Advanced Accounting Information Systems

1
Advanced Accounting Information Systems

• Day 30
• Introduction to XBRL
• November 4, 2009

2
Announcements

• First XBRL assignment for early filers due today
  (11/4) for all others due Friday
• Graduate student paper topics
• Midterm progress

3
Objectives

• Obtain an overview understanding of XBRL and its
  role in computerized financial and business
  operations reporting
• Understand key terms such as taxonomy, instance
  document, markup, and meta-data
• Understand key aspects of SEC filing program
• Understand the XML document foundation
• Describe differences between XML and UBL

4
Question for today

• What is meta-data?
• How does XML differ from XBRL?

5
Question for today

• What is a standard taxonomy?
• What is an instance document?

6
Difference between HTML and XML and XBRL

• HTML
• Tags provide presentation information
• XML
• Extensible adding meaning to data and storing
  and processing it as information
• As long as you follow the rules, you can extend
  or add to tags
• Markup
• Surrounding pieces of data with tags that add
  meaning

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INTRODUCTION FINANCIAL REPORTING SYSTEM
XBRL(XML)
Web(HTML)
Provide a standard method for preparing,
analyzing, and exchanging financial information.
Limited accessibility
Not allow data exchange,intelligent search,
andadaptive presentation
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INTRODUCTION FINANCIAL REPORTING SYSTEM
Cash 50000 Debt 10000
Cash 50000 Debt 10000
Cash 50000 Debt 10000
ltBgt Cash 50000 lt/Bgt ltIgt Debt 10000 lt/Igt
Cash font-weight bold Debt font-style
italic
ltCashgt 50000 lt/Cashgt ltDebtgt 10000 lt/Debtgt
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XBRL BASICS

• Instance document
• XML file that contains business reporting
  information and represents a collection of
  financial facts and report-specific information
  using tags from one or more XBRL taxonomies
• Element A financial reporting concept, defined
  in XBRL
• ContextEntity and report-specific information
  (reporting period, segment information, and so
  forth) required by XBRL that allows tagged data
  to be understood in relation to other information
• Taxonomy
• Electronic dictionary of business reporting
  elements used to report business information
• Standard taxonomyDeveloped for U.S. companies by
  XBRL.US
• Taxonomy extensionsCreated by individual
  companies

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XBRL BASICS
Cash and Cash Equivalents 35,000
Dictionary
Human readable format
Data (Content) Machine readable format
Rendering (Presentation)
11
WHAT DOES XBRL LOOK LIKE?
With XBRL, each item of a companys reported
information is tagged with a unique code
identifier.
12
HOW XBRL WORKS
13
MANDATE BASICS

• SEC rule proposal May 30, 2008
• Adopted by SEC on December 17, 2008
• Basics of the rule
• Required primary financial statements (PFS) and
  footnotes for all issuers using US GAAP/IFRS for
  periods ending June 15, 2009 or later
• Year 1 all large accelerated filers (worldwide
  equity float above 5 billion)
• Year 2 all other accelerated filers
• Year 3 all others
• First year PFS plus block tag footnotes
• 2nd year include detailed tag footnotes
• 30 day grace period for first filing of PFS and
  detailed footnotes

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XBRL

• Emerging technology under the auspices of XBRL
  International
• Used to tag each piece of financial and business
  operations information in a standard way so that
  it can be validated, stored, and processed by
  computerized applications
• XBRL specifications
• Standard taxonomies
• Instance documents
• Metadata
• Adds meaning to data

15
Why is XBRL Important?
16
Brief History of XBRL
17
EVOLUTION OF XBRL A HISTORICAL PERSPECTIVE
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Glossary of New Terms Chapter 1

• EDGAR
• FDIC
• FFIEC
• Instance documents
• Meta-data
• XBRL
• XBRL Specifications 2.1
• XBRL taxonomies
• XML

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XML Document Foundation

• XML vocabularies discussed in class
• Universal Business Language (UBL)
• XBRL
• Design goals of XML
• Usable over the Internet
• Support a variety of applications
• Preferred way to move data between software
  applications on a computer network
• Be human-readable
• XML documents
• Contain tagged items of data and conform to
  specific rules and syntax that make them
  processable by all XML-enabled software
  applications
• Well-formed XML documents contain tags and data
  items in a nested hierarchy

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UBL

• UBL 2.0
• XML vocabulary that defines the structure and
  contents of common business documents
• Catalogue, Order, Invoice, Remittance advice,
• Reusable data components that appear in them such
  as ID, Name, IssueDate, and Item
• UBL Catalogue
• Business document that describes items, prices,
  and other details about products or services
  available for sale
• See Figure 2.1 and 2.2

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XML Document Foundation

• XML documents
• Contain tagged items of data and conform to
  specific rules and syntax that make them
  processable by all XML-enabled software
  applications
• Well-formed XML documents contain tags and data
  items in a nested hierarchy
• Element
• Tag set and its contents
• Matching beginning and ending tag name along with
  its content
• Root element
• Parent of the entire XML document

22
Rules for Well-formed XML Documents

• An XML document can have one and only one root
  element.
• All elements must have matching beginning and
  ending names, and XML is case sensitive
• Elements can contain attributes that add
  information about a specific element and appear
  following the beginning element name
• All elements must be properly nested

23
Purpose of Basic Rules for XML Documents

• Provide foundation for the creation of
  humanly-understandable tags (element names) to
  markup data items with descriptive metadata
  (data about data)
• Provide structure that enforces a strict
  hierarchy that results in very efficient computer
  processing

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UBL Catalogue

• Open-source software standards for e-business and
  Web services
• Created by OASIS
• Provides complete XML-based library of business
  documents to be used in e-business transactions
• Reusable data components
• Standard way business can encode in
  computer-readable form the information necessary
  to describe the products and services it has
  available
• Can be rendered as a printed document or a Web
  page
• Can also be transmitted from seller to potential
  buyer via Internet

25
UML Prolog and Documentation Statements

• Like all XML vocabularies, UBL has its own rules
  and guiding principles
• Prolog
• All XML documents start with a prolog
• Processing instructions to be used by an XML
  processor and additional information such as
  documentation and structure information
• All XML document prologs start with an XML
  declaration and version information
• lt?xml version1.0 encodingUFT-8?gt
• 8 bit Unicode preferred encoding schem for
  email and web pages
• Documentation statements
• Can appear anywhere in an XML document
• Always in form lt! - -Documentation statement - -
  gt

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Beginning root element name

• Always the first tag in XML document AFTER the
  prolog
• Also referred to as the document element)
  because it contains all of the documents other
  elements nested within it
• ltCataloguegt
• lt/Cataloguegt
• XML document always starts and ends with its root
  element name
• Choose name carefully
• Need to be descriptive about the contents and
  purpose of the XML document
• Xbrl root name is ??

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Practice

• What are the child elements of the PostalAddress
  element shown in Figure 2.2?

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XML Attributes

• All XML elements can have one or more attributes
• Contained within the beginning element name
  brackets (ltgt) and further explain the meaning of
  an individual element
• Have their own name and a value in the following
  format
• AttributeName attribute Value
• PriceAmount
• Used in each Price element
• Rerquired to have a currencyID attribute

29
Practice

• How would you interpret the data in the ltPricegt
  element within the second ltCatalogueLinegt
  element?

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Rules for UBL documents

• Each has unique root element chosen to correspond
  to documents purpose
• Each has required ID element to uniquely identify
  document and IssueDate element to fix it in time
• Each has two party elements appropriately named
  for purpose of document to identify
  provider/supplier and customer/buyer parties to
  document
• Each has at least one line element appropriately
  named for purpose of document. Each line element
  is required to have ID element and appropriate
  item information

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XML and UBL in Business
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Summary

• XML documents
• Used in business to store and transmit data
• Contain data tagged with meaningful XML
  elements (metadata) in a strict hierarchy
• Basic unit of information in an XML document is
  an element
• Consists of beginning and ending element name,
  attributes, and data values or other elements
  nested within it
• All well-formed XML documents follow a basic set
  of rules (help standardize XML documents so they
  can be efficiently processed by software
  applications)
• One and only one root element
• Matching beginning and ending element names
• All elements can contain attributes
• All elements must be properly nested

33
Glossary of New Terms

• Attributes
• Electronic data interchange
• Element
• OASIS
• Open-source software standards
• Prolog
• Reusable data component
• Root element
• UBL vocabulary
• Valid XML documents
• Well-formed XML documents
• XML web services

34
Questions for Friday

• What is the purpose of the XML schema language?
• Distinguish between Namespaces and XLink?