eXtensible Business Reporting Language Presentation by

CA ATUL C. C BHEDA B Com; FCA; LLB(GEN); DISA(ICA)

MUMBAI

The

word XBRL is short form of eXtensible Reporting Xt ibl Business B i R ti Language L XBRL International is a not-for-profit consortium of approximately 650 companies and agencies worldwide working together to build the XBRL language and promote and support its adoption. d  Effort had began in 1998 and has produced a variety of specifications and taxonomies 16 June 2011

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The idea behind XBRL, eXtensible Business

Reporting Language, is simple. Instead of t treating ti fi financial i l information i f m ti as a block bl k of f text - as in a standard internet page or a printed document - it provides an identifying t tag f for each h individual i di id l item it of f data. d t Thi This is computer readable.

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It is language for the electronic communication of

business and financial data  It

is an open standard which supports information modeling and the expression of semantic meaning commonly required in business reporting.

XBRL is XML-based.  It

uses the technologies 16 June 2011

XML

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syntax

and

related

XML

XBRL is a standards-based way to communicate

business and financial information.  These communications are defined by metadata set out in taxonomies.  Taxonomies T i capture t th definition the d fi iti of f individual i di id l reporting concepts as well as the relationships p and other semantic meaning. g between concepts 16 June 2011

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Provides identifying tag for each individual item

of data such that it can be used by y name

The basis for this technology is a "tagging"

process by b which hi h each h value, l it item, and d descriptor, d i t etc. in the exchanged information can be given a q set of tags g with which to describe it. Using g unique these tags, computer programs can read the data without human intervention. 16 June 2011 CA ATUL C BHEDA

1998 April - XBRL is Conceived by Charles Hoffman, a CPA 1999 The AICPA funded the XBRL effort. effort Twelve companies

including then Big five Microsoft etc joined hands along with the AICPA as members of the XBRL Steering Committee.

2002 First Bank Regulator g to Adopt p and Use XBRL

Australian Prudential Regulatory Agency (APRA), 16 June 2011

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The

How does XBRL Works XBRL is a powerful and flexible version of XML It enables unique identifying tags to be applied to items of

financial data.  These are more than simple identifiers. They provide a range of information about the item, such as whether h th it is i a monetary t it item, percentage t or fraction. f ti  XBRL allows labels in any language to be applied to items, as well as accounting references or other subsidiary information. 16 June 2011

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How does XBRL Works  XBRL Taxonomies, Taxonomies are the vocabularies or dictionaries which

the language uses.  These are the categorisation schemes which define the specific tags for individual items of data  National jurisdictions have different accounting regulations, so each may have its own taxonomy for financial reporting. reporting  Many different organisations, including regulators, may also q taxonomies to cover their own business reporting p g require needs. 16 June 2011

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H d W k How does XBRL Works XBRL

can show how items are related to one

another. The rich and p powerful structure of XBRL allows very y efficient handling of business data by computer software.  It supports all the standard tasks involved in compiling, storing and using business data.  It can then be searched, selected, exchanged g or analysed by computer, or published for ordinary viewing. 16 June 2011 CA ATUL C BHEDA

H d W k How does XBRL Works Ordinary users of XBRL may be largely or totally

unaware of the technical infrastructure which underpins the language. However, software companies, i such h as accountancy software f providers, id need to take account of XBRL and its features when p producing g their p products. Now we will see in this is a small example of

XBRL B -- intended d d for f reading d b computers, not by humans. To see what it represents 16 June 2011

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The taxonomy comprises of the following components Schema – Defines the elements used in the linkbases Presentation linkbase – Which defines the structure

for displaying the data, along with the preferred label attribute. attribute

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The taxonomy comprises of the following components Calculation linkbase – Establishes the arithmetical

relationship of simple addition and subtraction, which is d n b done by way of f a weight i ht attribute tt ib t (1 or -1) 1) Label linkbase – Stores the labels about the concepts

(it is the human readable name of the element)

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The taxonomy comprises of the following components Reference linkbase -Provides guidance to the users

of the taxonomy, as it links the concepts to their st t t statutory references. f n s

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Better business reporting and analysis. Cost saving g Faster More reliable More M re accurate ccur te handling h ndlin of f data, d t Improved analysis Better q quality y of f information f and decision-making. g Avoids time-consuming manual comparison, Avoids re-entry of data. Internet I Ready R d f for transmission i i and d di direct use b by

all stake holders 16 June 2011

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Taxonomies can exist for a number of reporting situations,  for instance: tax returns bank call reports  financial statements general ledger (GL) event reporting audit schedules

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Who is using XBRL  Australia, Australia

Belgium, Canada, Belgium Canada China China, Denmark, France, Germany, Hong Kong, India Israel, India, Israel Italy, Italy Japan, Japan Korea, Korea the Netherlands, Singapore, Spain, Sweden, Thailand UAE, Thailand, UAE the United States of America and the United Kingdom

Chartered Accountants’ Role As Consultant Regulatory requirements applicable to the entity  Feasibility studies Selection S l cti n of f application pplic ti n software s ft r and/or nd/ r vendor User Acceptance Testing of the XBRL application Use of appropriate taxanomy 16 June 2011

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Chartered Accountants’ Role In Industry To explore the implementation and business process

implications p of tagging gg g XBRL at different levels in an organization’s information infrastructure. Explain non- technical terms Streamlining and automating the reporting the reporting process for internal and external purposes Recommend the best practices in implementation of XBRL Determine long range plans for the organization with regard g to implementation p of XBRL 16 June 2011

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As Statutory Auditor Currently the filers are not required to

Statutory Audit of the XBRL instance document.

have

It is in the best interest of the public that these

documents be assured.

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As Internal Auditor Use U of f the th correctt taxonomy t Correctness

and completeness of the tagging

process Correctness of the technical aspects of the XBRL instance document Completeness of data on Initial migration to XBRL and Ongoing review of process and IT General Controls around XBRL reporting 16 June 2011

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Understand the Taxonomy Understand Financial Statements  Obtain knowledge of XBRL Select XBRL software tool(s) Map financial statements to taxonomy

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Do the Extension and Custom taging of elements if

required q Perform gap analysis of financial statements to the Taxonomy Define D fi company specific ifi reporting ti elements l t to t di disclose l Tag financial statements and footnotes to (extended) taxonomy Uniquely tag the actual fact values 16 June 2011

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Review and validate instance document Conduct assurance on XBRL instance document by

auditor (optional) Submit XBRL filing to regulator

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An XBRL instance document is a business report in an electronic format created according to the rules of XBRL. It contains facts that are defined by the elements l i the in h taxonomy it i refers f to, together h with i h their values and an explanation of the context in y are p placed. XBRL Instances contain the which they reported data with their values and “contexts”.

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Formation of a group on XBRL in India In the year 2007 the Institute of Chartered Accountants of India (ICAI), the premier accounting body and the National Standard setter constituted a Group for promotion and development of XBRL in India. India

Support of Regulators The group had representatives of the major regulators in India viz. the Securities and Exchange Board of India (SEBI) Ministry of Corporate Affairs (MCA) Reserve Bank of India (RBI) Insurance Regulatory and Development Authority (IRDA) National Stock Exchange (NSE) Bombay Stock Exchange (BSE)

XBRL India In the h year 2008, 2008 ICAI set up an Indian d XBRL BRL Jurisdiction in the year 2009 as an extended arm of XBRL International in India. India The Jurisdiction was Provisional in nature for a period of 2 years.

XBRL India – An Established Jurisdiction In the year 2010, 2010 XBRL India was awarded the status of an “Established Established jurisdiction jurisdiction” capable of having a representative of India at the International Steering g Committee ((ISC), ), the g governing g body y of XBRL International.

XBRL India – A Company ‘XBRL India’ is now a company registered U/s 25 of Companies Act, 1956. The company is facilitated by ICAI. It has been incorporated for managing the affairs of Indian Jurisdiction of XBRL I t International. ti l

Website of XBRL India A separate website dedicated to the XBRL India Jurisdiction to keep members and other users aware u w about u the Indian X XBRL L Jurisdiction has been set up by the ICAI. g Its URL is www.xbrl.org/in.

Taxonomies Like other standard setters, across the globe, ICAI developed taxonomies based on the Indian Accounting Standards and the Indian Company Law requirements.

Taxonomies The jjurisdiction first developed p a g general purpose taxonomy called the Commercial and Industrial (C&I) Taxonomy which could be used by any Commercial and Industrial Enterprise. It is based on the IFRS 2006 architecture.

C&I Taxonomy This taxonomy was developed through a due consultative process where the Industry experts p reviewed w the draft f taxonomy, my, thereafter it was exposed in the public domain for comments. After finalisation on the basis of comments, the taxonomy was acknowledged by XBRL International.

C&I Taxonomy

Cont….

This taxonomy has been developed to enable companies i prepare their h i financial fi i l statements, viz., Profit and Loss Statement, Balance Sheet and Cash Flow Statement in XBRL format, format based on the requirements of the accounting standards, Indian company law and the requirements i t under d Cl Clause 41 of f the th Listing Li ti Agreement.

Banking Taxonomy Mean while a need was felt to develop Industry-specific Industry specific taxonomy for Banking Sector as their requirement could not be met with the C & I Taxonomy as their format for presentation of financial statement were very different. Theref re Taxonomy Therefore Tax n m for f r banking bankin was as developed.

Banking Taxonomy Banking g taxonomy y is an extension to the core Indian XBRL C&I taxonomy. The banking specific elements have been added to the core schema. The schema file contains all the element d l declarations along l with h there h XBRL properties (including the elements of C&I taxonomy).

Taxonomies in future It is proposed to develop other industryspecific p taxonomies viz. the Insurance and Power sector. Taxonomy for NBFCs is also in the process of development.

Way Forward ICAI being the neutral facilitator of XBRL India Jurisdiction, shall assist the regulators and users of the financial statements by: y Developments of XBRL taxonomies. Ensure compliance of taxonomies with the

requirement of Companies Act 1956 and other relevant legislations (LLP). (LLP)

Way Forward Cont…. Update the existing taxonomies as per the

requirements of the IFRSs on implementation of Indian AS in India.

Maintenance

and updation of the XBRL Taxonomies from time to time as per the requirements and any revisions in the Accounting Standards.

XBRL India-Membership The membership of XBRL India is open to the following categories: (a) Regulators (b) Organizations (c) Academicians Certain parameters have been laid down for the interested organizations and academicians to become member of XBRL India.

XBRL India – MCA Mandate M d t The Ministry of Corporate Affairs (MCA) has i issued d a circulars i l 9 25 37 dated 9,25,37 d d 31/3, 31/3 12/5, 12/5 7/6 2011 mandating certain class of companies for filing their financial statements in XBRL formats for the year 2010-11.

XBRL MCA Mandate X L India n a–M Man at Cont…..  Considering the requirement for training professionals

in view of the mandate issued by MCA, it has been decided to p provide trainings g in collaboration with CMII and CPE Committees of ICAI across the country. However, to start with the hands on training on XBRL filing, g, it shall be imparted p at the metros and bigger cities viz. Bangalore, Ahmedabad, Pune etc. as of now, covering 17 cities in all in the initial phase, which shall be extended to other cities in the future  XBRL India is also developing basic Training material and schedule on the basic concepts and process involved in XBRL filings. filings

XBRL India – Road Ahead It

is proposed to design the XBRL Certification Programs in India for the promotion and education of XBRL in India.

Facilitating education in XBRL through a

series i of f conferences.

workshops, k h

seminars i

and d

XBRL,, India – Road Ahead Cont….. Roping in other regulators like CBDT/ IRDA

for implementing XBRL in their reporting requirements. i t

Launching a certificate e-learning course on

XBRL

Complicated process of reading, understanding and

presenting XBRL filings

Enormous number of categories in XBRL, making

manual m n l filing filin tim time consuming, n min expensive xp n i and nd inaccurate

No real automatic solutions available on the

market

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 Available on the market that combine all XBRL tools

into a single user interface  Available on the market that can do both: generate g XBRL filing and map existing XBRL to document with filed data with a single user interface  In the market that provide instant XBRL filing corrections during the validation process  In the market p providing g bidirectional links between the original document, XBRL filing, calculations and validations results

www.xbrl.org XBRL Australia www.xbrl.org/au  XBRL Belgium www.centraledesbilans.be www centraledesbilans be XBRL Canada www.xbrl.ca  XBRL Denmark www.xbrl.dk XBRL Europe www.xbrl.org/eu www xbrl org/eu XBRL France www.xbrl.org/fr XBRL Germany www.xbrl.de GRC GRC‐XML XML www.xbrl.org/grc www xbrl org/grc‐xml xml XBRL India www.xbrl.org/in 16 June 2011

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XBRL Ireland www.xbrl‐ie.org g XBRL Japan www.xbrl‐jp.org XBRL Korea www.xbrl.or.kr XBRL Netherlands www.xbrl‐nederland.nl XBRL Poland XBRL P l d www.xbrl.org/pl bl / l XBRL RIXML www.rixml.org XBRL South Africa www.xbrl.org/za XBRL Spain www.xbrl.es www xbrl es XBRL Sweden www.xbrl.se XBRL United Arab Emerates www.xbrl.org/ae XBRL United Kingdom www.xbrl.org/uk www xbrl org/uk XBRL United States www.xbrl.us 16 June 2011

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 XBRL in MCA  Implementation Approach of

XBRL in MCA  Filing Manual  MCA validation Tool

 Business rules for XBRL

reporting  C&I Taxonomy axonomy  Taxonomies in MCA  Scope and Level of Tagging  Instance Document

http://xbrl.icai.org/2011/04/26/press-release-1/ 16 June 2011

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A little bird was flying south for the winter. It was so cold, the bird froze and fell to the ground in a large field. While it was lying there, a cow came by and dropped some dung on it.

PURR....

As the frozen bird lay there in the pile of cow dung, it began to realise how warm it was. The dung was actually thawing him out! He lay there all warm and happy, and soon began to sing for joy. Ap passing g cat heard the bird singing g g and came to investigate. g Following the sound, the cat discovered the bird under the pile of cow dung, and promptly dug him out and ate him!

The morals of this story are:

1) Not everyone who drops shit on you is your enemy. 2) Not everyone who gets you out of shit is your friend friend. 3) And when you're in deep shit, keep your mouth shut

[email protected] @ g 16 June 2011

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