|
![3D"http://media.journalofaccountancy.com/JOA/Issues/2004/05/blue_x.=](3D"XBRL_files/image004.gif") BRL—a specialized form of XML (extensible markup
language)—is becoming more familiar to creators and users of elec=
tronic
financial statements, but few people have actual hands-on experience wi=
th
it. So, to bring XBRL to a wider business audience, Microsoft Corp. has
released the Microsoft Office Tool for XBRL—a free, but important,
enhancement—for the 2003 versions of Excel and Word. <=
/span>
=
Along with the AICPA and more than 200 o=
ther
organizations, Microsoft is a member of XBRL International Inc. ( www.xbrl.org ), a no=
nprofit
group that promotes use of the extensible business reporting language to
improve financial reporting.
=
This article explains how to obtain, ins=
tall
and use the tool to create an XBRL-compliant Microsoft Office file. It =
also
explains what XBRL is and why it’s important to CPAs, their clien=
ts
and employers (see “ XBRL: A Business Reporting Standard ” and &=
#8220;
Why
XBRL Matters ”).
|
XBRL : A Business
Reporting Standard
To appreciate =
the
tool’s usefulness, it’s important to have some understand=
ing
of XBRL, which is the XML-based standard for identifying—and
improving the accuracy and electronic communication of—complex
financial information. XBRL is a computer programming add-on that tags
each segment of business information with an identification code or
marker.
XBRL International Inc., a nonprofit
global consortium of more than 200 companies,
associations—including the AICPA—and government agencies,=
has
developed XBRL as a royalty-free, open software specification ( www.xbrl.or=
g/whatisxbrl
). Version 2.1—the most current specification, or full
description, of XBRL—is available for review and comment at the
organization’s Web site, which also contains information on the
different roles XBRL can play in various business contexts.
|
=
Users can download the enhancement from =
the
Microsoft Web site ( www.microsoft.com/office/solutions/xbrl
) at no charge and easily install it. Immediately afterward, they c=
an
create or use worksheets and documents that employ XBRL to speed data
input, ensure accuracy, eliminate ambiguity by specifying the precise
nature of each data element and thus simplify the exchange of financial
information. The tool benefits not just CPAs but all participants in the
financial reporting process, including reporting entities, regulators,
financial institutions, rating agencies and individual and institutional
investors, and improves data sharing among the various
systems—financial, tax and other—they use.
=
An example of the growing support for XB=
RL
was the 10-year, $39 million contract the Federal Deposit Insurance Cor=
p.
awarded in 2003 to Unisys Corp., which, with the assistance of Pricewat=
erhouseCoopers,
Microsoft Corp., EDGAR Online Inc. and other technology companies, will=
use
XBRL and other tools to modernize and streamline federal bank
regulators’ collection, processing and distribution of banks̵=
7;
quarterly financial reports.
|
Why XBRL Matters <=
/span>
There are several reasons why CPAs—who often must follow relati=
vely
inflexible processes—could benefit from a new means of working =
with
financial data. Among these motivations are their need for greater
![3D"http://media.journalofaccountancy.com/JOA/Issues/2004/05/black=](3D"XBRL_files/image005.gif") Accuracy. Imprecise, inconsistent and unreliable
values are common results of transferring data in ambiguous formats, =
such
as those in which values are separated by commas or other characters.
Because XBRL transcends the limitations of such data formats, it
eliminates errors that occur during data re-entry and it minimizes the
risk of losing “metadata,” or verbal descriptions of
individual data elements.
Efficiency. Because XBRL data contained in one
document or system can be easily shared with another without being
rekeyed, exchanging information is swift, easy and error-free, result=
ing
in immediate productivity improvements for all involved parties. In a=
ddition,
XBRL can be used with software and data on any computer operating sys=
tem
or hardware equipment.
Transparency. =
Due to the consistency of their format=
ting
and identification, XBRL data do not vary from the time and place of
their creation to their eventual destination and use—whether it=
be
public record or another purpose. XBRL therefore can help CPAs play a
strong role in helping public companies satisfy the strict financial
reporting obligations the Sarbanes-Oxley Act of 2002 has imposed on t=
hem.
Section 409 of the act requires companies to “disclose to the
public on a rapid and current basis…information concerning mate=
rial
changes in the financial condition or operations of the issuer.”
CPAs can provide a valuable service to their clients or employers by
helping them implement XBRL-based reporting capabilities that
automatically facilitate compliance by aggregating such information f=
or
review and distribution.
|
BE A CREATOR, A
USER OR BOTH
The Microsoft Of=
fice
Tool for XBRL enables users to both create and use documents formatted =
in
XBRL. Many participants in the financial reporting process likely will
employ one of these functions more often than the other. For example,
producers of quarterly earnings reports will benefit from the tool̵=
7;s
creation functions, such as those used to characterize earnings data by
“tagging” them with a contextual format—known as a
taxonomy—that corresponds to a series of principles or definition=
s,
such as U.S. GAAP. On the other hand, analysts of existing financial
information will find it advantageous to use the tool to, for example,
compare several of a company’s earnings statements. Of course, bo=
th
capabilities are available to everyone using the tool.
=
Exhibit 1 depicts the current way—without
XBRL—electronic financial information flows from an
organization’s finance department to regulators, analysts, invest=
ors
and other interested parties. Companies first submit plain-text financi=
al
reports to the SEC. They then convert those documents’ data into
hypertext markup language (HTML) format and post them on the Web for pu=
blic
viewing. Finally, companies reconvert those data into various formats t=
hat
enable investors and financial analysts to scrutinize key performance
indicators and other criteria. This fragmented process is both
labor-intensive and error-prone.
=
But exhibit 2 shows how—with the aid of the XBRL
tool—companies can transmit their financial data accurately and
directly from their enterprise resource planning software and other sys=
tems
into XBRL-enabled worksheets that are more quickly available for review=
by
third parties.
=
In fact, with the tool automated process=
es
pull these data from various designated systems directly into Excel-bas=
ed
and Word-based document summaries, such as financial statements that us=
ers
can organize for analysis. These same documents also can be readily
exchanged between disparate data repositories, such as finance and tax
systems. It is easy to see the tool’s advantages over the current,
largely manual process of manipulating various data formats.
ALL IT TAKES I=
S A
FEW SIMPLE STEPS
After downloading
the tool and installing it on their PCs, CPAs can begin the process of
“marking up,” or converting, a document to an XBRL format t=
hat
meets the requirements of the specific information with which they want=
to
work.
=
Gain access to
required resources. To
create an XBRL “instance document”—that is, an XML fi=
le
containing financial data marked up with XBRL, or an XBRL-compliant Exc=
el
worksheet or Word document—a user of the tool must have access to=
the
following resources:
=
A Word or Excel file containing data that are intended for=
the
XBRL document.
=
An XBRL-compliant “taxonomy” for tagging the
content of a given financial report.
=
In this context, a taxonomy is a standard
description and classification system for financial data. XBRL taxonomi=
es
exist in several versions and conform to U.S. GAAP and the financial
reporting standards of other jurisdictions such as Canada. They can be
downloaded from the XBRL International Web site (
www.xbrl.org/resourcecenter ).
=
After installing the tool, when a user
launches Word or Excel, the option “XBRL” appears on the me=
nu
bar, as shown in exhibit 3 .
|
Create a conte=
xt. XBRL contexts make it possible to prov=
ide
additional information about the content being marked up. Multiple
contexts are permissible in any instance document. Each provides facts
such as a date span for the data used, their currency type and other
optional descriptive content and identifiers. This helps consumers of=
an
XBRL document compare it and merge it with other data sources.
Here’s how to create a context:
|
|
=
Click on the XBRL =
menu, and select Contexts =
, as shown in exhibit 4 .
=
This opens the Context Library =
dialog box. Click on the Add <=
span
style=3D'font-size:9.0pt;font-family:"Arial","sans-serif";mso-fareast-f=
ont-family:
"Times New Roman";color:black'>button to create a new context. That will
open the Context Editor , as shown in exhibit 5 .
=
Enter information as required in each fi=
eld
by navigating using the left-hand task pane. Be sure to name each conte=
xt
by entering text in the Identifier Value field. Then click on OK to save the context.
=
Add and attach a
taxonomy. In this step a u=
ser
can select a taxonomy provided by his or her company or one downloaded =
from
the XBRL Web site, such as the U.S. GAAP Commercial and Industrial
taxonomy. To add a taxonomy, click on Taxonomies on the XBRL =
menu. The Taxonomy Library=
dialog box opens, as shown in exhibit 6 .
=
To add a taxonomy click on the Add Taxonomies <=
/span>button, name the taxonomy, select the
appropriate file and click on OK . Once the desired taxonomies are in the Taxonomy Library,
select one and click on the OK button. Now, on the XBRL menu, select Enable Markup . This activates the XBRL Document Actio=
ns
task pane, which is on the right side of the document (see exhibit 7 ). To attach the taxonomy just added to=
the document,
click on the Attach link
at the top of the task pane.
=
Mark up the data=
. It now is possible to tag—or mark
up—the content with elements from the taxonomy. This process enab=
les metadata—that
is, descriptions of data—and context information to accompany the
content’s numeric values as long as they remain in the XBRL forma=
t.
In this example a standard SEC Form 10-Q is shown as displayed in the t=
ool.
=
The tool supports standard Excel workbook
elements, such as multiple worksheets. In this illustration, only one
element (Inventories, Net—a standard line item in financial
statements) is tagged—as indicated by the blue cell border—=
and
can be exported as an XBRL instance document. This example will show ho=
w to
tag a single data element and export it as an XBRL instance document. <=
o:p>
=
Use the cursor to highlight the cell
containing the revenue amount. Then type revenue <=
/i>in the Select element f=
or
markup text box on the =
task
pane. Then click on Find Next to
search for a specific revenue element or navigate through the elements
displayed in the hierarchy shown in the pane. From the Select a context=
for
markup drop-down menu,
select the correct context for the data in the revenue cell. Then click=
Apply Markup to tag the data in XBRL format, which is
indicated by the blue border now surrounding the cell.
=
Create the XBRL
instance document. After
the data to be marked up have been tagged, the XBRL instance document c=
an
be created. Click on Export XBRL Document (see exhibit 4 ). Enter a file name and then save the =
file.
The result is the XBRL instance document. That’s all there is to =
it.
COMPARING AND
ANALYZING DATA FROM DIFFERENT SOURCES
The tool’s
analytics component enables users to compare multiple XBRL documents
received from public or private sources. Data tagged with the same XBRL
taxonomy can be readily compared, reconciled and analyzed. Analytics
scenarios are used by financial analysts, individual investors or anyone
else who regularly compares financial data in multiple documents coveri=
ng
numerous reporting periods for an individual company or who compares si=
ngle
documents from several companies. An analytics scenario also makes it
possible to evaluate trends in multiple versions of such documents.
=
Depending on the amount of historical
financial data a user wants to analyze, he or she may find it necessary=
to
subscribe to EDGAR Online ( www.edgar-online.com ), a Web site that
offers—for a fee—access to all data public companies report=
to
the SEC.
=
To begin comparing data, open Excel and =
on
the XBRL menu, click on t=
he Analytics submenu and select New Worksheet , as shown in exhibit 8 .
=
This will open a new workbook that is
preconfigured to analyze XBRL data. Multiple worksheets are automatical=
ly
created for the various tasks available in the tool’s analytics
component (see exhibit 9 ).
=
On this screen it is possible to download
XBRL content from your computer or company network, from a Web-based so=
urce
or both. Clicking on Add Local Data opens a dialog box that makes it possible to load XBRL
documents from the user’s PC or network. Clicking on Add WS Data opens a worksheet that links to EDGAR
Online.
=
Using the WS Data <=
/b>component, it is possible to search for a
company’s name or ticker symbol or an industry and narrow the sea=
rch
by specifying a reporting period, such as quarter or year. To download =
the
data for selected companies, click on Get Data =
in the lower right corner of the screen.=
=
After downloading the data, it is possib=
le
to perform ratio analysis, build comparison tables and illustrate a
financial analysis using automated charting tools. Two screenshots prov=
ide
examples. In the first one multiple companies are compared according to=
a
single measurement criterion (see exhibit 10 ).
=
The second example shows one companyR=
17;s
financial results over multiple reporting periods (see exhibit 11 ).
LOOKING AHEAD =
XBRL promises to
revolutionize the way those involved in the financial reporting process
create, use and analyze financial information. New reporting standards
driven by market acceleration and regulatory requirements make it neces=
sary
to automate financial reporting processes.
=
The Microsoft Office Tool for XBRL enabl=
es
CPAs and other finance professionals to improve the efficiency, accuracy
and transparency of the software products they currently use.
|
Previous JofA Articles on XBRL
![3D"http://media.journalofaccountancy.com/JOA/Issues/2004/05/blueb=](3D"XBRL_files/image017.gif") “Comments Encouraged on Newly Named XBRL,” <=
/span>JofA , Jun.00, page 14 and www.aicpa=
.org/pubs/jofa/jun2000/news_sr.htm
.
“Finally, Business Talks the Same Language,”=
JofA , Aug.00, page 24 and www.aicpa.org/pubs/jofa/aug2000/zarowin.htm . <=
o:p>
“XBRL Approved for U.S. Implementation,” JofA , Oct.00, page 23 and www.aicpa.org/pubs/jofa/oct2000/news1.htm .
“A Napster for Financial Data?” JofA , Jan.03, page 66 and www.aicpa.org/pubs/jofa/jan2003/spec_zar.htm . =
|
=
JEFFREY W. NAUMANN, CPA, is a senior
technical manager at the AICPA. His e-mail address is jnaumann@aicpa.org=
.
Mr. Naumann is an employee of the AICPA, and his views, as expressed in
this article, do not necessarily reflect the views of the Institute.
Official positions are determined through certain specific committee
procedures, due process and deliberation.
|
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