Australian Tax Office XBRL Adoption Process

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Australian Tax Office XBRL Adoption Process
Recommendations

• Keith Finkelde - bREX
• keith.finkelde_at_brex.com.au
• 61 403 167 24
• With approval of the
• ATO Interface Standards Team
• May 2004

Full documentation available at www.ato.gov.au/rs
f then Consultative Forums and Interface
Standards
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Presentation Overview

• The Australian Tax Office has many interchanges
  with clients and intermediaries to satisfy
  regulatory requirements. A range of interface
  technologies are continuously being evaluated for
  suitability including the full Web Services
  Stack, other XML specifications and XBRL as a
  candidate for financial information exchange.
• This presentation covers the process used by the
  ATO to evaluate and progress XBRL Adoption and
  includes
• Business Regulatory Context
• ATO process for stakeholder involvement.
• Expected benefits to the ATO Clients and the ATO
  for XBRL Adoption.
• Patterns of ATO interaction with clients.
• Analysis of the XBRL Technical specification and
  available Taxonomies.
• Mapping of the patterns to the available XBRL
  components.
• Recommendations for documentation of the XBRL
  reference material.
• Publication options for the ATO Adoption Report
  and ATO XBRL Taxonomies

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Process Overview

• ATO Business Context
• ATO XBRL Objectives Findings
• XBRL Taxonomies
• XBRL Componentry
• ATO Direction Alternatives
• Client Software Lifecycle view Release Kits
• Recommendations

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ATO Business Context

• Legislation administered
• income tax
• PAYG WHT and instalments
• Australian Business Number (ABN) and Australian
  Business Register (ABR)
• GST
• fringe benefits tax
• excise duty
• Superannuation
• other cross-agency duties

• Individual Tax Payers (10M)
• Corporates Others (3M)
• SuperFunds (250K)

Client Agent Intermediary
ATO
2002-03 Client Accounts (16M) RevenueTotal B185
PAYG B85 Individual B17 Company B33 GST B30
Refunds B23

• Phone Calls (12M p.a.)
• Refunds (11M p.a.)
• BAS (3M p.q.)
• ITR (13M p.a.)
• Bank Investment Accounts (gt30M p.a.)

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eAS (electronic Activity Statements) Context
6

• Business Context
• Field Definitions
• Integrity Rules
• eBusiness Agreement

eBusiness Aspects

• Transport

ATO Specs
Client Agent Intermediary
eGateway
ATO
eGateway

• Encryption
• Envelope
• Content

• Security Utilities
• Validating Parsers
• Mappers
• Application Integration

• Workflow Dialogue (External)

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ATO Objectives

• General
• Change Program Easier, Cheaper, More
  Personalised
• To align with natural business systems
• To use Industry Standards where available
• XBRL Evaluation
• determine suitability for use
• determine market awareness and availability
• consider business and technical issues
• recommend adoption path

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ATO XBRL Findings

• Taxonomies
• different styles depth of declaration
• considerable variation in how to record
  hierarchies/rules
• inconsistent use of the documentation features
• few examples of non-trivial use
• no method proposed for development
• Specification
• specification 2.1 still maturing and subject to
  interpretation
• large reliance on deep XML knowledge
• implied meta-model and structural rules
• Tools
• Vendors attempting catch-up with the
  specification

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ATO XBRL Stakeholder Involvement

• XBRL Awareness 2002-2003
• eAS Project Commencement 7/2003
• Industry Workshops 8-12/2003
• XBRL Adopter discussions Q4/2003
• BAS Vendor Discussions Ongoing
• eAS specification 1/2004
• Awareness market evaluation Ongoing
• Intent was to ensure a broad based business
  technology standard for interchange (including
  AS4590, ISO15022, XBRL) - fit for purpose with
  BAS Vendors

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XBRL Taxonomy Levels - Observed
Disclosure Statements
Explanatory Notes
Some XBRL Current Taxonomies to this level
Big 4 Proforma /Sample/Best Practice
ATO eBAS Requirements

• Facets Include
• Income / Expense
• Balance Sheet
• Cash Flow

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Reporting Reference Layers
Tax
Aus Tax Acts
Accounting
Int Acctg Standards
Aus Acctg Standards
Legislation Alignment
References
References
XBRL Taxonomy Alignment
SJE( Shared Jurisn Extension)
IAS PFS/CI
Inherits
AUS PFS/CI
IAS PFS EDAP
ATO XBRL
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ATO Reporting Documents - Characteristics

• Single Event Bulk Submission
• Many 3rd Parties (Agents, Auditors,
  Administrators..)
• Many Corporate Structures
• Many Document Types
• Cyclic Ad-Hoc frequencies
• Frequent Content Variation (New Annual Forms)
• Conditional Validation / Calculation

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A sample ATO Form BAS Form A
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ATO XBRL Alternatives

• Use Architecture XBRL Reference Taxonomies
• Continue Explosion of Available Taxonomies to
  the detailed level required by ATO
• Use Architecture Only
• Develop ATO Taxonomy
• Reference to TAX Acts
• Evolve Tax Act concepts to Aus Accounting Standard

XBRL Architecture Usage Benefits

• Element Validation Documentation Support
• Calculation Validation?
• Conditional Validation?
• ..

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ATO XBRL Componentry/Architecture Availability

• Schema Data Dictionary Tags for
  Elements/Items/Tuples
• XLinks
• Reference Point to Standards Document Sections
• Label Alternate spellings
• Presentation Recommended Hierarchy/Assembly
• Calculation InterElement Calculations
• Definition Qualified InterElement relations
• Namespaces Inclusion of other Taxonomies..

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BAS Some Assemblies Calculations
Activity Statement
.
PAYG IT Instal
GST ----------------- G1 Total Sales (G1 GST
Included?) G2 Export Sales G3 Oth GST-free
Sales G10 Cap Purchases G11 Non-Cap Purchases
Summary/Payment ----------------------- 1A GST On
Sales 4 PAYG Withheld 5A PAYG IT Instalment 7
Deferred Instalment 8A You Owe ATO 1B GST on
Purchases 5B PAYG Instalment 8B ATO Owes
You 8A gt 8B ? 9 Pay/Refund Amount
.
sum
PAYG IT I (Opt2) ----------------- Opt2 PAYGI
Calc? T1 PAYG Instal Income T2 Rate T3 Varied
Rate T11 PAYG Instal Amt T4 Variation Reason
sum
net
T1 T2/100 OR T1 T3/100 (if T3 / 0)
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BAS Some Embedded Patterns
Activity Statement
Business Data
.
PAYG IT Instal
GST ----------------- G1 Total Sales (G1 GST
Included?) G2 Export Sales G3 Oth GST-free
Sales G10 Cap Purchases G11 Non-Cap Purchases
Indicator
Summary/Payment ----------------------- 1A GST On
Sales 4 PAYG Withheld 5A PAYG IT Instalment 7
Deferred Instalment 8A You Owe ATO 1B GST on
Purchases 5B PAYG Instalment 8B ATO Owes
You 8A gt 8B ? 9 Pay/Refund Amount
.
Transferred Amount
sum
Indicator
PAYG IT I (Opt2) ----------------- Opt2 PAYGI
Calc? T1 PAYG Instal Income T2 Rate T3 Varied
Rate T11 PAYG Instal Amt T4 Variation Reason
sum
Calculation
Optional Varied Rate
net
Decision on ve/-ve Net
Optional Business Text (Domain Change in
investments 21 Current bus continuing 22)
T1 T2/100 OR T1 T3/100 (if T3 / 0)
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ATO XBRL Architecture Fit to eBAS Patterns

• Schema Business Data, Indicators, Rates
• XLinks
• Reference Legislation Pointers
• Label Full Text / Other Alias
• Presentation Hierarchy of Obligation/Blocks
• Calculation Summing/Multiply/Netting
• Definition Alias-Essence (Implicit Transfer)

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ATO XBRL Possible Componentry Use
ATO Generic
Taxonomy ATO Master
Label 1/2/3
1Ref (8A),2ECI XML,3-Narrative
Element
GSTSales
Reference
GST Act Sec 27.1.1
Presentation
2 Level Obligation Ob Elements
Calculation
Common Sum, Net, Mult (T11 T1T2)
Definition
Implied Transfer ( 5A T11)
BAS (A,BC)
Label
Form A GST Form
Specific Sequence
Presentation
Specific Document Definition
Calculation
Specific Sum, Net, Multiply
Definition
Form Elements
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ATO XBRL Schema Design Options

• We have choice, either being a generic Schema
• incorporating logic or an XBRL style schema set.

XBRL Style Path
Schema Path
Option 1 Generic Schema XBRL taxonomy
Option 2 Vanilla XBRL Schema set
Option 3 XBRL Form based Schema set (APRA)
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Some Client End Process Paths
Life Cycle View of ATO Changes
ATO
Specification/Design
ATO XBRL AS Pack
Write Specs
Build / Test
Code
Deploy / Configure
Release Code
Runtime
App
Assemble Send to ATO
Generate Message
Validate Message
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ATO XBRL Adoption Recommendation Summary

• Develop a method for identifying Message Models
  and then transformation to technology
• Client Interchanges will be hybrid XML XBRL
• Full compliance with XBRL item/taxonomy structure
• Develop Stand-Alone XBRL Taxonomy of ATO Concepts
• Use XBRL data types
• Use XLink Reference, Label, Presentation for
  documentation purposes
• Use market supplied XBRL Taxonomy Instance
  editors

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ATO XBRL Adoption Status

• Recommendations have been reviewed
• Initial eAS release has used full XML version
• ATO XBRL Taxonomy prepared and being evaluated
• XBRL Tools to be evaluated and selected
• Ongoing review of XBRL demand from client/vendor
  base
• Other ATO needs (eg Corporate tax filings) to be
  modelled for XBRL consideration
• Continued review of appropriate XML/WS standards
  for adoption - including TaxXML

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Questions please?