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1
XBRL Taxonomies
By:
IRIS Business Services Ltd.
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Objective
To get introduced to the term ‘Taxonomy’
To understand the Indian GAAP taxonomy
To know the process of creating XBRL documents
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ABC Company Ltd. Rs.(000’s)
Balance Sheet as at 31-03-2009 A Segment B Segment C Segment Group
Fixed assets 30 35 33 98
Investments 18 22 20 60
Deferred tax assets 7 8 12 27
Current assets:
Cash and cash equivalents 13 16 23 52
Sundry debtors 17 18 18 53
Inventories* 20 21 19 60
Total current assets 50 55 60 165
Total assets 105 120 125 350
* Includes inventories on acquisition of textile segment
Taxonomy
Instancedocument
XBRL Documents
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Taxonomy
• Taxonomy word is derived from:
tassein–classification
nomos–law/science
• Taxonomy means “Science of Classification”
• In XBRL, Taxonomy is “systematic classification of business and financial terms” .
• Taxonomy consists of all the data definitions, the basic XBRL properties and the interrelationships amongst the concepts
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Role of taxonomies
Standardization
Facilitates Understanding of the Data System
Enables Reuse, Data Exchange and Comparisons
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Need for multiple taxonomies
• Taxonomies are based on reporting requirements
• Requirements differ
– Across countries
– Within country, across regulators
– Within organizations for internal reporting
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Steps in Taxonomy Building
• Analysis and Element identification
• Data modeling and taxonomy designing
• Validating and Testing taxonomy
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Major XBRL Taxonomies
Indian Taxonomies
• Indian GAAP– Caters to Indian Accounting
Standards
– Taxonomy owned by ICAI
• RBI Taxonomies – Used by banks to file some of
their data in XBRL like RCA (Returns on Capital Adequacy), Form A
– Taxonomy owned by RBI
• SEBI – MF taxonomy
Global Taxonomies
• US-GAAP 2011– Financial Reporting to US SEC
• IFRS 2011– Represents IFRS 2011
• EDINET taxonomies – Reporting to FSA in Japan
• FinRep & Corep– Financial Reporting & BASEL II
based Reporting in CEBS*
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UNDERSTANDING TAXONOMY
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XBRL Taxonomy is made up of –
Schema
Dictionary of business and financial terms, along with their XBRL properties
Linkbases
Interrelationships amongst the terms defined in the schema
Taxonomy Components
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What is Schema?11
Schema Element
Element Name and Element ID
Abstract
Data Type
Balance Type
Period Type
Substitution Group
Nillable
“.xsd” extension Namespace Prefix
Concepts+Properties
12Sample Schema
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What are Linkbases?
Linkbases are taxonomy components which define relationshipsbetween elements and link them to external resources
• Interrelationships between elements
• References to regulatory material
• Human readable definitions of elements
• Six types of linkbases
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Types of Linkbases14
Linkbases
Presentation Linkbase
Calculation Linkbase
Definition Linkbase
Label Linkbase
Reference Linkbase
Formula Linkbase
Relationships defined in system readable manner
Every linkbase has a different purpose
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Element Order
AssetsAbstract
FixedAssets 1
CurrentAssetsAbstract 2
Cash 1
AccountsReceivable 2
Inventories 3
CurrentAssets 4
Assets 3
Element Weight
Assets
FixedAssets 1
CurrentAssets 1
Cash 1
AccountsReceivable 1
Inventories 1
Presentation Link Calculation Link
Presentation v/s Calculation Linkbase
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Anatomy of Taxonomy
Calculation Linkbase:
Net Current Assets +1Current Assets +1Current Liabilities -1
Presentation linkbase:Net Current Assets heading
Current assets 1 Current Liabilities 2Net Current Assets 3
Definition linkbase:Net Current Assets by Region
IndiaUK
Label Linkbase:
Current Assets : Current Assets (Standard)Current Assets : C.A. (Terse)Current Assets : Total Current Assets (Total)
Formula Linkbase:
Current Asset Ratio = Current Asset / Current Liabilities
Reference linkbase:Net Current Assets Schedule VI Current Assets Schedule VICurrent Liabilities Schedule VI
Schema:Name : CurrentAssetsId: in-gaap_CurrentAssetsAbstract: falseType : monetaryBalance : debitNillable : trueSubs. Grp : itemPeriod : instant
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MCA Taxonomy
Taxonomy available athttp://www.mca.gov.in/XBRL/ More than 3000 concepts included in
taxonomy Based on
Schedule VI, Companies Act Accounting Standards MCA specific requirements Other regulatory requirements
Use of tuples Current version designed for Commercial
and industrial entities
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MCA Taxonomy structure
MCA Specific(ca)
• Elements•Data types
Schedule VI and Accounting Standards
(In-gaap)
• Elements
Commercial and Industrial
(CI)
• Relationships•Entry -point
Additional folders as and when other industry taxonomies are developed
NBFC/ Power
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Few points..
• More than 3000 concepts defined
• Use of tuples for data modelling
• Custom data types – E.g. SRN, CIN, DIN etc.
• Enumerations for certain elements included– E.g. Type of related parties, content of report etc.
Fixed taxonomy would be followed
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CREATING INSTANCE DOCUMENT
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Instance document
• Business report in electronic format
• Refers to a taxonomy
• Contains – Facts (numeric and non-numeric)
– Context
– Units
• Stores values in actual
• Validating against taxonomy
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SOUTH AMERICAArgentina – Bank of ArgentinaBrazil – Bank of BrazilChile – Bank of Chile, SECColumbia – Bank of ColumbiaPeru – Bank of Peru
MIDDLE EAST/AFRICAUAE- SCA,ADX and DFMIsrael - Securities AuthoritySouth Africa – Stock Exchange
Sample Instance
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Creating XBRL instance document
a) Use XBRL software
• Buy the software
• Get people trained
b) Integrate in accounting systems
• Implement completely inside the systems
• Use bridge software which can read the accounting system output
c) Outsourced conversion process
24XBRL Document Creation
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Process of tagging
• One time / recurring• Assigning XBRL tag to data reported
– Selecting the most appropriate element from the taxonomy
– Extending the taxonomy, if required (and if permissible)
• Defining other information– Reporting period– Unit of measurement– Level of rounding used – Footnotes
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FEW CASE STUDIES
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Need to know XBRL..
Ministry of Corporate Affairs has issued a mandate for companies which meet the following criteria have to file their data in XBRL All companies listed in India and their Indian subsidiaries,
having a paid up capital of Rs. 5 Crore and above
or a Turnover of Rs 100 crore or above
Is this the only reason? COMPLIANCE..
XBRL is much more than COMPLIANCE
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Sourcing Compiling Analytics
Hard Copy
TXT, HTML, PDF
XBRL
• Costlier collection• Costly for storage• Limited for redistribution• Need to convert in an
electronic format
• Timely collection• Economical for storage• Economical for
redistribution• Sharing amongst all
offices becomes easy
• Timely collection• Economical for storage• Economical for
redistribution• Sharing amongst all
offices becomes easy
• Time consuming becauseof manual process
• Costly from errors,inconsistency
• Costly for no searchcapability
• Still time consumingprocess
• Difficult for anysignificant automation
• Marginal benefits fromsearch capability
• Complete automationand adheres timeliness
• Neutral to (foreign)languages
•No audit trail back to thesource document
• Limited audit trail backto the source
• No improvement inconsistency of accounttitles
• Complete audit trail• Consistency in reported
definition of line itemsby sector/by country(Not yet in consistencyamong countries)
Features in various reporting
Benefits
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XBRL
Business operations
Internal financial reporting
External financial reporting
Economic policy
makingRegulations
Software vendors
RegulatorsManagement Accountants
Trading partners
Auditors
Central Banks
InvestorsData
aggregator
Part
icip
ants
Pro
cess
XBRL GAAPXBRL GL XBRL and Extension Taxonomies
XBRL supply chain
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XBRL FOR REGULATORS
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FFIEC – XBRL Implementation
With XBRL Without XBRL
Data conforming to
requirements
95% 66%
Receipt of Call report by
FFIEC
Next day of quarter A week after quarter
Mathematically correct
data
100% 70%
Productivity (banks per
analyst)
550 to 600 450 to 500
Processing Efficiency (per
analyst)
Workload completed
within 41 days after
quarter end
Workload completed
within 48 days after
quarter end
32Standard Business Reporting (SBR)
• Government wide initiative
• Move towards single unified data structures across agencies
• Implemented in
– Australia
– Netherlands
– New Zealand
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Potential benefits for MCA
• Cleaner and accurate data– Pre-validated before submitting
– Cross verified with data submitted at other points of time
– Cross verified with data submitted by other concerned parties
• Availability of more data
• Scope for building compliance dash boards using the XBRL data
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XBRL WITHIN INTERNAL SYSTEMS
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SAP
Oracle
Legacy Systems
Data Marts
Home Grown Systems
Source Systems
Interface
Interface
Spreadsheets
Paper Reports
Reporting
Performance
Analysis
Audit
Budget
Data Warehouse BI
Tools
Re-key data“Cut & Paste”“Drag & Drop”
Reporting process – without XBRL
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SAP
Oracle
Legacy Systems
Data Marts
Home Grown Systems
Source Systems
Reusable XBRL Adaptor
XBRL Global Ledger
Dimensions
Manage Tags
Taxonomies Based on Reporting
Needs
Instance documents
Web Services
CFO Dashboard
IR Dashboard
Enterprise Search
Reports
Standardization
Data Quality / Controls
Efficiency
XBRL Repository
Enterprise Reporting & Search
Reporting process – with XBRL
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Case Studies – Wacoal : Before XBRL
32 different
legacy systems
44 disparate accounting
systems
WACOAL Group
Purchasing
Sales
Materials
Inventory
Workflow
ACCOUNTING SUB-SYSTEMSBUSINESS APPLICATION SYSTEMS
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Case Studies – Wacoal : After XBRL
32 different
legacy systems
44 disparate accounting
systems
WACOAL Group
Purchasing
Sales
Materials
Inventory
Workflow
BUSINESS APPLICATION SYSTEMS
INTE
GR
ATED
FIN
AN
CIA
L IN
FOR
MAT
ION
Ora
cle
E-B
usi
nes
s Su
ite
AP
GL
AR
EISIR
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ROI at Wacoal
Prior Processes Enhanced Processes
Opaque and infrequent information for
cash management
Real time cash management
Delayed closing processes due to
manual data exchanges and poor data
quality.
Shortens month-end closing time by two
days, and improves the quality of
managerial reporting.
Multiple data uses required additional
input, excessive labor cost, poor data
quality and timing.
Reduction of indirect costs and
enhancements in data quality and
availability of relevant information
Manual access of business unit ledgers
& sub-ledgers
Automated access of business unit
ledgers & sub-ledgers
Post-merger physical integration of
acquired companies systems taking
months/years
Post-merger system interoperability via
standardized ledgers taking weeks
Reinvestment to replicate system
controls with each system change
Preservation of system controls and
investment with each system change
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XBRL For Internal Use…
Where?
• Systems integration
• Data access, assembly and overview
• Redefinition of spreadsheets as user interfaces not data storage/transformation facilities
• Better controls – ultimately enabling continuous auditing and monitoring
Why?
• Data quality
– Validation at the “source”
– Consistency in data validation rules and analysis/visualization of data
• Abstraction of business rules and controls that can be applied across a wide range of software applications
• Lower cost operating environment
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XBRL in consolidation process
• Cost savings in preparation, report creation, analysis.
• High flexibility through the use of dashboard based business rules.
• Significant savings in man hours and lead time in compliance and consolidation
• Easy data handling due to standardization and automation, centralisation of delivery
• Faster availability of data into standard reports
• A pioneering status among enterprises in the use of XBRL
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XBRL for GAAP transformation
• Countries are adopting or converging towards IFRS
• Need to transform the accounts from existing GAAP to new IFRS or IFRS based standards
• Also, MNC companies, for consolidation have to bring all companies to one GAAP
XBRL can help in automating this process to the extent the rules can be explicitly defined
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ROLE OF PROFESSIONALS
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Opportunities for Professionals
• Building taxonomies
– Regulatory taxonomies
– Company taxonomies
• Creating the XBRL documents
• Assurance of XBRL documents
• Implementing XBRL within organizations
• Training
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Entered XBRL domain - The Reserve Bank of India launches IRIS’ XBRL
based filing platform
- IRIS’ XBRL based filing platform for stock exchanges is modified to meet filing requirements of the Bombay Stock Exchange and National Stock Exchange
- The Institute of Chartered Accountants of India ICAI asked IRIS to build the Indian XBRL taxonomy
- iFile pilot is implemented at the JSE
Developed FinX, software platform to create XBRL instance documents
Built Indian XBRL database ( 20000+ Documents)
Outsourced XBRL Services offering to help create XBRL repository in US for Edgar Online
Developed iFile, XBRL based filing solution first deployed at the Bombay Stock Exchange
Entered into a strategic partnership with Merrill Corporation in the US
Awards full scale iFile implementation by JSE
Worked on developing Proton, as its next generation application for XBRL document creation
IRIS : 6 Years in XBRL
-Awarded project by the State of Nevada, USA for Debt Collections and Accounts Receivables (iFile)
-Project in Macedonia for XBRL solution for the business registry
-Launched iXBRL conversion services for UK to meet HMRC requirement; converted over 100 documents
- Won contract from the Emirates Securities and Commodities Authority to implement iFile
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THANK YOU
Contact us:
IRIS Business Services LimitedT-131, Tower 1, 3rd Floor,International Infotech Park,Vashi, Navi Mumbai 400703,Maharashtra,India.
Website: www.irisbusiness.comPhone : 022 6723 1000Fax: 022 2781 44341800-209-9275 SHILPA DHOBALE
