XBRL – An Introduction What is XBRL?

XBRL (Extensible Business Reporting Language) is a royalty-free, open specification for software that uses XML data tags to describe financial information for public and private companies and other organizations. XBRL benefits all members of the financial information supply chain by utilizing a standards-based method with which users can prepare, publish in a variety of formats, exchange and analyze financial statements and the information they contain. The world's leading accounting, financial, government and software organizations are involved in the adoption and use of XBRL in the U.S. 1 Let’s take a look at each of these words more closely: 1. Extensible – means that you can extend the use of the business data beyond its original intended purpose and the key is that the extended use can be determined by USERS, rather then the preparers of the business data. This is achieved my adding tags <> - which are both human and machine readable describing what the data is. 2. Business – means any type of business transaction, XBRL focus is on describing financial statements for both public and private companies. 3. Reporting – the intention behind XBRL is to have all companies report their financial statements using the XBRL format. 4. Language – XBRL is based on XML (extensible markup language), which prescribes the manner in which data can be marked-up or “tagged” to make the data meaningful to human readers as well as to computer based systems. Who are the backers of XBRL? • SEC – the big player which will eventually require all financial reporting information be provided in XBRL format. • AICPA – Recognized the efficiency XBRL enables in the preparation of financial documents by the elimination of the manual data-entry required when accounting data is re-used (or repurposed) into various output forms. • XBRL International – tasked with promoting and creating XBRL taxonomies and the original XBRL specification. • XBRL US – tasked with creation of US GAAP taxonomies.

XBRL Milestones: 2
1 2

“XBRL US Standards Consortium Completes Creation of US GAAP Taxonomies.” Press Release: SEC Announces New Unit to Lead Global Move to Interactive Data (Press Release No. 2007-213; October 9, 2007); Press Release: SEC to Rebuild Public Disclosure System to Make It

October 9th 2007: Chairman Christopher Cox today announced the
creation of a new office within the 74-year old agency to lead the transformation to interactive financial reporting by public companies ... the new office is the agency-wide disclosure modernization program

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September 25th 2007: Chairman Christopher Cox announced a major step forward in fulfilling a vision for interactive data and more transparent financial reporting with the completion of all development work on data tags for financial reporting in accordance with U.S. generally accepted accounting principles. September 2006: XBRL US, the United States jurisdiction of XBRL International, spins off from the XBRL committee of the AICPA. September 25th 2006: U.S. Securities and Exchange Commission Chairman Christopher Cox announced today that the SEC has awarded three separate contracts totaling $54 million ... to 1)Modernize and Maintain the EDGAR Database to Use Interactive Data, 2) Complete XBRL Code Writing for U.S. GAAP Financial Statements, and 3) Interactive Data Tools for Investors February 2005: SEC creates voluntary program for reporting XBRL financial data on EDGAR December 2003: XBRL 2.1 released December 2001: XBRL 2.0 released July 2000: Spec 1.0 is released and International organization created. October 1999: AICPA hosts first meeting and creation of steering committee and work begins on the first taxonomy, Financial Statements for the Commercial and Industrial Sector April 1998: XBRL is conceived by Charles Hoffman, a CPA with the firm Knight Vale and Gregory in Tacoma, Washington

What was accounting like before XBRL? • Accounting Cycle – Journal, Ledger, Trial Balance, Financial Statements o Debits and Credits • Text based! • Manual input, manual interpretation, Re-entry of data for each separate use What will accounting be like with XBRL? What is XBRL based on – XML? What is XML? XML stands for Extensible Markup Language. What is being “marked” are the data that need to be exchanged (i.e. sent and retrieved from one system application to another both intra- and inter-organizationally). Marking means defining what the data is by enclosing
"Interactive"; 2006-158; September 25, 2006; XBRL History; XBRL US.

the data with descriptions of what the data is. These descriptions are called tags, and the tags can be any words so long as they are meaningful and follow the syntax of XML. XML can be used to create other vocabularies, which use specific tags standardized for a specific purpose – XBRL is one such vocabulary used for Financial Business Reporting. XML has certain characteristics that must be followed. We will examine the main concepts to get an idea: • Prolog – this is the first line of any XML based document and indicates to both human and machine that what follows is XML based. It contains information about which XML version the document is based on, among other attributes.
<?xml version="1.0" encoding="UTF-8"?>

Elements – a tag set (the tag name, its attribute and data). Elements have a hierarchy that help to give an overall meaning to the XML document. The element hierarchy contains a root element which contains (or encloses) all the other elements. The root element identifies the major theme of the XML document. Next in the hierarchy comes the parent element which contains other elements. The elements contained (or enclosed) by the parent element are called child elements. The child element commonly contains the data that is being described in the XML document. There may be many child elements that share the same parent element, the set of these child elements are called sibling elements.

<tourGuide> <city> <cityName>Belmopan</cityName> <adminUnit>Cayo</adminUnit> <country>Belize</country> <population>11100</population> <area>5</area> <elevation>130</elevation> <longitude>88.44</longitude> <latitude>17.27</latitude> <description>Belmopan is the capital of Belize</description> <history>Belmopan was established following the devastation of the former capital, Belize City, by Hurricane Hattie in 1965. High ground and open space influenced the choice and ground-breaking began in 1966. By 1970 most government offices and operations had already moved to the new location. </history> </city> </tourGuide>

Attributes – Are used to modify or clarify the data in an element. For example in the above element <elevation>130</elevation> we don’t know what measure is being used, is the elevation 130 feet or 130 meters, or something else. Using an attribute would clarify the data: <elevation measureUnit = “meter”>130</elevation> Now we know that the elevation of Belmopan is 130 meters above sea level.

Rules: 1. The first line of an XML document must contain the prologue. 2. The main theme of the XML document – the root element - must enclose all the other elements in the document. 3. Every element must have an opening tag <> and a closing tag </> 4. Elements must be properly nested, that is you close the tag that was opened last – think of tags as using a LIFO convention or more properly a LOFC Last Opened First Closed convention (though it doesn’t have quite the same ring to it). 5. Elements can have attributes.  Attribute values are enclosed with “” and can have no spaces.

What are the important structures for creating XBRL?3 • • • Tags – descriptions of what the data is. For example <Assets>1000</Assets> Attributes: Meta-data, or data describing the description of the data. For example what is the balance of an asset account (debit or credit), what is the monetary unit, what is the period that the amount represents? Relationships: How is data labeled as an Asset related to data labeled as Inventory?

Instance Documents contain tags describing data, the tags on an instance document are defined in a Schema, and the relationships between tags are defined in LinkBases. The combination of Schemas (defining data elements) and LinkBases (defining relationships among data elements) is known as Taxonomy. There are different types of LinkBases; presentation linkbases, calculation linkbases, definition linkbases, reference linkbases, and label linkbases. A presentation linkbase contains information about the relationships among data elements used to organize output. For example Assets are made up of Current and Long-term, Current is made up of Cash, ST Investments, A/R, etc. The calculation linkbase provides information about how related elements are summed together (either added or subtracted). The definition linkbase allows different elements to be related together (for example, Inventory and Merchandise Inventory).

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“IASC Foundation XBRL - About XBRL - Fundamentals of XBRL.”

A reference linkbase provides information that provides the relationship between an element and the standard reference for that element (for example, Cash Flows from Operations are related to FASB #????). Finally a label linkbase shows the relationship among elements and human readable labels, thus CashAndCashEquivalents can be related to Cash and Cash Equivalents (note the spaces) or translated into another language.

“IASC Foundation XBRL - About XBRL - Fundamentals of XBRL.” http://www.iasb.org/xbrl/about_xbrl/fundamentals_xbrl.html (accessed October 10, 2007). “Press Release: SEC Announces New Unit to Lead Global Move to Interactive Data (Press Release No. 2007-213; October 9, 2007).” http://www.sec.gov/news/press/2007/2007-213.htm (accessed October 10, 2007). “Press Release: SEC to Rebuild Public Disclosure System to Make It "Interactive"; 2006158; September 25, 2006.” http://www.sec.gov/news/press/2006/2006-158.htm (accessed October 10, 2007). “XBRL History.” http://www.xbrl.org/history.aspx (accessed October 10, 2007). “XBRL US.” http://xbrl.us/Pages/default.aspx (accessed October 10, 2007). “XBRL US Standards Consortium Completes Creation of US GAAP Taxonomies.” http://xbrl.us/Press/Pages/092507USGAAP.aspx (accessed October 10, 2007).

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