was created in late 2009.
China was also the first country
to adopt XBRL for mutual funds:
there are about 60 Chinese mutual
fund companies that report in XBRL
to the CSRC. Starting in July 2009,
this information was available for
viewing from the CSRC web site. The
application of XBRL across additional
asset classes and security types,
including futures and options, is
currently being investigated at the
CSRC. The goal is to bring greater
transparency to the entire securities
industry in China.
The Ministry of Finance is
currently studying the broader
implementation of XBRL in China,
and it has initiated a number of
research studies into specific
areas with the help of research
institutes, listed companies, and
financial system vendors. One area
of investigation is the integration of
XBRL reporting across nine ministries,
including those responsible for
taxation and statistics.
Spain
Spain has always been a leader in XBRL
development. The Bank of Spain, the
country’s central bank, has been a
pioneer in using XBRL to collect and
analyze information from financial
institutions. Helped by the Bank
of Spain’s work, the Committee of
European Bank Supervisors (CEBS) has
begun using XBRL for Basel II reporting
across all 27 member states.
In February 2009, Spain mandated
XBRL for financial reporting. Some
500,000 XBRL instances have been
filed with the Mercantile Registrars
Association of Spain.
Recently, Spain has begun
introducing XBRL for annual budget
settlements. Across the various
levels of government – regions,
metropolitan areas, and municipalities
– some 17,000 budget settlements
are performed in Spain each year.
The reporting entities have different
computer systems and different
workflows; each settlement requires
up to 400 rows of information.
The implementation is creating a
paperless settlement process that is
providing more accurate, typo-free
information at reduced cost.
Netherlands
XBRL has been an integral part
of the Netherlands’ “Different
Government” program, offering
higher quality service with reduced
red tape. Building on the success
of its XBRL program for local water
management, the country introduced
the Dutch Taxonomy Project which
seeks to reduce the country’s
total administrative and reporting
burden by 25 percent. Renamed
Standard Business Reporting (SBR) in
alignment with a similar program in
Australia, the Netherlands is pursuing
a comprehensive approach to XBRL
reporting that comprises company’s
annual accounts, tax filings and
business statistics.
Conclusion
The adoption of XBRL worldwide
is much broader than I’ve
described here. However, there
is one common thread through
all implementations thus far:
government mandate has been the
major driver behind adoption. Now
that a certain critical mass has
been reached, the next step is to
consider how to leverage the trickle-
down effect of all the government
implementations to bring adoption
of XBRL to the next level. It could be
the use of XBRL internal reporting to
automate an end-to-end process of
financial reporting and analysis that
would not only satisfy compliance
requirements, but perform internal
control and management as well.
This is just one example — the
pathways are many.
I think it is fitting at this
juncture that the XBRL International
Standards Board (XSB) has published
a Discussion Document to invite
comment about the future direction
of the XBRL standard. The board
has stated three goals – make
XBRL easier for developers, more
comparable across taxonomies,
and easier to consume alone and in
combination with other standards.
That these three goals remain
unchanged after the comment period
is not essential. What is important
is the opportunity the XSB initiative
provides all stakeholders to guide
the evolution of the standard, now
that XBRL has attracted a much
wider base of users.
“...there is one
common thread
through all (XBRL)
implementations
thus far: government
mandate has been the
major driver behind
adoption.
”
theXBRLviewpoint
13. vol 1 • issue 1 • april 2010 |11
Getting the message right
Does XBRL have a role to play in
clarifying corporate actions
Poorly communicated
corporate actions are,
according to industry
research, costing investors
millions of dollars every
year. Chairman and
Chief Executive Officer
of The Depository Trust
& Clearing Corporation
(DTCC), Donald Donahue
believes the solution is to
capture data on the action
directly from the issuer,
and in a standardised and
transparent format – and
that XBRL provides the key.
XBRLglobal: It has been almost
a year since you declared your
support for XBRL by joining forces
with SWIFT and XBRL US. What was
the rationale behind this project?
Donald Donahue: As an organisation
– and like much of the rest of the
industry – we’ve experienced our fair
share of problems [see ‘The case
for XBRL’]. All too often, the issue
is that, with so many cooks stirring
the broth it creates errors, risks and
exposure. What we believe is that, the
more you define the information being
presented, and the more you reduce
intervention in the middle, the more
risk you take out of the process.
With the work that’s been
undertaken by XBRL over the past
decade, especially on the XBRL
US GAAP taxonomy, and with the
success XBRL has had in getting
people in the market to speak in
a structured way, for us it was
like a light went on. XBRL US was
using precisely the methodology
for communicating information into
the marketplace that we had been
trying to persuade issuers to use on
corporate actions.
The result is that we believe the
collaboration we announced last
year will fundamentally change the
announcement of corporate actions.
We believe it will bring greater
accuracy, reduce risks and costs
and improve transparency between
issuers and investors.
This partnership between XBRL
US, DTCC and SWIFT will promote
straight-through-processing (STP) by
electronically capturing data directly
from issuers or offerors at the point
that a corporate action is announced
and in a stand ardized format.
XBRLglobal: Has it lived up to your
expectations?
DD: Realistically, it’s too early
to make a judgement. What we
do know however, is that the
whole issue of identifying and
Donald Donahue, Chairman and CEO of DTCC
theXBRLvision
14. | vol 1 • issue 1 • april 201012
theXBRLvision
THE CASE FOR XBRL
The following is an extract from a
speech given by Donald Donahue in
New York on 28 May 2009.
All of us who’ve worked with
corporate actions over the years
probably know a number of horror
stories that reveal just how much risk
lurks in the shadows of the corporate
actions process. Let me share one
from my own experience that vividly
illustrates the need for “improving
corporate actions communication”.
Some years ago, we handled
a merger between two companies.
Company A was acquiring Company
B in a four-for-one stock swap – four
shares of Company A’s common stock
for each one share of Company B.
As our people – and everyone
in the industry – went through
the 100-plus page prospectus, we
consistently saw the terms “four
for one” – on the cover, in the
summary, in the detailed description
of the offer, everywhere we looked.
We set up the merger as a four-
for-one exchange. We processed
the exchange and credited our
participants with their allocations
of the new Company A stock. Our
participants, in turn, credited their
customers and, of course, many of
their customers then went out and
sold these shares.
We presented our holdings of
Company B stock to the agent,
and awaited receipt of the new
Company A shares.
Now you probably all know
what’s coming. When we got the
new Company A shares, we received
a quantity that equalled three
new Company A shares for every
Company B share – and we promptly
got into a squabble with the agent
about the shortfall.
Only after weeks of arguing did it
become clear that the terms of the deal
were not what we had all thought they
were. Company B was actually involved
in a number of intellectual property
suits at the time of the merger, and had
some significant exposure on some of
those claims. Company A wasn’t willing
to take on that exposure, of course,
and so it set up an escrow account
against the risk, and funded the account
by withholding one of the four shares
that were the proceeds of the merger.
The idea was that once the claims
were resolved, Company A would
distribute whatever remained in the
escrow account. But it was highly
unlikely that anything would be left
over. So Company B shareholders, in
reality, would only get three shares for
every one they held.
When we went back to the
documents, we found, buried, a one-
paragraph statement regarding the
escrow account and the withholding of
the one share. It was the only reference
throughout the entire prospectus. Did
it satisfy disclosure requirements?
At the end of the day, we concluded
that it probably did. Did it effectively
communicate to investors and
the industry the actual terms of
the offer, in a way that eliminated
misunderstanding? Absolutely not!
In the movie version, this is
where the angry guy with the chain
saw appears. In our case, I think
the write-off was somewhere north
of $1.5 million, and we know the
industry collectively wrote off some
multiple of that amount.
Talk about a “teachable moment”
for risk management! This was
when we became zealots about the
absolute imperative that information
about corporate actions be accurately
and completely described in a
standardized way by the originator
of the corporate action; and be
released in a way that is standardized
throughout the industry so that
the information can be immediately
disseminated to all interested parties
without further manual intervention.
“The Company A Incident,”
was proof that leaving each
intermediary individually responsible
for interpreting information – and
for translating the information into a
form that can be communicated to
their clients – is absolute lunacy and
opens the door wide to risk.
Obviously, the risk in our business
is very high. Reducing it should be a
top priority. And we have an historic
opportunity to begin doing that.
We have an opportunity to bring a
new tool, XBRL, to issuers, so that
they can make their intentions more
transparent.
We have an opportunity to save
our customers millions of dollars.
And we have an opportunity to bring
clarity, conciseness and consensus
to the often murky and unnecessarily
risky business of processing
corporate actions. A tall agenda, but
a critically important objective.
“We’ve had to be
very clear outside
the U.S. that this is
a complementary
effort – that it is
totally congruent
with ISO 20022 –
and that we believe
this is a huge step
forward.
”
15. vol 1 • issue 1 • april 2010 |13
theXBRLvision
manufacturing data with respect to
corporate actions is fraught with
risk for everyone in the industry who
touches it.
Obviously, we still have a fair
amount of work to complete,
especially in defining all the tags.
We’re looking at more than 40 US
corporate action types, and in each
case you have to define the tags, so
there is a fair amount of ministerial
work that has to be done. We are also
working to ensure the XBRL taxonomy
aligns with the existing global
standard, ISO 20022, which requires a
level of integration that probably has
not been done before with XBRL. This
level of detail has occupied the best
part of the last year.
Adding to the workload, we’re
also trying to introduce this outside
the US. This global reach certainly
adds a layer of complexity.
XBRLglobal: What has DTCC been
doing to raise awareness of XBRL?
DD: One initiative we put in
place immediately after the
announcement of the DTCC, XBRL,
SWIFT collaboration last May was to
hold a conference involving all the
parties along the corporate action
notification chain. The aim was to
look, from an issuer’s perspective,
at whether XBRL can solve the STP
missing link. We also wanted to
demonstrate how XBRL can tag key
corporate action event details found
within the issuer/offeror’s public
disclosure documents.
Over the past year we’ve
continued to work with our partners
to share updated information to
the various stakeholders via the
media and at conferences. We’ve
also continued to keep some of
the key industry organisations,
such as SIFMA (Securities Industry
and Financial Markets Association),
ISITC (International Securities
Association for Institutional
Trade Communications) and ICI
(Investment Company Institute),
informed of our progress.
XBRLglobal: Where have you seen
the strongest support? And where
are you seeing resistance?
DD: We’ve certainly had early
leaders both geographically and
sectorally who have embraced
XBRL enthusiastically. Equally we’ve
had communities that say “ok we
understand the concept, but we
want to see some detail”. From our
perspective, we need to understand
what issues different groups are
“From our perspective, at any point they
touch the market XBRL can make an issuer’s
communications more transparent.
”
16. | vol 1 • issue 1 • april 201014
theXBRLvision
Developing a Business Case for
Corporate Actions and XBRL
Three stakeholder groups were
formed last year to help develop the
‘Business Case’ for DTCC’s, SWIFT’s
and XBRL US’s XBRL strategy.
(1) Issuer Group, including issuers,
stock exchanges, transfer agents
and financial publishers.
(2) Intermediaries Group, including
banks, broker dealers,
institutional broker dealers and
retail brokers.
(3) Investor Group, mainly focusing
on institutional asset managers.
After meeting individually, the groups
came together late last year to
discuss issues, including:
• The challenges faced by the
financial services market
• XBRL’s role in addressing risks/
costs associated with these
challenges
• What a new process with XBRL
would look like
• The challenges in implementing a
new process
A draft of the ‘Business Case’ is
due to be released to the industry
for comment in the second quarter
of 2010. Feedback on this draft
will be implemented into a finalised
document.
To get involved: www.dtcc.com and
click on ‘Thought Leadership’ or see
http://xbrl.us/i2i/Pages/default.aspx
facing and address these.
From an individual standpoint,
the people in the middle who are
doing the conversion of information
are madly in love with the idea. The
receivers of XBRL-tagged data, the
investors, all absolutely agree this is
a good thing to do. It provides speed
and accuracy. The response has
been strongly positive.
We do understand, however, that
for the creators of the information,
who are used to the disclosure
requirements that have been in place
for the past 75 years, many of them
are asking, “why do we have to do
things differently?”. Our experience
is that some get it right away, while
others are more sceptical.
Support from the regulators has
also raised the profile. We know
the US Securities and Exchange
Commission (SEC) had success
during the best practice stage for
GAAP reporting – even before it
made XBRL filing mandatory. We
want to see this as well. We need
to get market leaders to adopt it
as a first step, and then we want
to get it to a point where everyone
in the market knows this is best
practice and standard practice. The
experience we gain over the next
few years will show us how far we’re
going to achieve this.
XBRLglobal: What’s been the
response from the clearing houses
and regulators in Europe and Asia?
DD: Our impression is that originally
Europe saw the initial XBRL initiative
as something that would be
competitive with ISO 20022. There
was a sense of “here we go again
with another new standard”. So
we’ve had to be very clear outside
the US that this is a complementary
effort – that it is totally congruent
with ISO 20022 – and that we believe
this is a huge step forward, and in
particular a huge step forward for the
global financial centres.
Both Euroclear and Clearstream
get this. They see that we’re moving
in the right direction. They’re aware
of the confluence and they have
similar needs. I think they’ll adopt
a wait and see approach now, but
they’ve certainly shown interest.
The issues have been similar in
Asia, although we’ve had some very
positive feedback from some of our
colleagues in China and Japan.
XBRLglobal: Where do you see
expansion of XBRL for DTCC?
DD: Is there a natural fit outside
corporate actions? Yes, it’s
unquestionably a language that can
be used for a range of sensitive
issues. Anything that can make
assets more transparent using XBRL
– and there is already a proposal in
to expand its usage in relation to
securitisations – this is a huge step
forward in making people understand
the financial assets.
There is clearly a movement
towards using XBRL as a way that
issuers should communicate with the
“We need to get market leaders to
adopt it as a first step, and then we want
to get it to a point where everyone in the
market knows this is best practice and
standard practice.
”
market place. From our perspective,
at any point they touch the
market XBRL can make an issuer’s
communications more transparent.
I suspect we’re not even scratching
the surface as to where we can scale
this to.
17. vol 1 • issue 1 • april 2010 |15
When you think of global
standards, SWIFT is the
one that leaps off the
page. Established in
1973, the global financial
messaging network now
covers more than 9,000
institutions worldwide.
So when the US-based
cooperative decides to
join forces with XBRL US,
the financial community
sits up and listens.
XBRLglobal got talking
with SWIFT’s CEO of
Americas and Global
Head of Securities,
Chris Church, and asked
why SWIFT was putting
its weight behind a
relative newcomer in the
standards world.
A Game Changer for
Corporate Actions
SWIFT, DTCC & XBRL join forces to solve
an age old problem
it’s inefficient. It’s not automated,
it’s not standardised and it’s not
transparent,” explains Church.
His arguments are backed up by
research, including a 2006 study
by the Europe-based financial
consultancy, Oxera, which valued
C
hris Church is a man on
a mission, to innovate,
standardise, and unite
the industry around a solution to
many of the age-old problems with
corporate actions processing. That
said, his approach is not to preach
the language of taxonomies and tags,
rather his fervent belief that XBRL
is a key component in the solution.
“The problem at hand is that the
business of corporate actions is
costing the industry hundreds of
millions, if not billions, because
Chris Church, CEO of Americas and Global Head of Securities, SWIFT
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18. | vol 1 • issue 1 • april 201016
losses on corporate actions
worldwide at between US$400 and
US$900 million dollars per year.
Given that the data is already four
years old, the likelihood is that
now this is a $1 billion dollar a year
problem globally.
“XBRL is about reducing errors,
it’s about creating standardised,
easy-to-analyse information, it’s
about risk management and, most
importantly, it’s about ripping cost
out of the industry,” Church argues.
Among its many claims, XBRL
professes to push information along
the value chain in a standardised
way. “XBRL captures corporate action
data at the source in a much more
automated way. You’re getting the
information directly from the issuer
in a standard format, which allows for
reconciliation at various points along
the value chain,” explains Church.
What’s in it for me?
So it’s all good. But what’s in it for
SWIFT, an organisation that calls
itself a member-owned cooperative?
A little over a year ago, SWIFT,
the Depository Trust and Clearing
Corporation (DTCC) and XBRL US
announced a major alliance. The move
put senior members of the SWIFT and
DTCC managements on the board of
the XBRL US organisation.
The presence of the two
heavyweights on the board of the
relative newcomer adds serious
credibility to the XBRL format.
SWIFT brings to the table more
than 35 years of experience in
providing technical and business
expertise for standards development,
and more importantly some argue,
can extend the reach of XBRL
standards formats through the entire
SWIFT community.
“We’re really excited at the
prospect of working with DTCC,
XBRL US and the rest of the
industry to help solve the problem
of corporate actions and deliver
value to the industry.
SWIFT will play a key role
in providing technical and
business expertise for standards
development and extending the
reach of XBRL standards formats
through our entire international
community,” says Church.
Church describes the coming
together of SWIFT, XBRL US and
DTCC, along with the industry, as the
Perfect Storm.
“We’re singing from the same song
sheet. We’ve taken a united approach.
We’re all operating together to move
this forward with the focus on solving
the problems that the industry is
facing,” says Church.
Church points to the global
financial crisis of 2008 as the
catalyst that brought the alliance
together. “We were aligned behind
a desire to improve the current
system. SWIFT and the DTCC are
quite similar organisations. We have
similar stakeholders facing similar
issues, related to reducing industry
cost, increasing transparency and
reducing risk so it made sense for us
to work together.”
From ideas to practice
The next step, Church explains,
was to get the broader industry
perspective. “We formed a joint
working group with the industry. We
asked for their views and corporate
actions were immediately identified
as a problem.”
Church says the industry has
given the alliance, also known
as Issuer to Investor: Corporate
Actions, strong endorsement.
“Together with industry support
we feel we can crack this. It’s been
interesting to see the problem and
the genesis coming together. The
end result is a solution that is by the
industry, for the industry.”
As SWIFT describes itself as a
community cooperative, gaining
support from its Board was key. “Our
Board gave us its full endorsement.
They told us, ‘We support you and
we want you to focus on this.’”
Church continues: “We had to
prove that using XBRL would work
for corporate actions. It made
“The problem
at hand is that
the business of
corporate actions
is costing the
industry hundreds
of millions, if not
billions, because
it’s inefficient.
”
theXBRLvision
19. vol 1 • issue 1 • april 2010 |17
sense to start in the US, but clearly
corporate actions are a global
problem. So our challenge was to
show how XBRL works in practical
terms and how it can be applied on
an international level.”
Mutually beneficial?
Industry bloggers have suggested
that the close working relationship
developing between SWIFT and
XBRL US gives added hope that
XBRL will take on the needed
additional discipline around taxonomy
interoperability, certifications, and
tempered change. In return, one
blogger says, SWIFT can learn from
XBRL as well. “Maybe we’ll see some
of the dynamic XBRL approach
rubbing off on the SWIFT MT,
15022 and 20022 standards,” the
anonymous blogger suggests.
Church seems to agree that
the industry bloggers offer a fair
assessment of what he refers to as
a mutually beneficial relationship.
“This alliance certainly puts us at
the centre of shaping developments
in the financial standards arena. By
partnering with XBRL US we get to
work with the industry to define
standards, to shape market practice
and to develop solutions. It’s where
we want to be.”
“The work XBRL does in
facilitating the reporting of public
company filings, combined with
SWIFT’s expertise and presence in
the financial sector, will substantially
increase automation in activities
such as corporate actions, financial
disclosure filings and accounting
reports,” adds Church.
XBRL? What?
Church has an enthusiasm for XBRL
that is not shared by all. According
to an UK survey of financial
professionals, most notably from
the accountancy sector, over 50
percent were not familiar with
XBRL. So has SWIFT seen resistance
among what is undoubtedly a core
stakeholder group?
“The way XBRL is being rolled
out, we’re certainly seeing greater
engagement from the financial
sector. However, we do feel XBRL is a
good example of how a standard can
cross domains¬–from the financial
to the accounting domain. We see
strength in leveraging the interest
among financial professionals, so we
link these two communities,” he says.
“As for raising general
awareness, we’ve been working with
XBRL US for some time, but until
recently we’ve kept a relatively low
profile. However, with the SEC now
flagging up XBRL and mandating its
use for filing returns, the profile has
received a substantial shot in the
arm,” adds Church.
Winners and losers
Despite his exuberance for the SWIFT,
DTCC and XBRL US alliance, Church
is mindful that some stakeholders
are going to come to the table more
willingly than others.
“The three primary stakeholders
are the issuers, the investors and
the financial intermediaries, such
as market infrastructures, central
depositories and brokers, and we
do see benefits to all three groups,”
Church explains.
For the issuers, Church argues,
there will be a period of perhaps
unwelcome change as the information-
providing end of the industry moves
towards the new format of data
tagging and capture. But the result is
that they’ll be getting the information
to the investor community in a more
accurate and timely fashion. There
are only a couple of hundred fields
that need to be tagged for corporate
action announcement, having said
that, this is probably the group that
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20. | vol 1 • issue 1 • april 201018
About SWIFT
SWIFT, an international consortium
of over 9,000 financial services
firms, industry utilities, and their
commercial customers stretching
across 209 countries, brings
significant expertise and long-term
experience in standards development,
implementation and migration.
They also bring their relationship
with ISO and the development of
ISO 20022, which seeks to bring
harmonization across different
standards initiatives. SWIFT’s skills
complement the skills demonstrated
by the XBRL US organization in
driving rapid standards development
and adoption, and the development
of unique functionality that increases
the usefulness of the XBRL data
tagging technology.
Key facts
• 200,000 corporate action events
are announced each year in the
US alone.
• The process is almost entirely
manual and prone to errors.
• The DTCC processes 5.8 billion
corporate actions each year.
• Industry losses on corporate
actions worldwide run about $1
billion dollars per year.
needs the most support. The key,
we feel, is that we need to get the
tools to the issuers that will allow
quicker and cheaper automation.
For the smaller operators they
may choose to work with, or
outsource to, an issuer agent.”
Other stakeholders along the
information value chain will be
more easily persuaded, Church
suggests. “The advantages for the
financial firms and other investors
are tremendous. They receive the
information in a standardised and
time efficient way. There is a lot
less data scrubbing, a lot fewer
errors, and the advantages on the
risk management side are obvious.
All this adds to an immediate
reduction in cost.”
Church adds, “The XBRL
tagged data is standardised,
transparent and easy to analyse.
These organisations can compare
and benchmark tagged data in a
like-for-like way. As we’ve seen
with our DTCC partner, there are
natural synergies.”
Spreading the message
Still in its infancy and despite
Church’s enthusiastic appetite for
the standard, the success or failure
of XBRL for corporate actions is
unlikely to be called for some time.
Church says SWIFT is prepared for
the long haul. “There is still a lot of
work to be done. We are rolling out
our ISO 20022 Corporate Actions
messages in November for those
customers that are ready. At the
end of the year, we will kick off a pilot
program jointly with DTCC. Given our
progress to date, we’re certainly hoping
that within the next three years we’re
going to see a large level of adoption.”
“If you look on a geographical
basis, we’ve had a lot of interest in
Japan, as well as from the Mainland
China exchanges in Shanghai and
Shenzhen. Interestingly in China,
because the financial markets are
at a different level of development
than other parts of the world, we
don’t see as much legacy in the older
technologies. Countries such as China
have the opportunity to leapfrog
a range of technologies and to be
leaders in implementing standards like
XBRL,” adds Church.
But even among the more mature
financial markets – Western Europe,
Australia, Canada, South Africa –
Church highlights that interest levels
are high.
On a sectoral basis, Church
believes the development of the
XBRL standard has resulted in a
linking of the financial and accounting
standards. “We’re seeing these
two sectors reaching across the
corridor and adopting XBRL as their
lingua franca. There is a common
understanding that we need this
standardised language – just as we’ve
seen through the expansion of SWIFT
– as we build complex and global
business transactions.
We’ve seen it happen. SWIFT is
a truly global franchise and we’ll be
taking this approach to the expansion
of XBRL. We need to seed discussions
“Given our progress to date, we’re certainly
hoping that within the next three years we’re
going to see a large level of adoption.
”
in other countries, and we need to
build on our experience in the US
and other leading jurisdictions.”
As we bring our conversation to
a close, Church remains buoyant. “I
spoke of the Perfect Storm. That’s
what we have. It’s all these forces
coming together around a common
industry problem. We think we
have a winning formula in SWIFT,
DTCC and XBRL US to jump start
this program. I am confident we will
deliver value to the industry, which
will then be replicated across the
global financial community.”
theXBRLvision
21. vol 1 • issue 1 • april 2010 |19
You may not have heard
of XBRL or the semantic
web yet, but trust me, you
will. While XBRL built its
momentum as something
that government
regulators used in
financial reporting,
XBRL and the semantic
web will become part of
and will add significant
value to many of your key
business processes over
the coming years.
The Light Bulb
People ask me all the time about
when the light bulb went on over
my head and how I came up with
the idea which became XBRL. Well,
it didn’t quite work that way.
Frankly, I don’t know if it ever does
really. Maybe it does.
I had spent my entire career
as an accountant moving business
information, most of the time
financial information, from one
place to another place, usually in
two different business systems, for
which I paid good money. Why this
task was so difficult was beyond
my comprehension. Every business
system seemed to have their
own unique approach to getting
information in and out; but despite
the difficulty and challenges the
payoff was good: I could spend
more time working out for the
triathlons I participated in, rather
than work long hours enduring the
drudgery of rekeying information into
spreadsheets! But it was hard to
repeat these process-improvement
projects effectively or efficiently.
Most business people don’t have
the technical skills which I have
accumulated over the years. As a
result, these process-improvement
tasks could be costly in terms of time
and money. There was also a limit
to the types of processes you could
A
s one of those participating
in the evolution of XBRL from
the beginning, let me explain
why XBRL is both an opportunity
for you and your competitors.
Let me tell you a little about how
XBRL got started, the momentum
it has accumulated, how that was
generated, and where XBRL is really
going, (which may not be where you
might think it is going). Standards,
such as XBRL, have changed entire
industries. We are already seeing
the changes XBRL has brought to
regulatory and financial reporting.
But XBRL is really only the tip of the
proverbial iceberg of what is really
coming: the Semantic Web.
By Charles Hoffman, Director of Innovative Solutions, UBmatrix Inc, (and
credited as “the Father of XBRL”).
XBRL:
Coming to
a Business
Process
Near You
theXBRLvision
22. | vol 1 • issue 1 • april 201020
theXBRLvision
attempt to improve economically.
Lastly, there were many different
ways to solve these problems and
there was no standard solution, which
was one of the primary contributors
to complexity and cost.
In early 1998 when I picked up a
book on what XML was (which I had
heard of but really did not understand
at the time) and read about how
several industries were using XML to
exchange information there were two
distinct things I noticed. The first
was that XML was the answer to me
getting more time to go on long bike
rides. The second was that nowhere
in that book was there any mention
of the financial reporting industry
making use of XML.
No one thought XBRL was a Bad Idea
It just so happened that a year
earlier I had received the AICPA
Innovative User of Technology
Award for some work I had done
in creating what amounted to an
intranet packed with information
useful to management, for a CPA
firm I was with at the time, Knight,
Vale & Gregory (now part of RSM
McGladrey). To make a long story
short, Wayne Harding, who was also
a CPA and who nominated me for
that award, worked with Great Plains
Software (now part of Microsoft).
I was telling Wayne about XML and
how we needed something like that
for financial reporting. He happened
to be chairman of the AICPA High
Tech Task Force (which really had
little to do with high technology,
but rather more to do with financial
reporting of high tech companies).
He invited me to Sedona, Arizona
to explain my ideas and show some
rudimentary prototypes of XML
financial statements I had created
to the task force. I did this and
two weeks later, Wayne obtained
funding from the AICPA to build a
comprehensive prototype to help
communicate the idea to some
people at the AICPA.
A few months later Wayne
Harding, Mark Jewett (an early
pioneer in XML, who helped me
create pieces of the prototype),
and I presented the idea to
several people at the AICPA.
Everyone thought the idea had
considerable merit.
The fact is that in the 10 plus
years that I have evangelized about
what was to eventually become
XBRL, no one has ever really thought
XBRL was a bad idea. There were
some differences of opinion when it
came to how the technology should
work and other details, but basically,
pretty much everyone agreed we
were doing ‘the obvious’ thing that
needed to happen.
The First Risk Takers
One of the first early risk takers to
try and make the technology work
in a real business system, was a
member of the U.S. FFIEC (Federal
Financial Institutions Examinations
Council), the U.S. Federal Deposit
Insurance Corporation (FDIC). The
FDIC was not the only regulator
working to leverage XBRL, but
they made a lot of information
about their project public. So lots
of others around the world were
watching what the FDIC was doing
and whether they succeeded in
their endeavor to use XBRL to
collect information from financial
institutions, rather than continue
with their proprietary exchange
formats. By all measures, what
the FDIC achieved was extremely
successful and they published
information about the benefits they
derived from using XBRL.
The success of the FDIC and
other projects such as the Dutch
Association of Water Boards,
brought others to the XBRL
table. In fact, some government
organizations announced
government-wide projects to save
money exchanging information
with their constituents, using
XBRL. First was the Netherlands,
then Australia, New Zealand,
Singapore and others. Central
banks such as the Bank of Spain,
the Bank of Belgium and the Bank
of France became interested in
XBRL. Tax agencies such as the
National Tax Agency of Japan
began using XBRL.
From the start, everyone
promoting XBRL knew that the crown
jewel of implementations for XBRL
was the U.S. Securities and Exchange
Commission (SEC). The SEC had
learned about XBRL early and was
tracking its progress. They watched
the progress of the FDIC project
with interest. In 2005, Chairman of
the SEC, Christopher Cox, thought
that XBRL could help improve their
EDGAR public company information
database and decided to give XBRL
a try. Again making a much longer
story short, the SEC ultimately
mandated that every public company
filing with the SEC, had to submit
XBRL, phased in over a three year
period. The SEC’s interest was the
most ambitious and challenging
implementation of XBRL to date.
The SEC’s interest in XBRL sparked
others’ interest in XBRL.
“Standards like
XBRL are fairly
boring, but can have
a very significant
impact on things
that you may never
have thought of.
”
23. vol 1 • issue 1 • april 2010 |21
“In the XBRL US Labs, we have
the ability to work hands-
on, share ideas, take things
apart and consider different
approaches – and together
we find the best solution.”
L. A. Orloff,
XBRL US Labs
Research Fellow
Manager, Product
Development, DTCC
Research and development is critical to advancing and implementing world-class standards
like XBRL. XBRL US Labs leverages the XBRL US platform, methodologies and people
through commissioned research partnerships.
Who are XBRL US Labs research partners?
Partners come from business, nonprofit or government circles, providing funding,
fellowships and internships. The Depository Trust & Clearing Corporation (DTCC) and SWIFT
have provided leadership and support for a collaborative, stakeholder-driven initiative to
standardize corporate actions documents using XBRL.
They’re helping to build a more transparent market, by creating technology that is aligned
with global XBRL and ISO 20022 standards that is free and accessible to all. SWIFT and
DTCC benefit from knowledge transfer gained from their employees working in the Labs as
research fellows.
What kind of commissioned work is taken on?
XBRL US Labs considers proposals for research topics that address the quality of taxonomies
and the harmonization of XBRL with other XML standards.
Why become a XBRL US Labs research partner?
Participate in research with a qualified, proven team of XBRL experts.•
Acquire knowledge and expertise through direct participation of your staff.•
Gain high visibility and association with the specific research•
For more information about XBRL US Labs, visit http://xbrl.us/labs or
contact research@xbrl.us.
Collaborate and Make Open Standards Happen.
Become an XBRL US Labs Research Partner.
24. | vol 1 • issue 1 • april 201022
Evolution of XBRL, Regulator
and Financial Reporting are only
a ‘Beachhead’
But those with the most interest
in XBRL thus far were regulators. Is
that what XBRL is, a standard filing
format for regulators? Each of the
regulators requiring XBRL caused
thousands and sometimes millions
of businesses to be exposed
to XBRL. For example, an early
XBRL filer to the SEC was United
Technologies Corporation. Their
use of XBRL for SEC filings helped
them better understand what XBRL
could do, so they started using
XBRL for other things within their
organization. They found, for
example, ways to leverage XBRL
to improve both their external and
internal reporting processes.
Another effect of SEC adoption
is the implementation of XBRL
within software products by
vendors, big ones, such as Oracle,
SAP and IBM, as well as others
supporting the generating of
those filings in XBRL. Also smaller
startups, who had been struggling
to create a market, now had their
market.
The regulators, who were early
adopters of XBRL, made significant
investments figuring out how to
make XBRL work well, the pieces
of XBRL which would be needed,
best practices for XBRL’s use,
technical infrastructure required,
and other things necessary to make
using XBRL effective and efficient.
All the pieces needed to make
XBRL economical for businesses in
general were falling into place, a lot
of this because of the early risks
taken, resulting in investment by
government regulators.
At the same time, more and
more business users are realizing
that XBRL is more than a standard
data exchange format for providing
financial information to regulators;
it is much, much more. The ability
of XBRL as an information exchange
standard is only one by-product of
XBRL’s real role as a global standard
approach to modeling business
semantics. These early uses of
XBRL for regulatory reporting
helped to see the true value of
XBRL as part of the Semantic Web.
And as financial reporting was
blazing an XBRL trail, people began
realizing that the two middle letters
of XBRL, ‘BR’ stood for Business
Reporting. Financial reporting was
only the beginning.
theXBRLvision
25. vol 1 • issue 1 • april 2010 |23
Charles Hoffman, a certified public
accountant, is credited as being the Father
of XBRL. He is author of the book XBRL for
Dummies (Wiley) where he shares his 10+
years of insights gained from working with and
learning about XBRL with business readers.
[After graduating from Pacific Lutheran
University in 1982, he began his accounting
career as an auditor for what was then Price
Waterhouse. Charlie worked in both public
accounting and in industry as a financial officer
for 15 years.] In 1997, Charlie was recipient of
the AICPA Innovative User of Technology Award
and was named one of the 100 influential people
in the accounting profession by Accounting
Technology magazine. In 2006, he received
the AICPA Special Recognition Award for his
pioneering role in the development of XBRL.
Currently, Charlie is the Director of Innovative
Solutions for UBmatrix Inc, and maintains a blog
about XBRL at http://xbrl.squarespace.com.
Financial Reporting Blazing Trails on
the Semantic Web
The financial reporting industry began
standardizing their metadata in the
1970’s, long before the Web or the
Semantic Web were even glimmers
in Tim Berners-Lee’s eyes. At that
time there were something like 80
different sets of financial reporting
standards being used around the
world. International Financial Reporting
Standards (IFRS) was created to
better share financial information in
a world economy that was becoming
more global in nature. Today, most
countries have already started using
IFRS or converging their local financial
reporting standards with IFRS.
IFRS and XBRL were a match made
in heaven from the beginning: IFRS
providing the semantic metadata,
XBRL providing the way to get a
computer to understand and use that
semantic metadata.
XBRL has rightly been called one
of the most successful Semantic
Web metadata formats. The SEC’s
implementation of XBRL and their
requiring IFRS to be used to file
with the SEC, is changing financial
reporting. The paper-based locally
created financial reporting rules
are giving way to the globally
agreed upon IFRS, using the
globally agreed upon XBRL syntax,
enabling the creation of one global
capital market.
Remember, it is XBRL, for
‘Business Reporting’. There are
lots of other business domains,
which will duplicate what is being
achieved by financial reporting and
the work of the U.S. SEC and other
government regulators who have
been experimenting and evaluating
XBRL. Many others are also realizing
benefits such as those realized and
published by the FDIC. That is one
reason XBRL has been easy to justify.
Boring Standards that have
a Big Impact
Standards like XBRL are fairly
boring, but can have a very
significant impact on things that
you may never have thought of.
Consider the shipping container
and how that standard impacted
not only shipping, but how
ships were constructed, where
ports were located and the
improved efficiency of the entire
transportation network including
rail and trucking. Or consider the
Universal Product Code (UPC) and
how a simple barcode impacted
the retail market, saving money
annually and impacting the entire
retail supply chain.
More recently and more
closely related to technology,
consider how the standard JPEG
digital photo format impacted
photography or how the MPEG
standard impacted the music
industry. In late February, the
Apple iTunes store celebrated its
10 billionth download of songs.
Apple in the music business? Who
would have thought.
And I won’t even get into
standards such as the PC, TCP/IP,
HTML, HTTP, XML, and the many
other technical acronyms which
enabled the creation of the global
network we now call the Web
and will call the Semantic Web,
and how all that is rewriting how
business gets done. It is not really
important to understand how all
these technical things work. We are
living the impact every day. And we
are not done yet.
We will know when XBRL has
succeeded because you will stop
hearing about it. It will silently exist,
deeply hidden within your business
systems, serving the need of our
21st century global economy. That
day is quickly approaching.
theXBRLvision
26. | vol 1 • issue 1 • april 201024
How did you personally get involved
in becoming an XBRL US Labs
Research Fellow?
LA: Having a background in
Corporate Actions and ISO
messaging, I joined as a subject
matter expert to help create the
XBRL corporate actions taxonomy.
When did you first start working in
the Lab?
LA: I started in February 2009.
What is DTCC’s role in the financial
service industry and what is your role
at DTCC?
LA: The Depository Trust
Company, or DTC, a subsidiary of
DTCC, is the U.S. central securities
depository which clears and settles
the vast majority of trades in
A Technical Perspective
On Corporate Actions
A conversation with
DTCC’s LA Orloff,
Manager, Product
Development, who spent
a great deal of time
working in the XBRL
US Lab and was named
as the first XBRL US
Lab Corporate Action
Research Fellow, and
David Hands, Director,
Product Development
at DTCC talk about their
experiences working
with XBRL US Lab on
the XBRL taxonomy for
Corporate Actions.
U.S. securities. Therefore, DTCC
plays an integral role in providing
market efficiency to the U.S.
financial services industry. As
the primary registered holder of
U.S. securities, acting on behalf
of banks and broker/dealers, DTC
has the responsibility to process
corporate actions announced by
publicly-held companies. Currently,
DTCC is undergoing a Corporate
Action System Reengineering
initiative to further enhance our
processing capabilities. An integral
part of this initiative is to move
away from proprietary data files
and communicate to clients based
upon ISO global standardized data
messaging. I work as an analyst to
develop the business data model, from
which we will generate ISO messaging
within this initiative. We are using
the same model to develop the XBRL
Corporate Actions Taxonomy.
theXBRLeffect
27. vol 1 • issue 1 • april 2010 |25
when the financial services industry
agrees to retire ISO 15022. Unlike
ISO 15022, ISO 20022 is a business-
model-based standard process for
the development of messages for
the international financial services
industry that can support different
messaging syntaxes, including XML.
How did you map XBRL to an
electronic messaging standard and
how did that differ from mapping XBRL
to US GAAP? Tell us more about the
corporate actions taxonomy and how it
differs from US GAAP?
LA: The two taxonomies are
different with regard to size and
structure. However, the interesting
point is that the XBRL corporate
action taxonomy started from
a data messaging base that has
already been created and used
by the financial services industry
throughout the globe. Add in some
additional data elements that are
specific to DTC and the U.S. market
and we end up with a comprehensive
list of data elements, and their
relationship with each other, that we
needed to apply to XBRL.
Going back to the question,
the Corporate Action taxonomy is
composed of roughly 200 elements;
however, it is complex in hierarchy
to facilitate easy navigation for the
issuer. It has built-in multiple entry
points. Depending upon how the user
responds to queries related to the
entry points:
(i) Corporate Action Event
Type (e.g. merger, dividend)
(ii) which country is the security
listed in
(iii) what type of security it is (e.g.
Equity, bond) and lastly
(iv) whether the security holder
must make elections to
receive a consideration
How long have you been at DTCC?
LA: 7 years. I worked in the Corporate
Action IT division, Derivatives Product
management and now Corporate
Action Product Management.
Approximately how many hours per
week do you spend at the Lab?
LA: It varies. The doors are always
open. Almost 24/5 with my
California-based colleagues. At the
beginning, when we had to think it
out, model and create a proof of
concept, I spent every day in the
lab for 2 months solid. Now I would
say, I average 1-3 days a week as
necessary. There is flexibility.
What has your experience been like
working in the Labs office with the
research and development team at
XBRL US?
LA: It is an excellent research and
development space. The Corporate
Actions Taxonomy has been a
challenging and interesting task.
What has really helped is to have the
ability to come to the lab and work
hands on – come up with a good
idea, share that idea, sometimes
take things apart or consider a
different approach, all to arrive at
the best solution. It has always been
a productive, collaborative dialogue,
an exchange of ideas, a process of
discoveries, and helps us lay the
groundwork for further possibilities,
beyond data processing.
What is the XBRL US workbench
that you use to build the taxonomy
and what kind of tools do you use in
your development, e.g., software for
taxonomy building?
LA: We use the taxonomy
management tool, the same one
that was used for GAAP. We also use
other commercially available tools.
Can you explain ISO messaging?
David: With the new platform
for corporate actions, we are
implementing the ISO 20022
standard’s Corporate Actions
messages to communicate
announcements, receive elections
and send payments messages with
our participants and clients.
What is the ISO messaging standard
and how did it evolve?
David: The International Organization
for Standardization (ISO) coordinates
the development of global standards
for a diverse range of products using
specific ‘technical committees’. Since
May 2009, there have been 208
technical committees covering more
than 18,000 standards, working
with 161 national standards bodies.
For example, the financial services
industry operates under Technical
Committee 68 (TC68). The first
iteration of interbank messaging
standards for corporate actions was
issued in 1984 under the standard
known as ISO 7775, followed by ISO
15022 in 1998. In January 2010,
SWIFT, in its official ISO role as
Registration Authority (RA) for the
ISO 20022 standard, released the
first version of the corporate actions
messages in the ISO 20022 standard.
Over the next few years, the ISO
15022 and ISO 20022 standards
will co-exist, until a point is reached
theXBRLeffect
“XBRL US Labs is
an excellent research
and development
space.
”
28. | vol 1 • issue 1 • april 201026
David: Data can be parsed out
of XBRL instance documents, or
converted on the fly and imported
as an ISO message. As both ISO
20022 and ISO 15022 need to
co-exist for a period of time,
they share the fundamental data
elements, structure and usage (as
defined by National Market Practice
Groups, as well as a single global
group), therefore, I would expect the
financial community will be able to
understand and consume either the
ISO 20022 or XBRL versions.
Will they have to adapt their systems
to accommodate it?
David: To some degree yes, but it
really depends on the organization,
and it will not involve anything more
than adding another ISO standard
data feed. Over the years, the
financial community has developed
a global standard, following ISO and
country-specific market practices
for data exchange in the Corporate
Actions process. As I mentioned, we
formed a taxonomy based on this
standard, and incorporated it with
XBRL flexibility, to provide usability
and easy access/transformation of
the text passages into a structured
form. This was all achieved by means
of simple document data tagging,
thus enabling the reach to the
issuer community, and ultimately
connecting us all through speaking
the same language.
What do you anticipate happening
when the taxonomy goes out for
public review? Is it important that
others contribute their expertise
during the public review?
LA: The taxonomy will reside in a
repository and will be viewable via
the taxonomy review tool, available
on the XBRL US website and on the
David Hands, Director, Product
Development, DTCC
The user will only see the
elements that are appropriate for
a specific scenario. On average
there will only be 20 – 40 elements
per event. Issuers will be guided
through to the particular event
scenario and presented with the list
of elements that applies. Depending
on the software method used, data
can be either tagged in the source
document, dragged and tagged into
the template, or used to populate
the template. This is then reviewed,
validated and filed.
Will issuers be able to use the same
software that they use for US GAAP
reporting? Are there tools on the
marketplace now that they can use?
LA: Yes. We are working with
several software vendors. To name a
few: XBRL Cloud, Clarity, Fujitsu.
How can the taxonomy be used to
create an ISO message and who uses
the ISO message?
David: Both the taxonomy and
ISO messages are XML based.
The Corporate Action taxonomy
includes ISO message elements and
associated logic. In addition, a style
sheet (XLT) is publicly available
to execute message conversion
(rearrange elements) from an XBRL
instance to an ISO 20022 Corporate
Action Notification Message, in a
matter of seconds.
ISO messaging, in the current
version ISO 15022, is used widely
by banks, brokers, central securities
depositories, data vendors and
the like, throughout the globe to
communicate corporate action
events and other information.
How will intermediaries and
investors be able to use the XBRL
data produced?
LA Orloff, Manager, Product
Development, DTCC & XBRL US Lab
Corporate Action Research Fellow
theXBRLeffect
29. vol 1 • issue 1 • april 2010 |27
joint DTCC/SWIFT/XBRL US web
page created for this initiative
which we call ‘Issue to Investor’.
We will also have a version of an
XBRL creation tool available so
that users can experiment with
actually tagging a document. The
public comment period is usually 3
months, and comments about the
taxonomy can be submitted online.
These comments are then reviewed
by the XBRL US Project team.
Who has provided input to the
taxonomy so far?
LA: Many standards and market
practice organizations have
provided valuable input indirectly
through discussions on the DTCC
and data model and the ISO
messaging standards: SWIFT of
course, the U.S. National Market
Practice Group (ISITC), SIFMA-
AMF and others. Ultimately, it
is absolutely essential to get
input from every party: issuers,
intermediaries, investors, as well
as data vendors, software vendors,
regulators, and advisors.
TAXONOMY EXTENSIONS:
Is it important to make extensions
available to issuers? How important
is it that the taxonomy has a support
and maintenance program? How
would you anticipate it changing/
evolving over time? What kind of
extensions might issuers create?
LA: Absolutely. One of the beautiful
things about XBRL is that it is able
to self evolve, refine itself through
its extensibility and model structural
flexibility in a very short period of
time. The support and maintenance
program is essential to keep
enriching the taxonomy, adapting
and responding to industry changes.
I think issuers will use extensions
for footnotes, as well as additional
information they would like the
shareholders to receive when
making an investment decision, or
anything that needs to be directly
communicated to the shareholder.
How would these extensions be used
to improve the taxonomy?
LA: Over time, extensions may
become elements enriching the
taxonomy, as well as ISO 20022, for
example making it a communications
and analytics tool and not simply
the information required for
processing through intermediaries.
Why use XBRL? Why not just XML?
LA: A problem can be solved in
many ways. The trick is to find
the most effective solution for
everyone. XML is a leap from
positional file reporting that is still
used in automated processing.
In flat file records, a computer
recognizes data elements based
on where they are located in the
record, and then uses the mapping
logic in the program to understand
it. Any modification requires
invasive surgery to the system
with coding and testing on both
sides of the communication. XML
provides a solution by having a
schema – a context map with most
of the logic outside the code. It is
a good solution, however there is
still dependency on the context – it
matters where the data is located
in the file. XBRL is a completely
revolutionary approach that is
‘context independent’. Context
is applied to data – not data to
context. Thus it does not matter
where it is located in the file. You
simply point to the data element,
‘attach’ the context and a computer
can read and process it.
theXBRLeffect
30. | vol 1 • issue 1 • april 201028
THE XBRL
CASESTUDY
- AGL
RESOURCES
XBRL has provided greater peace
of mind and transparency to the
reporting process at AGL Resources.
James Anderson, Manager, Financial
Reporting, AGL Resources, talks to
XBRLglobal about their experience
as an early adopter and the resulting
benefits the company already enjoys, as
well as the opportunities for the future.
James Anderson, Manager, Financial Reporting, AGL Resources
theXBRLeffect
31. vol 1 • issue 1 • april 2010 |29
thorough analysis of each financial
statement – with an eye on any
potential US GAAP convergence
with IFRS and determined this
was the right time to change
any line item descriptions on our
financial statements, so that
those line items were as close
to the taxonomies as possible.
We then identified the taxonomy
extensions that were required.
Our peer group hadn’t done
much research (although this
has changed a great deal since
2007); however, our involvement
in the XBRL US organization did
provide an avenue to share ‘war’
stories, and see how others were
accomplishing their objectives.
Bottom line, we determined
that the size of our company
(our market capitalization didn’t
exceed the initial $5 billion
for phase 1 filers) should not
preclude us from getting started
with planning our interactive
reporting. Our voluntary filings
have been a nice luxury as we
prepared for mandatory filings. It
allowed us to work out the kinks
before the pressure of mandatory
rules kicked in.
Also ensuring that we had
adequate validation tools was
extremely important. Acceptable
tools and procedures not only
added to our review of our data,
but affords our Controller and CFO
comfort with our submissions as
well. We utilize Excel renderings
and a ‘viewer’ that allows us
to see the interactive data in
a similar format that would be
shown on the SEC’s website.
AGL Resources’execution timeline:
• Feb. - May 2007: XBRL project planning & training
• August 2007: Joined SEC’s Voluntary Filing Program
• September 2007:
2nd Qtr. 2007 financials furnished via XBRL
(83 days after quarter-end & 44 days after Form 10-Q)
• November 2007:
3rd Qtr. 2007 financials furnished via XBRL
(47 days after quarter-end & 15 days after Form 10-Q)
• December 2007: Joined XBRL US Voluntary Filing Program Team
• February 2008:
Fiscal 2007 financials furnished via XBRL
(43 days after year-end & 6 days after Form 10-K)
• May, Aug. & Oct. 2008:
2008 interim financials furnished via XBRL
(avg. 31 days after quarter-end & concurrent with Form 10-Q)
• Oct. 2008 & Feb. 2009: Along with financials - footnotes submitted with block text
• September 2009: Early adopted interactive reporting rule
• June 2010: Level 1 tagging required for Phase 2 filers
• June 2011: Levels 2 – 4 tagging required for Phase 2 filers
Why was AGL Resources one of the
first movers for the SEC’s Voluntary
Filer Program for using XBRL for US
GAAP Reporting?
We have always felt it to be
beneficial to be ahead of the
curve when it comes to external
reporting initiatives and felt it
wasn’t a matter of ‘if’, but ‘when’
would it be mandatory. Additionally,
getting the learning curve behind
us well in advance of our first
mandatory submission was great
for our peace of mind, as we
ensure our compliance with the
SEC’s rule. This allowed us ample
time to communicate to our senior
leadership and auditors about
our project plan and to get all
stakeholders onboard.
During our planning, back in
2007, we went through a very
theXBRLeffect
32. | vol 1 • issue 1 • april 201030
We expected the first filing would
take the longest, with the most
amount of preparation. Beginning
in September 2007, our first
XBRL submission – was submitted
44 days after the filing of our
Form 10-Q. Our second XBRL
submission in November 2007
occurred about 2 weeks after the
filing of our 3rd Qtr Form 10-Q;
and subsequently all of our interim
submissions in 2008, 2009 and
2010 were done concurrent or
on the same day as our Forms
10-Q /10-K filing. So from six
weeks after our HTML filing, to
two weeks, to concurrent – each
subsequent XBRL submission was
faster than the last. Through our
repetitive efforts, a more efficient
submission schedule evolved.
Have there been any long term
advantages for AGL Resources?
That is still an incomplete answer.
We are looking forward to the
SEC’s expanded use of interactive
reporting as it pertains to the
proxy. These expanded uses will
continue to broaden the reach
of XBRL within the investment,
analyst and corporate users.
Additionally, as more companies
get their disclosures on file, it
will allow more historical and
comparability uses by the
investment community. At AGL
Resources, as we plan for levels
2 – 4 tagging, which is required in
June 2011, we don’t want those
tagging procedures to be a bolt-
on initiative to our existing ledger
system. This is expected to result
in more efficient reporting efforts.
Does AGL Resources manage this
process internally or outsource?
What have been the advantages
and disadvantages? What external
resources were most useful to you
and why?
We do all HTML and XBRL SEC
filings internally. In 2002, we
decided to bring the HTML
conversion and filing tasks in-
house. This was done primarily
for three reasons. Firstly, we are
saving approximately $100,000
annually (2003 prices) in filing fees,
compared to less than $3,000 in
software renewal fees. Secondly,
and probably more importantly, we
have gained ‘control’ of the steps
and are definitely able to implement
last minute disclosure changes more
efficiently. Finally, it has required
that we own the details and not
outsource the ‘how-to’ component.
We can speak much more effectively
about the mechanics. Accordingly,
when we decided to join the
“We have found
advantages in doing
the vast majority of
the work in-house.
”
theXBRLeffect
33. vol 1 • issue 1 • april 2010 |31
as we implemented our interactive
reporting initiatives. Additionally,
this hasn’t resulted in any different
types of talent needing to be
requested when filling job openings.
However, we are still determining our
next steps when the next levels of
tagging become mandatory. It isn’t
clear if we will need more headcount
– perhaps even a dedicated person
tasked with XBRL compliance.
Have you seen or will you be using
XBRL for your General Ledger
reporting? Have you found any
other internal processes that could
see value out of utilizing XBRL?
Have you seen the value of bringing
together AGL Resources’ global
offices by implementing XBRL?
We haven’t used XBRL for general
ledger reporting. Going forward,
as discussed earlier, and as we
continue our planning for the
remaining tagging levels, we do
expect our interactive reporting
to become more integrated with
our systems. I have discussed
XBRL with some of our other
departments, such as the treasury
and investor relations, who can
more effectively pull our historical
data into various modeling
spreadsheets. This will eliminate
a lot of manual effort. The
conversation continues….
How has the level of support for
XBRL GAAP Reporting grown in the
last couple of years?
As more companies start filing,
I think its benefits will become
more apparent. It will allow
for more comparability both
by analysts and investors.
Additionally, it will become more
‘mainstream’ and I predict will
replace HTML as the method
that the SEC currently accepts
information from registrants.
voluntary filer’s program in 2007,
it was a natural extension of our
existing core responsibilities to
perform the interactive reporting
in-house. The same advantages for
HTML apply to XBRL.
Last year, prior to our early
adoption of the interactive reporting
rule, we discussed our plans with
PricewaterhouseCoopers (PWC) – our
auditors – and they indicated their
preference for involvement with
our interactive reporting, which is a
courtesy review.
Lessons learnt at AGL Resources
through the process? What have
you seen as the advantages /
disadvantages as compared to
managing the process internally?
For us, the old adage, ‘practice
makes perfect’ certainly has
held true. We continue to work
through enhancements with
our procedures. Incorporating
interactive reporting within your
quarterly reporting checklist
does take some adjustments.
We continue to keep our CFO,
Controller and auditors informed.
As described above, we have
found advantages in doing the
vast majority of the work in-
house. We haven’t stopped our
efforts to engage our industry
on the benefits of XBRL, which
we see as a way to broaden our
understanding of the ways to
expand the use of this reporting
tool and its use by the investment
community. In the last two years,
along with our work with XBRL US,
we have participated in American
Gas Association and National
Investor Relations Institute forums.
How has XBRL changed the way AGL
Resources reporting is structured.
More resources, less resources,
different resources?
We have not added any additional
headcount over the last three years
theXBRLeffect
34. | vol 1 • issue 1 • april 201032
XBRL US is the standards organization that built the US GAAP Taxonomy by bringing together accountants,
standards organizations, technologists, regulators, and analysts to create an industrial-strength taxonomy
and the tools to analyze public company XBRL filings, including a common set of rules to identify and
correct over 6,000 potential inconsistencies in public company XBRL filings.
We analyzed hundreds of XBRL filings and uncovered thousands of errors related to the use of the US
GAAP Taxonomy. Now you can run this same set of rules automatically against your XBRL financials to
identify and correct potential issues before you send them to the SEC. It identifies potential problems such
as incorrect signs, missing concepts or concepts used inconsistently with the XBRL US GAAP Taxonomy.
XBRL Consistency Suite provides a roadmap on how to best use the XBRL US GAAP Taxonomy so that you
create consistent, high-quality XBRL data. Software that performs SEC Edgar Filing Manual validation will
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The XBRL Consistency Suite also includes analytical tools that can be used before you begin developing
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35. vol 1 • issue 1 • april 2010 |33
Identify and correct...
P Data inconsistencies
P Incorrect signs + -
P Missing concepts
P Formatting errors
36. | vol 1 • issue 1 • april 201034
Implementing
the RECOMMENDATIONS
The UK’s tax and customs authority, HMRC (Her Majesty’s Revenue & Customs)
is implementing XBRL, and Mark Holden, Director of HMRC’s Carter Programme,
highlights the rationale and benefit that the organisation is already seeing.
theXBRLeffect
37. vol 1 • issue 1 • april 2010 |35
I
am delighted to be able to
contribute this article about the
way HMRC is moving forward with
our Corporation Tax online service
and XBRL and I thought it might be
useful to start with some background
to what we are doing, and why.
In 2005, the Government asked
Lord Carter of Coles to lead a review
into HMRC’s online filing services.
Lord Carter was asked to advise
on measures that would increase
take up of key online services for
Self Assessment, VAT, PAYE (Pay
As You Earn) and Corporation tax
(CT). He was also asked to make
recommendations about a timetable
for implementation that would be
manageable for our customers,
but that also realised the benefits
of online filing as soon as was
practicable. In March 2006 Lord
Carter produced his report containing
29 recommendations in total, all of
tremendously proud that we were
able to bring this service in early,
which was also something that Lord
Carter recommended HMRC should do
with all new services.
A move to XBRL provides far
greater flexibility than exists with the
document format our staff have to
work with now, which is typically in
PDF, online in HTML, or even worse
on paper! It is still an essential part
of our day to day work that our
people are able to read accounts and
computations and so we decided to
use inline XBRL (iXBRL). This variant
of XBRL is ideal for us, because
apart from making XBRL readable
by humans, it also guarantees that
the layout and presentation of the
information is preserved so that it
looks exactly the same to the author
or the person receiving it, regardless
of whether it is viewed online, or
printed off.
The move away from paper or
PDF’s to interactive data using
XBRL provides us with some
obvious benefits. XBRL is far more
flexible than static content and at
the moment, if our staff want to
analyse or compare data over a
number of years or across connected
companies, this would invariably
involve them inputting considerable
time and effort as they review
papers or struggle with comparisons
on screen with PDF’s. We will be
introducing software soon that will
allow them to read the iXBRL data on
screen and manipulate and annotate
that information as they see it on
their computer. Once our XBRL
Mark Holden, is the Director of
HMRC’s Carter Programme, which has
been tasked with implementing the
recommendations made in Lord Carter
of Coles 2006 report on HMRC’s
Online Services
which were accepted by Government.
One of the recommendations
made for business tax was that all
companies should be required to file
their company tax returns online,
using XBRL and make payments
electronically, for returns due
after 31 March 2010. Following
consultation we agreed to push
back the original deadline to after
31 March 2011 to allow businesses
more time to prepare. In January this
year, new legislation came into force
which means that for accounting
periods that ended after 31 March
2010, company tax returns must
be filed online from 1 April 2011
and the accounts and computations
which form part of the return, must
use the iXBRL format, and payments
made electronically.
HMRC was already working on
enhancements to the CT online
service that would allow us to receive
accounts and computations in XBRL,
rather than the more cumbersome
PDF which was typically used to
attach them to the online submission
of the return. We successfully
introduced our new CT Online filing
service in November 2009, on
time and within budget. This new
service allows companies to file their
Company Tax Returns using iXBRL
for their accounts and computations.
At this point in time, companies can
still choose to send their accounts
and computations by attaching
PDF’s but we are now working hard
to encourage companies to try this
service as soon as they can, rather
than wait until the last minute. I am
theXBRLeffect
“A move to XBRL provides far greater
flexibility than exists with the document
format our staff have to work with now,...
”
38. | vol 1 • issue 1 • april 201036
data starts to build up, we will be
able to perform all those analytical
tasks with relative ease, and to a far
greater extent than we can by hand.
This has obvious benefits by way of
HMRC staff being able to focus their
minds on higher value activity and of
course is a much better use of our
resources, but it also means that we
will be able to make more accurate
interventions with companies, that
will save not only HMRC, but also the
company, time and money.
For many companies and
professionals, iXBRL was
something of an unknown quantity
and understandably they had
reservations and concerns about
how they might cope with the
changes they were facing.
We have worked very closely
with software developers and there
are already some products on the
market that can deliver the return in
a fully iXBRL compliant way, but we
know that many developers plan to
bring new products to market in the
coming months and that will mean
that companies and professionals
alike have a range of options
available to them, so that they can
select the best solution for their
circumstances. Just as importantly
though, this means that we are
able to reassure our customers that
they do not have to worry about
iXBRL because the software will do
the work for them. We have also
introduced free HMRC software
in the form of a downloadable
application that can be used by
companies with less complex affairs,
to send their company tax return to
us in the correct format, and again,
customers that use this software,
don’t have to worry about iXBRL.
Another of Lord Carter’s
recommendations was that HMRC
should work with Companies House
to provide a joint filing facility. In
September 2009 both organisations
issued a joint statement about
this to reinforce their commitment
(see www.hmrc.gov.uk/ct/ct-online/
joint-filing-statement.htm) and we
theXBRLeffect
“We recognised early on that many of the
country’s largest companies would have
particular needs and that we would have to
adopt a different strategy to make sure we
gave them the support they wanted.
”
