Implementing XBRL

Developing a roadmap for the SEC mandate

Contents 1 2 4 14

What is XBRL?

XBRL and the SEC

Implementing XBRL

Focus on quality

To our clients and friends

For several years now, momentum has been building towards a single electronic financial reporting standard to allow more efficient retrieval and analysis of financial information. One of the key objectives of this movement to digital financial reporting is to enhance the accessibility of financial information, which proponents believe will be utilized better, faster and cheaper. Furthermore, a digital format would support more informed business and investing decisions, including greater comparability across enterprises. The SEC has required filers to begin using “interactive data” — eXtensible Business Reporting Language (XBRL) — as the electronic financial reporting standard. This indicates the dawn of a new digital era in business and financial reporting.

This document is intended to help companies develop an XBRL implementation strategy that includes an understanding of the key considerations and decisions required to create a quality XBRL submission. Thus allowing investors, analysts, regulators and other financial statement users to realize the full benefits of XBRL. It outlines the building blocks for a company’s XBRL implementation plan. The foundation of this plan is for a company to develop the necessary background on XBRL basics and the SEC’s XBRL mandate. With an implementation framework comprised of education, preparation and compliance, the development of a company’s XBRL implementation plan can begin to take shape. As with every new regulatory mandate or legislation, we encourage organizations, as a critical first step, to conduct an internal assessment of their needs to determine how the rule will affect their business. We hope you find this publication useful in assessing your needs and determining your next steps in implementing XBRL.

Implementing XBRL | Developing a roadmap for the SEC mandate

XBRL related terminology

Block text — A block of information, such as a financial statement note, that can be tagged using a single block text taxonomy tag. Bolt-on — Expected to be the most commonly used approach for creating XBRL, this approach can use existing financial statements as the basis for creating XBRL (as opposed to an integrated creation as part of the financial reporting process), or by consolidating different data sources. The bolt-on approach is achieved using XBRL creation software or outsourcing the creation of XBRL using a third party. Contexts — Component of an XBRL instance document that is assigned to each piece of tagged data and contains defining meta-data, including reporting period, entity and other information. Detail tagging — The tagging of information such as a financial statement footnote using multiple tags to capture individual pieces of information within the footnote. Dimensions — Information in an XBRL taxonomy that allows for the representation of the horizontal and vertical axes in a financial statement table such as the Statement of Equity. Dry-run — Essentially the act of performing a practice run of the entire XBRL creation, review and test submission process in preparation for the actual submission of XBRL to the SEC. Extensions — Modifications to a standard taxonomy. XBRL allows users to create company taxonomy extensions, including adding new tags, creating custom labels and editing various relationships between tags.

Instance document — XBRL file containing a company’s financial information reporting periods and other related information. The instance document uses tags from taxonomies such as the US GAAP taxonomy as well as extension tags. Integrated — An approach where XBRL creation is integrated with existing accounting and reporting processes such as an accounting or financial reporting software system. Interactive data — Real-time exchange of businesses’ information using XML and other electronic technologies such as XBRL. Meta-data — Means “data about data,” or the various contextual detail that defines the financial reporting information, such as the type of data or reporting period. References — Part of a taxonomy used to associate tags to authoritative accounting literature that is used to support the selection of tags as a secondary criteria. References (when they exist) usually represent disclosure requirements or definitional information associated with the financial concept for a tag and are not meant to be the full definition of a tag (i.e., references often do not include the recognition or measurement guidance for that concept). Relationships — Part of a taxonomy (linkbases) used to define specific associations and other information about tags. There are five standard linkbase types: Presentation, Calculation, Definition (Dimensions), Labels and References. Rendering — A human-readable presentation of an XBRL instance document used to review aspects of its contents. Tag Definition — A description of a reporting concept represented by a “taxonomy documentation label” used to help identify if a given tag is appropriate.

Tagging — How individual financial reporting and other data (e.g., values, textual data) are identified using elements from the taxonomy. Taxonomies — Electronic dictionaries of tags (elements) that define financial and other information and the relationships between them related to a defined reporting framework (e.g., US GAAP taxonomy). US GAAP taxonomies — Standard taxonomies developed to contain US GAAP financial reporting concepts necessary for submitting primary financial statements, notes and supplemental schedules with the SEC. Validation — Various checks for different layers of consistency and comparability for determining if XBRL is created properly. VFRP — Voluntary Financial Reporting Program started by the SEC in 2005 to evaluate and assess both the ability of companies to tag their financial information using XBRL and the costs and benefits of using XBRL-tagged data for analysis. XBRL GL (global ledger) — Future prospect for using XBRL to handle information that is found in a chart of accounts, journal entries or historical transactions (financial and non-financial), using an XBRL taxonomy and rules specially designed to transfer information from one ledger to another (e.g., roll up subsidiary ledger to general ledger). XBRL US — The US jurisdiction of XBRL International, a notfor-profit consortium of approximately 500 companies and agencies worldwide that developed the XBRL language, as well as promote and support XBRL adoption. XBRL US developed and maintains the XBRL US GAAP taxonomies.

What is XBRL?

eXtensible Business Reporting Language (XBRL) is the financial and operational business reporting offshoot of Extensible Markup Language (XML), which is a freely licensable, open technology standard used to electronically exchange business information. XML is a universally preferred data description language used to describe the storage, manipulation and exchange of data via the internet.
The idea behind XBRL is simple. Instead of treating financial information as a static text — as in a standard internet page or a printed document, XBRL provides an identifying tag for each individual item of data, whether numeric or textual. This tag is computer readable and allows the information to be used interactively. XBRL allows for the exchange and analysis of business reporting data by encoding information in a meaningful way. Computer applications can use XBRL data “intelligently” — recognizing the information in an XBRL document — and then applications can select it, analyze it, store it, exchange it with other computers and present it in a variety of ways to users. XBRL tags are used for the presentation and definition of information. Tags are defined and maintained in taxonomies that contain meta-data such as label, definition, data type and period type. Taxonomies are the dictionaries that are used to identify information included in these electronic documents. XBRL is extensible (i.e., capable of being extended). A registrant can create, define and describe new tags that may be unique to its own circumstances, while otherwise maintaining the comparability of its other information tagged using the standard taxonomy. XBRL is designed to be flexible and is intended to support all current aspects of financial reporting across countries and industries.

Benefits of XBRL
A number of groups are likely to benefit from XBRL including investors, governments, regulators, economic agencies, stock exchanges, financial information companies, executives, financial analysts and creditors. Supporters believe XBRL offers major benefits at all stages of business reporting and analysis. The benefits should be visible through increased automation, cost savings and faster, more reliable and accurate handling of data. For consumers, XBRL allows investors to concentrate their efforts on analysis, aided by software that can validate and compare XBRL information from company to company, or across industry sectors. Standardized financial data results in improved analysis and higher quality information for decision making.
Who is using XBRL? In Asia, regulators in China, Japan, Korea and Singapore have mandated the use of XBRL for some reporting requirements.

Initially, preparing reports using XBRL will likely require additional effort for many organizations, particularly with respect to tagging the various elements of information included in notes to the financial statements. Much of the work in tagging XBRL documents is performed the first time each report type is created. On an ongoing basis, each new XBRL instance document is created with current data and leverages previous efforts.

In Europe, XBRL adoption is primarily driven by banking regulators (e.g., France, Belgium), tax authorities (e.g., Netherlands, UK) or stock exchanges (e.g., Spain).

In the US, the Federal Deposit Insurance Corporation (FDIC), Office of Thrift Supervision (OTS) and Office of the Comptroller of the Currency (OCC) have required banks to submit quarterly call report information in the XBRL format since late 2005.

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XBRL and the SEC

On 30 January 2009 the SEC published a final rule that requires the use of interactive data (XBRL) for financial reporting. The SEC’s phase-in begins for certain companies with quarterly periods that end on or after 15 June 2009. By late 2011 all primary financial statements, notes and schedules for most public companies will be available in XBRL.

Who: Initially, the requirement is for domestic and foreign SEC filers using US GAAP, but the rule will eventually include filers using International Financial Reporting Standards (IFRS)*. XBRL financial statement tagging does not apply to: • An investment company registered under the Investment Company Act • A “business development company,” as defined • A foreign private issuer (FPI) that presents its financial statements without using either US GAAP or IFRS (as issued by the International Accounting Standards Board) What: XBRL will be phased-in over three years beginning with the first Form 10-Q (or for FPIs, their first Form 20-F or 40-F, if applicable) for the period ending after the specified transition date. Interactive data will be required for, and is limited to, a company’s annual and quarterly financial reports, transition reports related to a change in year-end, and reports on Form 8-K and 6-K that contain updated financial statements that were tagged when originally filed, as well as Non-IPO Securities Act registration statements. The information to be
* IFRS as issued by the International Accounting Standard Board (IASB). 2

tagged in XBRL for these reports is limited to the face of the financial statements, footnotes and schedules. The face of the financial statements needs to be tagged in each company’s first year of interactive data reporting. The financial statement footnotes and schedules in each company’s first year of interactive data reporting only need to be tagged in block text only. In its second year, a company would be required to tag footnotes using the following four levels of detail: • Each complete footnote tagged as a single block of text (as would be required by a company in its first year of compliance) • Each significant accounting policy within the significant accounting policies footnote tagged as a single block of text • Each table within each footnote tagged as a separate block of text • Within each footnote, each amount (e.g., monetary value, percentage, number) separately tagged. The tagging of narrative disclosure text is not required, but optional

In addition, in the second year, a company would be required to tag financial schedules using the following two levels of detail: • Each complete financial statement schedule tagged as a single block of text (as would be required by a filer in its first year of compliance) • Within each financial statement schedule, each amount (e.g., monetary value, percentage, number) separately tagged The SEC is not requiring or permitting tagging of information other than the financial statements, footnotes and schedules (e.g., management’s discussion and analysis or executive compensation disclosures). How: • To create the interactive data files, companies are required to define, or “tag,” their financial statements using elements mainly from the appropriate standard list of tags. However, companies must extend the standard list of tags for financial concepts not included. • The disclosure submitted in interactive data format would be an exhibit to, but not replace or change, the filed financial statements using the traditional electronic filing formats in ASCII or HTML.

Implementing XBRL | Developing a roadmap for the SEC mandate

Phase 1 Phase 2 Phase 3

• The rule requires that companies provide to the SEC a new exhibit with their financial statements, including the footnotes and schedules to the financial statements, in interactive data format. Other rule provisions: • XBRL exhibits must comply with the updated SEC EDGAR Manual which contains over 200 rules. • XBRL exhibits are required to be submitted with the related EDGAR filing, except for 30-day grace periods for a company’s initial submission and its first detailed tagging of notes and schedules. If a company chooses to avail itself of the 30-day grace period, it must file the XBRL exhibit as an amendment to the related SEC filing. • With the exception of a 24-month phase-in period, the XBRL file submitted to the SEC will be subject to the same liability as the traditional financial statements. For the initial two years a registrant must comply with the rule, its XBRL submissions will have liability limitations, which terminate completely on 31 October 2014 for all registrants under the rule. • XBRL exhibits are required to be posted on the company’s website on the same day they are submitted to the SEC. • Companies that do not provide or post required XBRL on the date required are deemed not current with their Exchange Act reports and, as a result, would not be eligible to use short form registration. In addition, they would not be deemed to have available adequate current public information for purposes of the resale exemption safe harbor provided by Rule 144. However, such a delinquent company will be considered to be current in

its reporting obligations immediately upon remedying the delinquency. Additional SEC activities: The SEC has been monitoring XBRL for several years, and has taken several steps, including: • VFRP — instituted a Voluntary Financial Reporting Program in the spring of 2005. Over 120 companies have participated in the SEC’s VFRP, designed to allow companies, on a voluntary basis, to furnish supplemental financial information using XBRL through EDGAR. The SEC’s aim was to assess both the ability for companies to tag their financial information using XBRL and the costs and benefits of using XBRL tagged data for analysis. The SEC’s VFRP ends on 13 April 2009 for all non-investment companies under the final rule. • US GAAP Taxonomy — Funded the development of XBRL US GAAP taxonomy. • Risk and return — Adopted a separate rule to require mutual funds to use XBRL to tag risk and return information for periods beginning on or after 1 January 2010. • Rating agency — Issued a rule in February 2009 requiring rating agencies to utilize XBRL in tagging rating changes. • IDEA — Unveiled plans for IDEA (Interactive Data Electronic Applications), the successor to the agency’s existing EDGAR system, which accepts the XBRL format. IDEA is designed to make greater use of XBRL reporting and analysis capabilities.

Timing of when the rule applies
Large accelerated filers* using US GAAP Worldwide public common equity float above $5 billion** Applies for fiscal periods*** ending on or after 15 June 2009

All other large accelerated filers* using US GAAP Applies for fiscal periods ending on or after 15 June 2010

All remaining filers using US GAAP, includes smaller reporting companies Foreign private issuers using IFRS Applies for fiscal periods ending on or after 15 June 2011

*Exchange Act Rule 12b-2 generally defines “large accelerated filer” as an issuer that has common equity held by unaffiliated persons with a value of at least US $700 million, has been subject to the Exchange Act’s periodic reporting requirements for at least 12 months, has filed at least one annual report and is not eligible to use the disclosure requirements available to smaller reporting companies for its periodic reports. **Worldwide public float is defined as the aggregate worldwide market value of the voting and non-voting common equity held by non-affiliates as of the last business day of the second fiscal quarter of the company’s most recently completed fiscal year (i.e., the same measure used to determine accelerated filer status). That is, a calendar year filer will determine its eligibility for the first phase-in group using its worldwide public float measured at 30 June 2008. ***For the first Form 10-Q (or for FPIs, their first form 20-F or 40-F, if applicable) for the period ending after the specified transition date.

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Implementing XBRL

In general terms, there are three major steps in preparing for and complying with a move to digital financial reporting through XBRL.
First—year XBRL timeline (for any phase)

The three major steps of an XBRL implementation framework include: • Educate and assess — The time to learn more about XBRL and better understand the specific regulatory requirements and implementation timeline. • Prepare for the rule — The “think, design and build” phase, which includes mapping of financial statement information to the appropriate XBRL taxonomy (e.g., IFRS, SEC). • Comply with the rule — Create, review and submit the appropriate XBRL documents to the regulatory authorities. This three-step process, depicted in the graphic and outlined here in more detail, may vary based on the organization’s decisions (e.g., managing XBRL efforts “in-house” vs. outsourcing). For each step in the process, look at the key activities, decisions and action items within the step. When implementing this framework, some companies may strive for a more self-sufficient XBRL implementation at the outset, while others will choose an interim approach with the intent of evolving to an optimal implementation approach after gaining experience with XBRL. For example, many companies may use an EDGAR filing agency to create their first-year XBRL submissions, and later transition to creating XBRL documents themselves in year two or three. By taking this approach, companies may more effectively manage the tagging of notes and supplemental schedules to the financial statements at the lowest level of detail (potentially hundreds of additional tags for some companies).

Educate and assess
• Understand SEC plans • Learn about XBRL and taxonomy • Assess needs and readiness

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Thirty day grace period

Prepare for the rule
• Design and build creation process • Map financial information to taxonomy • Perform an XBRL “dry-run”

2

Comply with the rule
• Create XBRL documents • Review XBRL documents • Submit XBRL documents
Nine months prior to first submission due Six months prior to first submission due Three months prior to first submission due

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Educate and assess

The first step in the framework involves taking the time to learn more about XBRL, the specific details surrounding the SEC rule and assessing unique aspects of an organization that may affect XBRL implementation. A critical point to consider, however, is that having only one person in an organization who is knowledgeable about XBRL may not be sufficient. Key stakeholders across the enterprise should invest the appropriate time to learn about and discuss the implications of implementing XBRL. During this step, companies should focus on the following activities to prepare for XBRL: • Understand the overall regulatory requirements for implementing XBRL • Identify an internal XBRL “point-person” or coordinator (i.e., process owner) to coordinate the process, including educating key stakeholders • Assess the need, if any, for outside technical support or assistance with XBRL tagging and/or internal issues to manage the XBRL implementation in-house

• Explore and better understand the various implementation approach options: − Internal skills needed within the organization to implement XBRL − External assistance options from vendors and advisory firms − Tools and software packages available to support the transition to XBRL Communication, coordination and education Companies should first gain a clear understanding of the regulatory authority’s plans and requirements for XBRL and to assess the potential effects and options around implementing XBRL. The SEC rule and EDGAR Manual detail the timing and requirements for each company and should be carefully analyzed and clearly understood. The learning curve for XBRL is steep and requires a mix of technical and accounting skills to fully understand how best to create a quality XBRL submission. Often, the best starting point is to identify an individual within the organization to

serve as the XBRL point-person, or coordinator, for the effort. For most organizations, this individual will be part of the company’s external financial reporting group. Training and education are also important aspects in this initial step. Websites for XBRL US (www.xbrl.us), Ernst & Young (www.ey.com/xbrl) and regulatory authorities (www. sec.gov) are good resources for the XBRL point-person to start his or her education. XBRL will affect an organization by placing additional pressure on the management and coordination of the financial reporting process. As a result, teaming and overall coordination are important. Taking the time to educate key stakeholders on XBRL is critical. Assembling a core team and gaining access to the right resources and materials are important ingredients to developing a high-level implementation plan. In developing the high-level plan, coordination across enterprise business units and functional areas is essential. For example, the XBRL point-person or core team needs to communicate how XBRL will affect the various departments that participate in the financial reporting process, including areas such as investor relations, general counsel and information technology.

Reasons to get XBRL right

• Maximize usefulness to investors • XBRL files that do not pass SEC validation criteria will not be accepted • SEC comments may result in amended filing, prospective changes or other SEC action

• Exposure to Securities Act or Exchange Act Liability • Inaccuracies may cause users to find the XBRL: − Inconsistent with the traditional format of the financial statements

− Inconsistent with comparable companies − Not usable by all XBRL-enabled software

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Implementing XBRL

Learn about XBRL: Implementation approaches There are two basic approaches to creating XBRL documents for financial reporting, each with a range of options to be considered: Internal creation: This involves the company creating the XBRL documents, and can be accomplished by using standalone XBRL creation software as part of a “bolt-on” creation process that uses existing reporting formats as the source for the XBRL. Another alternative is a process in which data (including footnotes) are integrated and managed from various sources to create XBRL. The bolt-on process is based on financial information from the existing reporting process using developed electronic formats such as Microsoft Excel, Word, HTML, PDF, etc., which is then used as the source data for creating XBRL-formatted financials. This bolt-on process could evolve to where the XBRL-formatted financial statements are being partially or fully generated from the organization’s financial reporting system.

Outsourced services: This involves outsourcing different components of XBRL implementation (e.g., project management, XBRL tagging, XBRL creation) to a thirdparty service provider with the company reviewing the results. Different outsource providers offer varying levels of assistance. For example, some service providers may involve company personnel actively in the process of determining the tags used, while others may not require company input until the review process. Due to the technical complexity of creating XBRL instance documents and taxonomy extensions, and the relative immaturity of XBRL software, many users are expected to use a partial or full outsourcing model initially. When XBRL services are not entirely outsourced, the need for a thirdparty advisor should be evaluated early in the process.

Implementation approach criteria There are several criteria to consider when choosing an internal or outsource implementation approach. The selection of an implementation approach depends on those criteria that are most important to the company, and may change over time. • Control — How much control does the company want over the implementation process? The desire for more control typically favors an in-house approach. • Cost — How much does the company plan to spend on implementation and what is the available budget for outside support? Internal resources are not without costs and may result in a lower level of efficiency. • Knowledge investment — Does the company have the level of knowledge necessary to successfully implement XBRL and to produce a quality XBRL submission? What investments are the company willing to make to assign internal resources to do this work? • Level of effort — What level of effort can personnel effectively devote to the creation of XBRL? In addition to knowledge and experience, do they have the capacity? • Timing — What is the overall timing and current status of efforts relative to regulatory requirements? Is the company on track or is it behind?

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• Future functionality — What are the future functionality needs (e.g., tagging of detail notes and integrating creation into the financial reporting process)? It is important to note that companies can move from one approach to another, and many in the SEC’s XBRL VFRP have done so. Outside support needs and internal readiness A company may want to consider obtaining external assistance to help it determine the criteria for and selection of an implementation approach, help provide an independent assessment of its readiness in meeting the SEC requirements and help it develop its plans.

It is important for an organization to assess its internal readiness level and specific needs to meet the SEC requirements. One helpful and time-saving step in assessing XBRL implementation is to talk to companies that have participated in the SEC’s XBRL VFRP. These participant companies can offer insights into the challenges and leading practices of XBRL implementation. They can provide feedback on the creation approach initially utilized, their current approach and future plans to tag notes in detail. They can also provide insight on the various XBRL software vendors and service providers they used.

Desired outcomes:
• An XBRL point-person, or coordinator, is identified to coordinate the process • Key stakeholders understand XBRL basics and the SEC rule requirements • Management understands the effects of XBRL on financial reporting, including unique aspects that will affect implementation • Company has determined its interest and ability to develop XBRL-skilled resources • Company understands and has assessed the different implementation approaches • Company has determined if outside assistance is needed (e.g., EDGAR filer, software vendor, auditor)

IDEA (Interactive Data Electronic Applications)

This new system is designed to give investors faster and easier access to key financial information about public companies and mutual funds. According to the SEC, it will at first supplement and then eventually replace the EDGAR system.

The decision to replace the EDGAR system marks the transition from collecting forms and documents to making the information freely available to investors in a more userfriendly electronic format. This electronic format (including XBRL) will help analysts and

investors move from the existing process of manual sifting and then re-keying the information for analysis, to being able to instantly search, collate and analyze the information for thousands of companies.

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Prepare for the rule

The second step in the process involves preparing for the specific regulatory rule, or rules, concerning XBRL that will affect an organization. Essentially, this step involves the following activities: • Design and build the XBRL creation process • Determine the specific approach and process to map financial information to create XBRL documents • Identify software needs and contract for tools and/or thirdparty service providers • Map financial information to appropriate taxonomy (e.g., US GAAP or IFRS) and determine the level of tagging with XBRL • Perform an XBRL “dry-run” Design and build creation process As previously outlined, there are two basic approaches to XBRL implementation, or creation (internal creation and outsourced services), each with a range of options. Because of the different implementation approaches and the continued development of solutions for the market, XBRL implementation for many companies will be an evolutionary process. In other words, they may start with one approach and transition to another. As more integrated options become available, many companies will likely move from a manual or outsourced bolt-on model to a more integrated and consolidated creation process.

In preparing for the rule, the implementation approach (i.e., internal creation vs. outsourced services) needs to be finalized. For example, in an outsourced approach, which specific elements (e.g., project management, XBRL tagging, XBRL creation) will be outsourced? Software selection XBRL is still an emerging technology. Given the size and complexity of the XBRL US GAAP or IFRS taxonomies, companies should select the appropriate XBRL creation software carefully by considering the following: • Ease of use • Costs • Training and support considerations • Ability to fully extend taxonomy • Ability to tag notes in detail • XBRL and regulatory authority validation requirements • Compatibility with existing formats (e.g., PDF, Word, Excel, HTML) • Review and validation capability • Rendering capabilities (e.g., compatibility with SEC or other regulatory viewer requirements) − Desired level of automation − Comprehensive compatibility with all aspects of the relevant taxonomy or future taxonomies such as IFRS

A critical consideration when selecting software is full compatibility with all aspects of the SEC rule and EDGAR Manual XBRL requirements, and the US GAAP or IFRS taxonomies. As a result, it is best to understand how the XBRL software being considered supports these important requirements. Third-party implications While third-party creation services are expected to be the common method for many companies to initially create their XBRL filings, certain considerations should be examined before determining if the third-party approach, or a specific third-party vendor, outweighs the benefits of performing XBRL tagging in-house. The preparer is ultimately responsible for XBRL mapping and the resulting XBRL documents. As a result, the preparer should clearly outline the responsibilities of the third party to help maintain a robust process resulting in the desired output. Financial reporting experts should participate in the mapping of the company’s financial statements to the US GAAP taxonomy, including a detailed review of the results. Some of the key considerations that relate to outsourcing with a third party include: • A cost-benefit analysis associated with the third-party approach • The specific knowledge of the company’s business and industry • The ability to deliver XBRL content in a timely fashion • The effectiveness of the process and tools utilized for XBRL creation

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• The level of XBRL experience and expertise on the client service team • The representations from the third party to management on its responsibility for, and extent of, validation procedures on the XBRL exhibit. Map financial information to taxonomy The first step is to determine the right XBRL taxonomy (e.g., US GAAP, IFRS). In preparing for the rule, take the time to review and understand the different taxonomies, including industry variations. The US GAAP taxonomy has several different industry “entry points.” These entry points represent a set of tags that have common relationships based on industry, including specific tags and variations in reporting structures (e.g., classified vs. unclassified balance sheets). If an organization’s specific industry is represented by the taxonomy and is appropriate for its business, companies should use that taxonomy as the entry point. It is important to note that a specific industry entry point may not represent relationships for all elements in the US GAAP taxonomy. It is therefore critical to be aware of this risk when a company performs its mapping process, as navigation of relationships should not be the only method for finding tags. Additionally a full search of all taxonomy tags should be performed in order to assess all available tags. The next step is to map the financial statement information to the most appropriate taxonomy tags. In this step, it is important to capture the right information, including alternative options and extension details. A mechanism for capturing this information such as a structured spreadsheet

More about XBRL taxonomies
Taxonomies are the basis for tagging financial statements, supplemental schedules and notes to the financial statements in XBRL. A taxonomy is an electronic dictionary defining thousands of business reporting concepts (including text) and their relationships. The taxonomy provides details for each concept, including the labels, definitions, accounting balance (i.e., debit or credit), presentation and summation information. The SEC uses the XBRL US taxonomy, which is maintained and updated by XBRL US, to reflect changes in the US GAAP and SEC financial statement disclosure requirements, as well as changes in common reporting practice. The US GAAP taxonomy is expected to be updated once a year with new content and improvements. Additionally, interim extensions to the US GAAP taxonomy will be released as needed to provide timely content not available in the current release. Additionally, companies should understand the impact of subsequently issued taxonomies and consider how some of their extension tags might be incorporated into future versions of the taxonomy. The XBRL US GAAP taxonomy can be found and viewed at the XBRL website at www.xbrl.us.

ABC Corporation (in millions) Balance sheets June 30 2009 2008

21,081 – What is being tagged? Cash/cash equivalents: 21,081,000,000 Currency: US dollars Reporting period: 2008-06-30 Balance: Debit
$ 19,188 54,322 73,510 35,601 3,538 5,962 7,514 126,125 $ 21,081 86,183 107,264 29,252 4,640 6,091 6,641 153,888

Assets Current assets: Cash equivalents Short-term investments (including securities pledged as collateral of $3,797 and $9,624) Total cash and short-term investments Accounts receivable, net of allowance for doubtful accounts of $357 and $426 Inventories Deferred income taxes Other Total current assets

Company: ABC Corporation Statement: Balance sheets Definition: Cash equivalents, excluding items classified as marketable securities, include short-term, highly liquid investments that are both readily convertible to known amounts of cash, and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates

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Implementing XBRL

for organizing and communicating taxonomy tagging information is needed. This recording mechanism has the added benefit of providing a trail of the thought process and tagging decisions, including alternative considerations. In addition, you may want to understand how and when the taxonomy is updated, and the process for providing feedback to help with future submissions. In order to obtain feedback on the taxonomy, XBRL US recommends that companies consider sending their identified extension tags that might apply to other companies (e.g., specialized industries) in order to minimize the need for future extensions. Due to its relative immaturity, specialized industries that use the XBRL US GAAP taxonomy will likely need to create more extension tags. Deciding on the most appropriate tags and extending the taxonomy are vital tasks. The SEC’s stated intent is to review non-standard (extension) tags, especially when companies choose to extend the taxonomy because it does not contain a financial concept represented in the financial statements. Due to the nature and size of the taxonomies, identifying the most appropriate tag is a skill developed over time. For example, during the mapping process a company may encounter two tags that appear to represent its financial data, but one tag is more general and the other more specific. Although both may seem accurate, a decision needs to be made as to the better tag to use. In cases where a public XBRL taxonomy (e.g., US GAAP) does not provide the necessary tag for an organization’s financial statement, an extension tag can be created in a taxonomy extension without altering the original taxonomy. The preparer will need to determine if any extensions need to be made to the taxonomy to report its financial information,

and a preliminary mapping process would determine those needs. The following summarizes some of the EDGAR Manual rules when selecting the appropriate taxonomy tags: • Use the tag with a period type that matches the amount being reported. For example, “instant” period type is for values that are only measurable at a point in time; while the value “duration” is used for all other elements, including textual information. • Use the tag with the most specific type where facts are consistently reported in one or more periods. For example, use a tag with monetary type (tagged as a dollar amount) over a tag whose type is string (tagged as text) when tagging a monetary fact. • A tag’s definition (documentation label) must match all of the facts being tagged by it. If any of the amounts being tagged do not match the tag’s definition or it explicitly excludes one or more of the amounts tagged by it, another tag must be used. • When there is more than one tag with a definition that fits a fact being reported, use the tag with the narrowest definition. • If there is a choice between standard tags with distinct references, use the tag with the more specific reference. • If a taxonomy tag’s label does not match exactly to a company’s line item caption, it should be changed in a company’s extension without adding a new tag.

The different relationships (presentation and calculation) used to navigate the US GAAP taxonomies are based on industry variations in common reporting practices (financial statements, footnotes and schedules). These relationships assist users viewing tags by providing clues as to their meaning, but are not the best mechanism for selection, because tags may not be found in the expected hierarchy (e.g., an appropriate tag for a balance sheet caption may actually be located under the note hierarchy, not the balance sheet hierarchy). If a tag cannot be found for a given financial reporting concept, companies should use a search mechanism that searches all taxonomy tags regardless of industry entry point, and look in other areas in the taxonomy trees (e.g., tags that one company might use on its balance sheet might be located in the notes to the financial statements). It is important to note that not all search mechanisms function in the same way (e.g., search all tags and tag criteria). If after a thorough search an accurate or specific-enough tag cannot be found, that element should be added in a company’s extension taxonomy. Consult the SEC EDGAR Manual (www.sec.gov) and the XBRL US Preparers’ Guide (www.xbrl.us) for more information on tag selection and the different industry entry points into the taxonomy.

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Implementing XBRL | Developing a roadmap for the SEC mandate

Website functionality As mentioned previously, the SEC rule requires companies to simultaneously post their XBRL submissions on their corporate website when they are submitted to the SEC. In addition, companies could also: • Provide a user-friendly viewer for the posted XBRL documents • Provide an interactive mechanism to analyze and compare the XBRL documents (i.e., compare between reporting periods, perform simple ratios or other analysis) To maximize XBRL benefits for investors, many companies are expected to provide a mechanism for viewing or interacting with XBRL data on their website. The assessment of website functionality should weigh the timing, cost and level of effort against the perceived benefits to investors and analysts.

Dry-run of the XBRL process The old adage “practice makes perfect” applies to XBRL. Public companies that currently are not required to submit XBRL exhibits should begin creating XBRL exhibits prior to the first required reporting period. In addition, companies might weigh the benefits of detail tagging their notes before they are required to do so. If a company chooses not to submit XBRL before it is required, it may want to consider performing a “dry-run” of the XBRL creation process prior to its initial required filing. A leading practice consideration is for companies to go through the newly designed process as a “dry-run” of the XBRL creation, review and submission process to assess the experience and modify the process as needed. The “dryrun” could include uploading a test submission to the SEC website to assess if it meets the SEC automated validation requirements and viewing the test submission using the SEC’s XBRL previewer.

Desired outcomes:
• Overall approach and implementation plans finalized • XBRL creation software and/or third-party service providers selected • XBRL budget approved and the overall roles and responsibilities for key personnel outlined • The specific XBRL taxonomy to be used has been identified • Preliminary mapping of financial concepts to relevant taxonomy tags and identification of extensions completed • Validation and review processes are developed and key processes tested • XBRL website plans developed • A pilot or “dry-run” of an XBRL submission conducted to gain experience

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Comply with the rule
Review XBRL documents The next task is to review the resulting XBRL documents. The issues and concerns during the XBRL review process extend beyond the need to identify the most appropriate tags. In addition to tag selection, the review must be broader in its scope and include the accuracy, completeness, rendering and structure of the data in XBRL. Since XBRL is a technical standard, it needs to conform to both the XBRL specification and the specific requirements of the SEC. Testing the XBRL for conformity is commonly known as validation. Validation is an important part of the XBRL review process. The review process includes the validation of the XBRL documents at various levels, from a technical perspective to checking the accuracy of the tagging. The key focus areas include accuracy and consistency. The diagram outlines the three basic risks related to the propriety of the XBRL documents. There are five basic review activities that can be performed to address the three basic risks. The five basic review activities are: 1. Compare the XBRL tagged data in the SEC previewer to the official filing — The SEC has made available its viewer code to allow filers to see how their XBRL would appear once submitted to the SEC. By using the previewer, filers can review their SEC submissions for material consistency with the official financial statement filings. 2. Manual review of XBRL tags — Companies must put sufficient diligence into the review of selected tags to determine that they are the most appropriate.
Risks
Viewable form of XBRL does not reflect the related official filing

The third step in the process involves complying with the SEC rule, and includes the following activities that are performed around the creation, review and submission of XBRL for financial reporting: • Create XBRL documents • Review XBRL documents • Determine auditor involvement, if any • Submit XBRL • Assess short- and long-term implications Create XBRL documents The first task in complying with the rule is creating the XBRL documents. Using the selected XBRL implementation approach (i.e., internal vs. outsourced services), the experience from the “dry-run” process will help provide a solid foundation for the formal creation of XBRL documents for submission. As discussed previously, key elements in this step are the mapping of financial statements to XBRL tags, including any taxonomy extensions, and the creation of an XBRL instance document. It is recommended that companies using a third-party outsource provider, such as an EDGAR filer, obtain commitment from the provider to communicate any judgments or interpretations of the SEC rule and EDGAR Manual made on their part during the creation of the company’s XBRL documents. This step will help companies better understand the XBRL creation process and in turn become educated on any decisions made during the mapping and creation of their XBRL exhibit by a third party.

Review activities
Compare XBRL in SEC previewer to official filing Manual review of XBRL tags (including comparing to the taxonomy) • Use XBRL validator • Test submit to EDGAR • XBRL markup review

Considerations
Guidance: • SEC requirements (including EDGAR Manual) • XBRL US Preparers’ Guide (including consistency checks) • XBRL technical specifications Potential assistance: • EDGAR filers • Software vendors • Auditor • Other

Amounts and Block Text are not appropriately tagged XBRL dimensions, calculations and other technical requirements are not valid

3. Use XBRL validator — There are third party software validation routines (both in stand alone software and as part of XBRL creation tools) that will assess if an XBRL exhibit complies with the XBRL technical specifications. By using validation software, companies can assess the XBRL exhibit’s compliance with the XBRL technical specifications. 4. Test submit to EDGAR — In order to evaluate whether an XBRL exhibit would be able to be uploaded into EDGAR, companies have the ability to voluntarily submit XBRL exhibits through the SEC’s test submission process. The test submission software processes XBRL exhibits in a manner similar to the EDGAR system. By making a test submission, companies may be able to identify issues that would prevent acceptance by EDGAR.

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5. XBRL markup review — In order to comply with the SEC EDGAR Manual, companies must verify that all details present in the existing filings are properly captured in the actual XBRL submissions (e.g., proper use of contexts and calculations). Auditor involvement The SEC rule does not require independent auditor assurance on XBRL submissions. An auditor is also not expected to read the XBRL exhibit to assess if there are inconsistencies with the audited financial statements as with Management Discussion and Analysis (MD&A). The SEC’s belief and expectation is that each preparer is in the best position to determine the appropriate manner to assess the accuracy of the XBRL documents. The SEC also expects that software providers and other third parties will help develop procedures and tools to help in that regard. Because the independent auditor is familiar with the financial statements of the company, companies might benefit by engaging their independent auditor to provide assistance to management in assessing whether: • Taxonomy tags or extensions selected are appropriate • The XBRL rendering reflects the related official filing • XBRL documents comply with other aspects of XBRL (e.g., proper use of contexts and calculations) The independent auditor can be engaged to provide permissible advisory services, or agreed upon procedures, in order to increase the company’s confidence level in its XBRL exhibit.

Submit XBRL documents It is now time to submit the XBRL documents to the SEC’s EDGAR system. Once the XBRL is submitted into the SEC’s EDGAR system, it must be made available on the company’s public website on the same day as the official filing. It is important to note that the SEC EDGAR system may automatically suspend the XBRL exhibit due to non-compliance with SEC requirements. Suspension of submissions can have an adverse effect on the timeliness of submissions, causing delays and requiring changes to the XBRL documents. Awareness of the validation status of a company’s XBRL prior to submission is important because the SEC system may accept the filing but suspend the XBRL exhibit and a company would have to file an amendment to the filing to resubmit the XBRL exhibit. It is recommended that companies using third-party outsource providers, such as EDGAR filers, obtain a commitment from the filer that they follow all the SEC rules and EDGAR Manual requirements and preferences. Short- and long-term implications Now that the XBRL documents have been successfully submitted, appropriate people in the organization should review all aspects of the XBRL implementation process with a focus on improving its efficiency and effectiveness. With the process for the first year of SEC compliance complete, a strategy for the second year of compliance can be developed. This process should build on the existing creation outputs and experiences gained, while considering the effects of detail tagging of the footnotes and

schedules and evaluating the feasibility of a long-term plan for integrating the creation of the XBRL into the financial reporting process. New, more integrated software applications are starting to be developed, which will allow XBRL to work more effectively with existing accounting and reporting systems. Instead of a bolt-on approach, this software will feature an integrated or automated approach, in which XBRL can be exported directly from the ERP or financial reporting systems. The integrated creation approach has been slower to market than the current largely manual bolt-on approach. For many companies, however, an integrated, or automated, process will likely replace the stand-alone creation process when existing accounting and reporting systems are XBRL-enabled. These integrated systems will provide taxonomy-tagging functionality and XBRL instance document creation output. While XBRL may evolve to be utilized for internal reporting, currently there appears to be very little interest in replacing existing systems with an XBRL-enabled internal reporting system. XBRL GL is another future prospect, but one that needs to mature in order to gain wider acceptance among software vendors.

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Focus on quality

Desired outcomes:
• Creation of a valid XBRL instance document and taxonomy extensions • Development of validation and review reports that consider accuracy and consistency • Independent auditor involvement is determined, if any • XBRL documents submitted to the SEC and posted on the company’s website • Assessment made of overall experience, including any open issues or challenges experienced • Year-two strategy developed • Long-term approach strategy considered (i.e., bolt-on vs. integrated approach)

Meeting the SEC submission requirements alone will not necessarily result in high-quality XBRL documents. Preparers should strive for the highest quality submission for analysts, regulators and consumers to realize overall benefits of XBRL. Therefore, companies need not only to understand the technical requirements, but also put sufficient diligence into the selection of appropriate tags and verify that all details present in the existing filings are properly captured in the XBRL submissions. Quality considerations include:
• Selecting the most appropriate XBRL tags • Carefully assessing the implications of internally preparing XBRL files versus having the work performed by a third party (e.g., EDGAR filing agency) • Utilizing an investor-friendly platform for presenting XBRL files on the organization’s public website The US GAAP taxonomy for XBRL is relatively large. As a result, it is fairly complex and requires the use of judgment. Unless tagging is correctly and consistently applied, the promised benefits of improved analysis will not be generated. Companies creating XBRL need to fully understand the taxonomies and how best to align them with their financial information. In addition, the underlying XBRL code must meet quality standards and be consistent with other submissions to increase comparability. Quality considerations extend beyond just selecting the optimal tags. The SEC EDGAR Manual includes over 200 requirements for XBRL submissions such as representing how each individually tagged value relates or calculates to its parent. These calculations must be accurate and without error. When reviewing the XBRL-formatted financial statements, companies should keep the following in mind: • The taxonomy tags, and any extensions selected, are appropriate • The XBRL rendering reflects the related official filing • The XBRL documents comply with other aspects that cannot be assessed solely by viewing a rendering (e.g., XBRL technical validation, whether contexts and calculations are used appropriately) Finally, the experience of financial statement users accessing and utilizing the XBRL files on the company’s website should be thoughtfully addressed.

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Conclusion

We hope this document has provided you with insights to XBRL, including some of the key activities associated with implementing XBRL for financial reporting. While there are a number of issues and considerations, we believe the following are the key aspects that will drive the quality of XBRL-formatted financial statements:
• Invest the time needed to understand the specific SEC requirements and timing concerning XBRL and what it means to your organization; for areas not addressed by the SEC rule and EDGAR Manual, utilize the guidelines in the XBRL US Preparers’ Guide. • Identify a point-person, or coordinator, to coordinate the XBRL implementation efforts in your organization, focusing on education, awareness and communication with key stakeholders. • Develop an initial high-level plan outlining your approach (i.e., internal creation vs. outsourced services), as well as the specific issues and considerations for your organization; if you are using an outsourced creation model, be aware of the mapping, creation and review process steps and understand the deliverables. • Consider involving a third-party vendor and/or your external auditor for assistance in developing your overall XBRL implementation approach and in reviewing your XBRL documents. • Invest the time needed to fully understand the various XBRL taxonomies and carefully select the most appropriate tags for your organization; do not base tagging decisions solely on their location in the taxonomy. • Develop appropriate XBRL validation process controls around accuracy and consistency. • Provide feedback to XBRL US in the form of extension tags to be considered for future taxonomy updates. • Look beyond year-one requirements and develop a plan for XBRL for year-two and beyond.

Implementing XBRL | Developing a roadmap for the SEC mandate

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