Sin ttulo de diapositiva

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LESSON 7 THE COMMUNICATION OF ACCOUNTING
INFORMATION THROUGH THE INTERNET
7.1.The reasons for the communication of
accounting information via web. 7.2.The standard
for the communication XBRL. 7.3.The development
of XBRL.
School of Computing of Oviedo ACCOUNTING
MANAGEMENT II
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7.1. THE REASONS FOR THE COMMUNICATION OF
ACCOUNTING INFORMATION VIA WEB

• The globalization of the economy requires the
  standardization of both financial and
  nonfinancial information.
• The adoption of the standards for financial
  reporting (International Financial Reporting
  Standards- IFRS), which are issued by the IASB
  (International Accounting Standards Board) are of
  particular importance. These standards are
  mandatory for EU listed groups.
• Basel II Accord, Pillar 3, which is devoted to
  reinforce and to make more useful the financial
  statements issued by banks, in order to improve
  market efficiency.
• Investors and other users of financial
  information demand for transparency, social
  responsibility, ethic behaviour, and an adequate
  corporate governance.
• Both markets and regulators demand for accurate
  and quality information at shorter intervals.

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7.2. THE STANDARD FOR THE COMMUNICATION XBRL

• XBRL means eXtensible Business Reporting
  Language.
• The objective is to create files containing the
  information in the financial statements (i.e.
  balance sheet, profit and loss account) and other
  related information (i.e. the audit report).
• Each data is labelled so that software
  applications can process the information without
  the intervention of human operators.
• Unstandardized information
• Total Assets10000
• Tassets 10000
• Assets 10000
• TA10000
• XBRL-standardized information
• ltTotalAssetsgt10000lt/TotalAssetsgt
• XBRL is XML (Extensible Markup Language)
  compliant.

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What is XBRL?
XBRL is an open software specification. It is
based in XML technology. It eases and simplifies
the ellaboration and communication of business
and financial information. The access to
financial information through the web is also
simplified. XBRL reinforces the utility and the
transparency of financial statements. This is
because it is based in a well known technology
(XML).

• Some features of XBRL
• It does not imply the setting of additional
  accounting standards.
• XBRL does not require an specific software
  because it is an open standard.

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What is XBRL?
Some items of the profit and loss account of a
firm
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What is XBRL?
XBRL code
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What is XBRL?
General
Guides the ellaboration of taxonomies
XBRL Specification
Standards for a specific financial report
XBRL Taxonomies
Contains the information of a company
XBRL Instances
Specific
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Which are the main advantages of XBRL?
The analysis of financial information
PRESENT
ACCOUNTING SYSTEM
ANNUAL ACCOUNTS
REKEYING PROCESS
DATA-BASE
DECISION MODELS
FUTURE
WEBSITE
DECISION MODELS
ACCOUNTING SYSTEM
XBRL ACCOUNTS
E-MAIL
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Which are the advantages of XBRL for each one of
the users/producers of financial information?
Internal communication of financial information
External communication of financial information
Analysis of financial information
Business operations
 
 
Providers of market and financial information
Users of financial information
Reporting entities
Business partners of the reporting entity
Accoun-tants of the reporting entity
Audi-tors
Regulators
Software developers
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Which are the advantages of XBRL for each one of
the users/producers of financial information?
REPORTING ENTITIES
Using XBRL, companies will be able to

• Save costs by preparing data in one form and
  automatically generating many outputs.
• Consolidate results across divisions and
  subsidiaries with much greater speed and
  reliability.
• Make more effective use of the internet in
  communicating with investors.
• Simplify the process and reduce the costs
  involved in regulatory reporting to tax and other
  authorities.
• Obtain quicker responses from counterparties,
  including banks and regulators.
• Free themselves from proprietary systems and
  software which are difficult and costly to
  replace.

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Which are the advantages of XBRL for each one of
the users/producers of financial information?
BANKING, LOAN AND CREDIT MANAGEMENT
Through XBRL, loan and credit management
departments can

• Obtain data quickly and reliably via automated
  reporting. Credit applicants will send the
  required information directly from their
  accounting information systems.
• Reduce costs in processing data, as they will be
  directly imported by the analysis systems of
  financial entities.
• Compare and analyse financial information much
  more reliably, fully and effectively using
  automated processes. This is because no rekeying
  of data is needed.
• Reach decisions more confidently. As the time for
  the obtaining and preparation of financial
  information is dramatically reduced, analysts can
  devote much more time to decision making.
• Provide a quicker response to clients, because of
  the improved efficiency of the whole process.

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Which are the advantages of XBRL for each one of
the users/producers of financial information?
By introducing XBRL for reporting, REGULATORS and
other authorities can

• Obtain data which can be entered automatically
  into systems without rekeying, reformatting or
  other translation effort.
• Dramatically reduce costs by automating routine
  tasks.
• Quickly and automatically identify problems with
  filings, as validation software will be easily
  developed.
• Analyse and compare data much more quickly,
  efficiently and reliably. Benefit from the use of
  software in validation and analysis.
• Monitor data and activities and reach judgements
  with far greater speed and confidence.
• Focus effort on analysis, decision making, and
  dealing with counterparties rather than data
  manipulation.
• Supervised entities will also obtain benefits
  They obtain a much faster and focused response as
  well as efficiencies and cost savings throughout
  the regulatory filing process.
• For the specific case of stock exchanges, they
  can use XBRL to
• Increase the value and competitiveness of the
  data products which they offer to institutions
  and private investors.
• Strengthen the transparency and robustness of
  information on their markets.

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XBRL International
7.3. THE DEVELOPMENT OF XBRL

• April 1998 XBRL is conceived. The first
  prototypes of financial statements and audit
  schedules using XML are developed.
• July 1998 The prototypes are presented to the
  American Institute of Certified Public
  Accountants (AICPA).
• October 1998 The AICPA decides to fund a project
  to create a prototype set of financial statements
  in XML.
• June 1999 The AICPA creates a business plan for
  XML-based financial statements, originally code
  named XFRML (eXtensible Financial Reporting
  Markup Language).
• April 2000 XBRL is chosen as the new brand for
  the technology.
• July 2000 XBRL International is formed. It is a
  not-for-profit consortium whose aim is to build
  the XBRL language and to promote and support its
  adoption.
• By now approximately 550 companies and agencies
  worldwide are members of XBRL International.
• Website www.xbrl.org

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XBRL International
Organization chart
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The local jurisdictions

• XBRL International is comprised of local
  jurisdictions which represent countries, regions
  or international bodies and focus on the progress
  of XBRL in their areas as well as contributing to
  international development.
• Jurisdictions
• Promote XBRL and organize or sponsor the creation
  of taxonomies, notably for the main accounting
  standards for business reporting in their area.
• Provide an education and marketing role,
  explaining the benefits of XBRL to government and
  private organisations
• Support the implementation of XBRL.
• Members join through their local jurisdiction,
  except in areas where no jurisdiction has yet
  been formed. In that case they can join XBRL
  through a special direct membership category.
• XBRL Jurisdictions can be either provisional or
  established.

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Provisional Jurisdictions

• A facilitator organization is needed to guide the
  establishment and operation of the jurisdiction
• Neutral/independent.
• Preferably a not-for profit organization that is
  related to business reporting.
• Usually the local professional body for
  accountants.
• The provisional jurisdiction can be a working
  group within the facilitator.
• Only one jurisdiction for each country.
• A provisional jurisdiction is only allowed to
  remain provisional for two years.
• Provisional Jurisdictions China, Italy,
  Luxembourg, Poland, South Africa, United Arab
  Emirates.

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Established Jurisdictions

• Every established jurisdiction must have
• Facilitator.
• Project Manager (Director, Executive Director,
  CEO, etc.).
• Steering Committee.
• Working Groups charged with specific
  deliverables.
• Policies and procedures (i.e. bylaws).
• Significant committed local support.
• A business plan and detailed budget.
• Established jurisdictions have the right to vote
  and to take part in the governance of XBRL
  International.
• Established Jurisdictions Germany, Australia,
  Belgium, Canada, South Korea, France, Spain, USA,
  Netherlands, Ireland, Japan, New Zealand, UK,
  IASB Jurisdiction, Sweden, Denmark.

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XBRL Spain

• Provisional jurisdiction formed February 2002.
• Facilitator Organization Spanish Association of
  Accounting and Business Administration.
• The role of the Bank of Spain.
• Established jurisdiction formed March 2004.
• Outstanding projects
• XBRL for the information of listed companies
  submitted to the Spanish Securities Commission.
• XBRL for the information of banks submitted to
  the Bank of Spain.
• Website www.xbrl.org.es
• More than 50 members

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Founding members of XBRL Spain
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Members of XBRL Spain
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Organization chart of XBRL Spain
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Some XBRL projects

• Regulators
• Bank of Spain (Banco de España)
• Federal Financial Institutions Examination
  Council
• Federal Deposit Insurance Corporation (FDIC)
• Deutsche Bundesbank
• Bank of Japan
• Financial Services Authority UK (FSA)
• Australian Prudential Regulatory Authority (APRA)
• Banks
• Bank of America
• Deutsche Bank
• Dresdner Bank
• Sumitono Mitsui Banking Corporation
• PostBank
• Deutsche Verkehrsbank
• Bank of Tokyo
• Other
• PR Newswire
• Microsoft (MSFT)

• Government
• XBRL Express (EDGAR Online)
• Danish Commerce and Companies Agency (DCCA)
• EUROSTAT
• Association of Water Boards
• Australian Taxation Office (ATO)
• UK Inland Revenue
• National Tax Agency of Japan (NTA)
• Department of Defense (DoD) EEUU
• Ministry Of Economy, Trade and Industry (METI)
• Elster (ELECTRONISCHE STEUERERKLÄRUNG)
• Tokyo Institute of Technology
• Stock Markets
• Bolsa de Frankfurt
• Bolsa de Singapur
• Bolsa de Nueva Zelanda
• Securities Commissions
• NASDAQ
• KOSDAQ

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Some XBRL projects
Comisión Nacional del Mercado de Valores (CNMV)
Spanish Securities Commission

• During 2004, XBRL Spain started the development
  of the taxonomy regarding the financial
  information that listed firms must submit to the
  CNMV.
• The project was called IPP (Información Pública
  Periódica Públic Periodic Information).
• On 6/30/2005 IPP taxonomy was approved. This
  taxonomy is compliant with IFRS.
• It is made up of 14 schemes which contain common
  items and specific concepts (Industrial and
  Commercial Firms, Insurance Companies, Banks and
  Holding Firms).
• It allows the standardization of both individual
  and consolidated accounts.
• XBRL instances of listed firms can be downloaded
  from http//www.cnmv.es.

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Some XBRL projects
Bank of Spain

• The ES-BE-FS taxonomy was developed with the aim
  to standardize the financial statements that
  Spanish banks must submit to the Bank of Spain.
  This taxonomy is IFRS compliant.
• This taxonomy is compulsory for the financial
  entities who have joined the SIIF (Sistema de
  Intercambio de Información Financiera - System
  for the Interchange of Financial Information)
  project.
• Some features of the SIIF project
• Financial entities are able to know which
  taxonomies they must use.
• The information is validated before it is
  submitted to the Bank of Spain.
• The information is automatically received and
  filed by the Bank of Spains systems. An
  acknowledgment of receipt is automatically
  issued.
• It is an scalable environment. Other entites
  apart from banks and other reports apart from the
  financial statements can be easily included in
  this project.
• Website http//www.bde.es/regulacion/contabilidad
  /taxonomia_es-be-fs_2005-04-11.htm

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Some XBRL projects
The LENLOC taxonomy

• On 10/31/2006 a pilot project started whose aim
  is to use XBRL for the standardization of the
  financial information that Spanish local entities
  (i.e. city councils) must submit to the Spanish
  Ministry of Economy and Finance.
• The first stage of this project is the
  standardization of budgetary information.
• The LENLOC (Liquidación de ENtidades LOCales
  Balancing of the Budget of Local Entities)
  taxonomy was developed.
• Since March 2007, the information regarding the
  balancing of the budget of local entities can be
  filed in XBRL format, using a software
  application developed by the Spanish Ministry of
  Economy and Finance
• Website http//www.meh.es/Portal/AdministracionE
  lectronica/LENLOC.htm

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Some XBRL projects
The COREP project

• The New Capital Accord (Basel II) implies a new
  way to measure the risks of financial entities
  and investment companies.
• The Committee of European Banking Supervisors
  (CEBS), which is the adviser of the European
  Union on banking policy issues, encourages XBRL
  usage for the regulatory filing of banks,
  according to the requirements of Basel II.
• The aim of the COREP project is to deliver the
  XBRL taxonomy for COmmon solvency ratio REPorting
  framework, for credit institutions and investment
  firms under the future European Union capital
  requirements regime.
• Website http//www.corep.info.

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Some XBRL projects

• Inland Revenue (UK)
• An XBRL project is being developed by Inland
  Revenue (UK Tax Authority).
• This project started in 2003.
• Its aim is to use XBRL for the filing of the
  corporate tax.
• Inland Revenue expects to receive 1.000.000
  filings.
• The taxonomies were developed jointly with the
  Institute of Chartered Accountants in England and
  Wales. They are closely related to the UK-GAAP
  (Generally Accepted Accounting Principles)
  taxonomies.
• Website www.inlandrevenue.gov.uk/

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Some XBRL projects

• FDIC - Call Report Modernization
• The Federal Deposit Insurance Corporation (FDIC)
  is the American independent agency that insures
  deposits and examines and supervises financial
  institutions.
• The FDIC has launched a project for the
  modernization of the Call Report (supervision of
  financial institutions) through the usage of
  XBRL.
• XBRL is the selected standard for gathering,
  processing and communicating information.
• The main objective is to shorten the time needed
  for the publication of the information about
  banks from 45 to 15 days.
• Net savings of 26 million in the processing
  costs are also expected.
• Consolidated information will be provided to
  other governmental agencies.

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Some XBRL projects
Securities and Exchange Commission (SEC)

• Firms listed in American stock exchanges must
  submit financial information to the SEC.
• They submit the information through the EDGAR
  (Electronic Data Gathering, Analysis and
  Retrieval) system.
• EDGAR files are plain text files (not XML
  compliant).
• Since Abril 2005 commercial and industrial listed
  firms can voluntarily file EDGR information using
  XBRL.
• From August 2005 onwards investment companies can
  also use XBRL to submit financial information to
  the SEC.
• Website http//www.sec.gov

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Some XBRL projects
The Dutch Water Boards

• The Dutch Water Boards are responsible for water
  management in the Netherlands. Broadly, their
  three major concerns are water quality, quantity
  and dike integrity. There are 27 water boards,
  each overseeing a region.
• The majority of them use XBRL for their mandatory
  Economic and Monetary Union (EMU) reporting to
  the Central Bureau of Statistics (CBS).
• The administrative burden that the European Union
  and other institutions impose to these kind of
  entities is rising.
• A research work (Deloitte, 2007) shows that by
  applying XBRL to the reporting process,
  efficiencies up to 25 can be realized.
• The Dutch government has also launched a global
  project whose aim is to obtain net savings of 350
  million in administrative costs through the
  extensive use of IT.
• Website www.xbrl-nederland.nl.

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The future of XBRL
Country development

Country 1 Sector A
Country 2 Sector A
Country K Sector A
Sector development

Country 1 Sector B
Country 2 Sector B
Country K Sector B




Country 1 Sector N
Country K Sector N
Country 2 Sector N