XBRL Update Dealing with Mandatory Reporting

Radisson SAS Royal Hotel21 October 2009

Mike Willis, Chair, XBRL International

Richard Day, Conor O’Kelly, Harry Goddard

XBRL – what it is … what it is not

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XBRL is a data standard that simply provides a mechanism for standardising company-specific terminology in to root business reporting concepts, allowing comparison of essentially similar information across multiple financial statements and across multiple companies

… it is not a replacement accounting guide or disclosure checklist, and does not check the accuracy of financial statements for compliance with accounting standards compliance with regulator reporting requirements.

It can provide more timely and efficient access to and analysis of financial data internally and across companies, expand usability of externally reported financial information, and improve performance management and overall business decision-making …

… it is not a substitute for existing governance structures, controls, procedures and related managerial oversight required for preparing financial statements and reports.

It provides a standard mechanism for transmitting financial information in a way that leverages information technology

… but in itself it is not a solution for issues relating to electronic information exchange such as security and data privacy.

XBRL is the de-facto global standard for electronic communication of financial and business data, providing increased functionality for users of financial statements by encoding statement information in to a

standard, re-usable, computer-readable format.

2009 © Deloitte & Touche

Making the business case for XBRL

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Reduced administrative burden … through a standardised, automated and more efficient reporting environment

Enhanced availability of financial information to regulators, investors and analysts … support for cross border harmonisation of reporting and compliance requirements

Improved filing accuracy and transparency … reduced erroneous data through automated exchange and validation, removal of manual re-keying of data … structured and consistent format for transparency of calculations and data inputs

Reduction in processing time … freeing up personnel time to move from data manipulation to more value-add data analysis activities

Increased reporting capacity for more frequent and timely production of business reports … once the taxonomy is mapped to a company’s information system reports can be generated on demand

Better search and comparability capabilities … enables easier search and retrieval of financial data … format ready for query and analysis

Promotes efficiencies and cost savings … the main driver for XBRL adoption across other jurisdictions is to reduce the overall burden of regulatory and statutory reporting … as an open standard it provides the cornerstone for a more efficient and low cost reporting environment

XBRL benefits all stakeholders of the financial and business reporting supply chain that includes public and private companies, governments, regulators, analysts, investors and banks.

2009 © Deloitte & Touche

Key challenges & lessons learned

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Business Case for Businesses as well as Government

‒ Business case with clearly defined benefits that are measurable - tangible benefits for businesses as well as government must exist as the incentive for participation and adoption

Political Will and Taxonomy Ownership

‒ Ownership and investment for development and maintenance of taxonomy … for statutory and regulatory reporting depends on investment from government’s responsible authority … responsible for updating to keep in line with international accounting standards and company law requirements

‒ Standardisation of (local) base taxonomy by relevant stakeholders (e.g. Revenue, CRO, CSO) … sets out a common dictionary of terms that each stakeholder must then extend for own unique requirements

Legislation

‒ Review source of information obligations and rationalise during taxonomy development … don’t just XBRL’ise current document-based reports … Netherlands identified companies filing more information than was legally required and also combined the Company House and Taxation Office returns into one

‒ Standardising information obligations and reporting procedures may require legislative changes to achieve significant reduction in administrative burden

XBRL Taxonomy Learning Curve

‒ Taxonomy development and their subsequent interpretation and mapping configuration depends on financial domain expertise; XBRL taxonomies must be supported by clear preparer guidelines

‒ Clear guidelines for, and traceability of, the mapping of company data to the reporting elements in the taxonomy are key for success and subsequent re-use and efficiency

Support for Extensions

‒ Supporting company specific extensions allows greater flexibility for the filer on what information is contained in their instance document

‒ Not supporting company specific extensions maintains tighter standardisation and ultimately allows for greater re-use and comparison of information … rendering solution is also easier 2009 © Deloitte & Touche

Steps to reporting via XBRL

52009 © Deloitte & Touche

Deloitte’s new approach to preparing financial reportsMap client statements

Import data & generate report

Publish report Lodge ReviewCalculate and validate data

Map client statements to

the Taxonomy to produce a first run instance

Validate instance,

compute missing fact values and store revised

instance

Import instance document into report template

Add missing fact values such as

Director details, select notes and

publish specification

Submit for review and

finalise for client sign off

Lodge instance to regulator

Characteristics of Pilot Company - FBD

Large listed group

Insurance and hotel sector

Multi-national/multi-business

IFRS reporter

Highly regulated

XBRL Conversion Process

IFRS taxonomy used as base

Extended with elements of Irish GAAP

Taxonomy covered approx 30% of account line items

Project Assessment

Taxonomy – development required, current status leads to significant manual customisation

Tools – support from software vendors/tools readily available, varied options for different business type and size

Business Case – business incentive needed

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CRO Pilot - FBD Experience

2009 © Deloitte & Touche

FBD Accounts

Upload to Dragon Tag

Primary instance documentExtensions for calculation, presentation and labelsXSD file with full taxonomy definition

Produce instance and other documents

Perform validation

Submit to CRO

Receive Validation report

IFRS Taxonomy

Next steps – planning for a successful project

82009 © Deloitte & Touche

Establish team

Undertake training, education and awareness

Consider software options

Review preparer guidelines of relevant regulatory body

Undertake initial mapping exercise against IFRS/GAAP

Consider other reporting requirements

Undertake tagging exercise as a ‘dry run’

Consider business case