10 Things A Young Cpa Should Know About Xbrl

10 Things a Young
CPA Should know
about XBRL

Conor O’Kelly BComm, FCA, M.Sc

Vice Chair, XBRL International
Dublin, Ireland 25th Feb 2010

XBRL for Young CPAs February 2010

10 Things a CPA Should Know About XBRL

1. What is XBRL?
2. What are the benefits of XBRL?
3. Adoption Drivers
4. XBRL and IFRS
5. The Evolution of the Web and Its Impact on Business Reporting
6. Technology Best Practices and the Annual Report
7. Finance 3.0 and Mobile Computing
8. Developments in UK and Ireland
9. Key Readiness Challenges
10.How do I join the conversation?


1. What is XBRL?
 XBRL is a language for the electronic communication of
business and financial data. It provides benefits in the
preparation, analysis and communication of business
information. It offers cost savings, greater efficiency and
improved accuracy and reliability to all those involved in
supplying or using financial data.

 XBRL stands for eXtensible Business Reporting Language. It is
one of a family of "XML" languages which is becoming a
standard means of communicating information between
businesses and on the internet.

 XBRL is being developed by an international non-profit
consortium of approximately 600 major companies,
organisations and government agencies. It is an open
standard, free of licence fees. It is already being put to
practical use in a number of countries and implementations
of XBRL are growing rapidly around the world.


1. What does it mean for me?

All stakeholders in the financial
reporting supply chain are now engaged
in the discussion on XBRL including
governments, regulators, preparers and
consumers of business information.

CPAs awareness in the Americas, Europe
and Asia is increasing amongst the
preparer community who must now
develop engagement strategies.

4 XBRL for Young CPAs February 2010

2. What are the benefits of XBRL?..
For business…
 Reduction in the administrative burden (i.e. cost) of providing data to Government
 Streamlined process of passing/aggregating data across different internal departments,
offices or business units of a company.
 Increased interoperability of finance applications:
 Connect disparate accounting packages together more easily (especially across different
accounting areas)
 Increase the ability to switch software providers in the future
 Increased ability to change providers of filing services (where used) driving increased
competition for business and lower charges.
 Better interaction with the banks for loan applications and risk systems:
 Bank loan businesses money and request financial information at the inception of the
loan and throughout the loan cycle
 Improved data quality (less errors due to less manual intervention).
 Avoidance of fines for non-compliance with a mandatory request to provide data.

Source: OECD Forum on Tax Administration: Taxpayer Services SubGroup Guidance note Standard Business Reporting July 2009
http://www.oecd.org/dataoecd/36/52/43384923.pdf

• Cut costs of tax preparation, tax calcs, tax effect accounting by 25 -
33%
• Better analysis of client information
• Less time spent on ‘data drudgery’
• Reduce Costs, Speed Cycle Times and Improve Accuracy
• Improved staff engagement and satisfaction
• Applying a taxonomy based approach drives new services such as:
• Web based benchmarking and Business Intelligence
• Online Accounting and STP for Compliance
Peter William, CEO Deloitte Digital

XBRL-enabled workflow in tax department

Accounting practices that make their money from cut & paste of data
should be warned that the writing is on the wall. Their days are
numbered ...” Mark Tobin, Taxation Partner, Deloitte Melbourne Australia.


3. XBRL Adoption Drivers
 Economics
◦ EU Action Programme to reduce admin burden by 25%
◦ Compliance efficiencies / effectiveness – SBR programs
 converge towards global standards through the IMF, FSF, the
Basel committee and G20 processes.
 IFRS Adoption and GAAP convergence
 Capital Market Transparency – US SEC Mandate, European
Commission, China CSRC
 Alignment in Regulatory Consistency
 Integration with other standards- ISO, W3C, Swift, OECD


3. XBRL Adoption Drivers- Basel II Banking Supervision
The Basel Committee on Banking Supervision provides regular
cooperation on banking supervisory matters designed to ensure that a
bank holds capital reserves appropriate to the risk the bank exposes
itself to through its lending and investment practices. Ensuring capital
allocation is more risk sensitive; Separating operational risk from
credit risk, and quantifying both; align economic and regulatory
capital more closely to reduce the scope for regulatory arbitrage.

•XBRL Adopted by US FDIC for US Banking Quarterly Call Reports

•Feb09- Committee of European Banking Supervisors (CEBS)
published work plan outlining priority activities to establish the
framework for harmonised supervisory reporting by 2012, in
conjunction with CEIOPS. Priority activities includes developments to
both the COREP (COMmon REPorting) and FINREP (FINancial REPorting)
taxonomies.

•Oct2008 Reserve Bank of India launch XBRL Basel II reporting for
Indian Banking Sector .

•Emerging Basel II XBRL projects in South America, Chile, Brazil,
Argentina, Colombia, Mexico and Asia


3. XBRL Adoption Drivers- Europe: Reducing
Administrative Burden
January 2007: Commission presents Action Programme
(AP) for reducing administrative burdens on businesses in
the EU by 25% in 2012. It is part of its Better Regulation
strategy.

AP is endorsed by the European Council which agreed to a
25% reduction target for burdens originating in EU law and
invited Member States to “set national targets of
comparable ambition.”

The EU reduction target covers Community legislation and
related national transposition measures.

A 25% reduction of AB in the EU could yield € 150 bn in
the medium term (an increase of EU GDP of 1.4%).

The project will take 18 months. The project started in
Sept 2007.

The results reviewed by the European Council March 2009.

EU Action Programme for Reducing Administrative Burden

http://ec.europa.eu/enterprise/regulation/better_regulation/docs/gjk_actionprog_170108.pdf


3. XBRL Adoption Drivers- Europe, Market Regulation
Oct2008- EU President Barroso appointed High
Level Group on Financial Supervision in EU
aiming to promote e-gov and identify best practices in IT use in order to
enable the EU to contribute to international and multi-national initiatives.
The group are encouraging the Commission (and Member States) to
consider a ‘pull model – once only’;

European Parliament (EP) resolution of 21 May 2008 – a call for the EC to
encourage Member States to harmonise the classification of financial
information and promote the use of new technology, such as XBRL;
Council meeting of 7 November 2008 – aiming to promote common
standards between financial centres, more transparency and
comprehensive information systems, and reformed multilateral
surveillance.

26 January 2009 - EC announced plans to revise the operational framework
and decision-making processes of the Committee of European Securities
Regulators (CESR), Banking Supervisors (CEBS) and Insurance &
Occupational Pensions Supervisors (CEIOPS ). Seeking to safeguard
financial stability by improving supervisory co-operation, the decision also
proposes provide direct funding to those committees and to key
international financial reporting and auditing standard-setting bodies,
namely the IASC Foundation, the European Financial Reporting Advisory
Group (EFRAG) and the Public Interest Oversight Body (PIOB). The proposal
is now in the co-decision procedure for approval by the EP and the Council.

XBRL Europe endorses the position of FEE regarding the setting up of
“harmonised rules” and specifically the “fundamental review of the Basel 2
rules” and the extended use of the IFRS (comment N°25)
High Level Group on Financial Supervision in EU – De Larosiere Report (Feb 2009) XBRL for Young CPAs February 2010
http://ec.europa.eu/internal_market/finances/docs/de_larosiere_report_en.pdf

3. XBRL Adoption Drivers-
US Securities and Exchange Commission
Requires submission of XBRL-formatted financial statements and
financial statement schedules via an ‘XBRL Exhibit’ for annual,
quarterly filings and registration statements (and via posting XBRL
Exhibit on corporate website)
‘Disclosure neutral’

Phase-in, however early adoption is permitted:

Domestic and foreign large accelerated fliers using US GAAP with a
worldwide public float of greater than $5 billion (at Q2 of most recent
completed fiscal year) - beginning with a periodic report on Form 10-
Q, Form 20-F or Form 40-F containing financial statements for a fiscal
periods ending on or after June 15, 2009.

Remaining large accelerated filers using US GAAP – beginning with a
periodic report on Form 10-Q, Form 20-F or Form 40-F containing
financial statements for a fiscal period ending on or after June 15,
2010.

All remaining smaller domestic filers as well as foreign private issuers
using IFRS – beginning with a periodic report on Form 10-Q, Form 20-
F or Form 40-F containing financial statements for a fiscal period
ending on or after June 15, 2011.

http://WhiteHouse.gov
http://USA.gov
http://Recovery.gov


3. XBRL Adoption Drivers –
Standard Business Reporting (SBR)
Multi-agency program to reduce the reporting burden by 25% or
more by:

•removing unnecessary/duplicated information from govt forms
•adopting a common reporting language, based on international
standards and best practice providing business with a single
secure online sign-on to the agencies involved
•utilising business software to automatically pre-fill government
forms
•providing an electronic interface to enable business to report to
government agencies directly from their accounting software,
which will provide validation and confirm receipt of reports
-making financial reporting to government a by-product of
natural business processes.

Emerging as a governmental compliance best practice in:
- Govt of Netherlands SBR Project
- State Controllers Office, State of Nevada
- Danish Commerce and Companies Agency (DCCA),
- Govt of New Zealand SBR
- Govt of Australia – Dept Treasury
- Singapore SBR
- Government of Ireland eGov policy
- Government of Poland
- United Kingdom HMRC/Companies Hse joint filing
- Ministry of Corporate Affairs India
- European Commission driving SBR “joint filings” projects in EU
countries- Belgium, Denmark, Ireland, UK, Estonia, Lux, Poland,
Italy



By 2011 every listed company in China, Japan and the US will have
to report to its securities regulator using XBRL. A very significant
number of financial institutions in EU member states must report
in XBRL for supervisory purposes.

Every company in Spain, Belgium, Singapore and Denmark either
produces its annual accounts in XBRL or will do so by 2011.

Within the next 12 months, every business in Australia and the
Netherlands will be able to file its tax, statistics, and accounting
returns in XBRL.

In 2011, every UK company will file its financial statements to the
tax regulator using Inline XBRL. The IASCF has made XBRL
taxonomies available for the accounting standards that are
approved for use in 110-120 countries.


4. XBRL and IFRS
NO
SE
FI
NL DE
CZ
IAS DK
LU PL RU
B HU
CA SI
UK
AT
UA
IE
BE
RO TR
US ES IT
CN
FR
PT
LB JP
KR
CH
IN
MT
Established XBRL   VZ HK
Jurisdictions AE
CO SG MY
Provisional  XBRL
Jurisdictions BR

XBRL Projects
Ongoing
AU
ZA

NZ
AR

Countries that require or permit IFRSs

Countries seeking convergence with the IASB on pursuing adoption of IFRSs


4. XBRL and IFRS

Sept2009: published for public comment an exposure draft of
the IFRS for SMEs Taxonomy. The Taxonomy is a complete
translation of the International Financial Reporting Standard
for Small and Medium-sized Entities (IFRS for SMEs) into XBRL
(eXtensible Business Reporting Language).

Sept2009: Release of IFRS Taxonomy 2009 labels in Dutch

Aug2009: Release of IFRS Taxonomy 2009 labels in Italian

July 2009: Release of IFRS Taxonomy 2009 labels in French
Jan2009 the IASC Foundation released the near final version
of the IFRS Taxonomy 2009 for public comment.

26 Feb09 -released its IFRS Taxonomy Module Manager
(ITMM) for open source.

Feb2009 the IASC Foundation released the simplified Chinese
translation of the complete label linkbase for the IFRS
Taxonomy 2008,

Jun2009: released new support materials for the IFRS
Taxonomy 2009 and Arabic and Spanish translations


Context rich US GAAP and IFRS GAAP XBRL taxonomies issued by
FASB and IASB including calculation, presentation, reference
(GAAP) and language link-bases will supplement and may replace
traditional paper bound volumes and become the de-facto
standards for electronic business reporting.
These taxonomies will become embedded into ERP systems, data
warehouses, accounting systems and desktop reporting toolsets
to produce XBRL financial reports.


5. The Evolution of the Web and Its Impact on
Business Reporting


..how we consume business data is changing
with technology and consumer media trends


..Web2.0 reduces time to market lead time for
financial reporting


Web2.0 and Social Media are widely used in business
networking, sharing information and building business
relationship…but it lacks semantic intelligence


Web 1.0


Transparency accountants XML XSLT adoption emerging
nations align analysis analysts assurance auditors audit-
committee benefits semantic-web G20 codification committee
AJAX company complex contact copyright CFO corporate data
XSB download dynamic IFRS enterprise exchange

Finance 3.0 executives extensible fasb filings
financial forms-free GAAP SOA hosts http iasb ima improves
india industry information stylesheet interactive international XII
internet investors ireland webservices mobile language licence
global RSS Atom Cloud-Computing Offshore Outsourced GAAP
versus IFRS US-GAAP
Crowd-sourced Realtime Assurance XBRL OpenSource Social-
Media CSR sustainability XHTML interoperability standards
convergence

Technology is transforming the dialogue we
have we our stakeholders. Traditional
distribution channels for business reporting
are being replaced with interactive digital
media.

The current generation of web based
financial reporting is being replaced by
XBRL-enabled semantic web


6. Technology Best Practices and the Annual
Report



XBRL tagged data will underpin the financial statements, be context
rich, interactive and offer enhanced user experience along with
reduced cost to produce.

Internal XBRL taxonomies developed by Internal Audit will drive
analytics-driven business intelligence and telemetry , incorporating
calculation and disclosure rules, materiality thresholds and corporate
governance requirements. This will provide a toolset for continuous
control measurement and real-time auditing which is embedded into
the rest of the enterprises business reporting model.

In this way XBRL will lower audit (internal & external) costs by
providing the CFO with a risk model incorporating corporate
governance, operational controls, regulatory compliance and GAAP
based financial reporting


7. Finance 3.0 and Mobile Computing


Web3.0, semantic web,
XBRL and will be a
disruptive force within
business reporting and
continue to drive
transformation within the
finance department and
CPA firms in the coming
years.
Mobile applications will
begin to store your XBRL
data in the cloud as
opposed to on the mobile
device, and the
applications will become
more powerful as
processing power is also
offloaded to the cloud.

37 24 February 2010 XBRL for Young CPAs February 2010

8. Developments in UK and Ireland

Éire United Kingdom
Irish Government endorses adoption of From April 2011, all companies are required to
mandatory electronic filing along with XBRL make a Company Tax Return will have to:
financial statements.
- file their company tax returns online for all
Companies Registration Office (CRO) and returns delivered after 31 March 2011 for
Revenue Commissioners to work closely accounting periods ending after 31 March 2010,
together and to engage with accountancy bodies using a specified XBRL data standard for accounts
to produce a cross-agency result which can be and computations and pay their Corporation Tax
replicated by other Government agencies. electronically.

The High-level Group also suggests that -any returns filed online with accounts and
companies file accounts once through XBRL computations sent as Portable Document Format
(PDF) attachments – all returns delivered after 31
DETE believes that by introducing a March 2011 for accounting periods ending after 31
simultaneous return date to CRO and Revenue, March 2010, must be filed using a specified XBRL
by phasing in mandatory e-filing, including (iXBRL) data standard for accounts and
accounting data in XBRL-format, and by computations.
ensuring that agencies can cross-access data,
the burden on Irish business will be The filing and electronic payment requirements are
considerably reduced. defined in the draft regulations and directions,
which provide further detail on a number of areas
within the regulations, on the HMRC website.

https://online.hmrc.gov.uk/information/faqs/corporationTax?faqid
=eng.faq.largecompanies.faq.faqct068&affinitygroup=


HM Revenue & Customs (HMRC) is implementing Lord
Carter's recommendations to increase online filing
which were accepted by Government at Budget 2006.

The recommendations include compulsory
requirements for businesses to file their Company Tax
Returns online and to make Corporation Tax payments
electronically.

These regulations amend the Income and Corporation
Taxes (Electronic Communications) Regulations 2003
(S.I. 2003/282, amended by S.I. 2005/3338). These
amendments will provide new compulsory rules for
Corporation Tax as follows:

•online filing of Company Tax Returns using XBRL
standard for all returns delivered after 31 March
2011 for accounting periods ending after 31
March 2010

•electronic payment of all Corporation Tax
liabilities after 31 March 2011


9. Key Readiness Challenges.

 Raising awareness- understanding XBRL and what problem it
solves
 Implementation Options – time spent planning your
implementation project will save time later
 Selecting Software- XBRL is an evolving technologies.
Software options are varied and evolving quickly
 Mapping Data – the mapping of data to taxonomies needs to
be understood and practiced
 Visualising the Data- different regulators may require
different options to make XBRL human-readable
 Quality Assurance- a blended skill-set of technology , XML
languages and financial knowledge is required to ensure
quality of your filings- build your team accordingly


1. Get involved early
2. Understand what XBRL is and how it will
impact you
3. Build the right team
4. Evaluate your strategies
5. Embrace technology as a change agent
6. Understand the overlaps between
accounting skills and technology


10. How do I join the conversation?


About the Author

Conor O'Kelly is 1st Vice Chairman of XBRL International, the
non-profit consortium of over 600 members developing the
XBRL Standard and a member of the XBRL International Board
of Directors.
He is the past Chairman of XBRL Europe, the consortium of
European XBRL Members , past Chair of XBRL Ireland and
represents Ireland on the International Steering Committee of
XBRL International.
He is a Fellow of Chartered Accountants Ireland with an MSc
in IT Management . He has twelve years background in global
IT managed services outsourcing, global project management
and strategic IT business planning with Hewlett Packard and
Ericsson.
Mr. O'Kelly is a past member of Council of Chartered
Accountants Ireland.


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