Digital Financial Reporting

This link is to a high level model of XBRL.  The model was put together using the XBRL Specification and ideas from other models which I have seen.  I guess that this is more a physical model than a logical model.  I am no expert in creating models but I needed one and all the other models which I have come across were significantly lacking.  This model is certainly not a complete logical model which would need to go into significantly more detail, however it does contain a few logical notions within it such as the idea of networks, concepts, facts, and rules.

 High Level Model of XBRL

I think there are a number of different graphical models which are needed for XBRL.  A detailed physical model, a detailed logical model, etc.  If anyone is aware of these sorts of models, if you could make me aware of them that would be spectacular. Or, if anyone is aware of a better high level model than this one, please provide comments and I can either update this model or point to that better model.

Comments would be greatly appreciated.  This model is free for anyone to modify/improve, it is made available under a Creative Commons license.  I hope to create a graphical image of a logical model of the XBRLS application profile.

Someone pointed out to me that you can order XBRL for Dummies from Amazon.com for $19.79 currently.  The normal price is $29.99.  Also, it appears that the book will ship October 22, 2009.  Not sure why Amazon.com dropped the price.

The first XBRL US Pacific Rim Technology Workshop and Summitwill be held July 28 to 30 in Santa Clara, California.  The event is designed to bring together XML and XBRL experts from around the world to brainstorm, generate ideas and educate each other on advanced topics.  Per the conference web page above, this includes: 

• Real-world case studies that describe taxonomy development and maintenance processes including US GAAP, IFRS and corporate actions from around the world, e.g., US, China, Europe, Japan
• Advanced topics in development including tagging, rendering, versioning, data quality and validation, database and business intelligence
• Practical taxonomy maintenance workshop
• Speakers with XBRL expertise from organizations such as Hitachi, Fujitsu, CoreFiling, Rivet Software, Just Systems, UBmatrix, Ernst & Young, The Depository Trust & Clearing Corporation (DTCC), SWIFT, and Morningstar, among others

In a story posted to the Netherlands SBR project web site, an announcement was made that three major banks in the Netherlands are going to use Standard Business Reporting for the granting of credit.  The implementations should be completed by the end of 2009, automating the delivery of credit reports via computerized information exchange processes.

Standard Business Reporting (I have also heard Standardized Business Reporting) is the term I believe the Australian Taxonomy Project coined which was then adopted by what was the Dutch Taxonomy Project which is not being referred to as the Dutch SBR project.

This is interesting to me for two reasons.  The first reason is that in the United States a bank was experimenting with accepting information from businesses either seeking credit or having credit and having to provide periodic reports to the financial institution using XBRL.  Not sure what happened to that project.  I would suspect that banks will be all over XBRL for receiving this periodic financial information in support of their credit.  It cannot be much fun for banks to key this information in each month in order to track their credit.

The second interesting thing is the term Standard Business Reporting.  That term was used, and not XBRL, in the link above.  Australia, the Netherlands, New Zealand and others have Standard Business Reporting.  The US Securities and Exchange Commission has their term for XBRL which is "interactive data".  Perhaps this is the beginning of the trend most people would like to see which is for XBRL to disappear into the background, never really to be seen...just doing its job enabling these sorts of information exchanges.

A study (A Comparison of XBRL Filings to Corporate 10-Ks - Evidence from the Voluntary Filing Program) finds what they call serious errors in XBRL filings to the SEC Voluntary Filing Program (VFP).

Here is the abstract of the research paper:

The SEC has mandated a phase-in of XBRL filings beginning June 2009 for accelerated filers. Although companies have limited legal liability for initial filings, registrants may suffer reputational and other risks should the filings include errors. To assess the likelihood of material errors, we evaluate the accuracy of XBRL filings for 22 companies participating in the SEC.s voluntary filing program in 2006. Results of a comparison of XBRL filings to Forms 10-K reveal multiple errors in signage, amounts, labeling, and classification. These errors are serious because since XBRL data is computer-readable, users will not visually recognize the errors, especially when using XBRL analysis software. Although XBRL software and taxonomy have improved since 2006, the potential for some errors remains. The SEC, registrants, and accountants need to take note of the complexities of XBRL tagging and identify solutions (e.g., assurance, training) to ensure successful adoption.

 The general types of error discovered and reported in this study includes:

• Missing elements and amounts
• Incorrect amounts
• Sign flips (i.e. reported as a positive when it should be a negative value as an example)
• Duplication of items
• Incorrect classifications
• Incorrect tagging (labeling)

The VFP did not really do a lot in the way of validating submissions.  Nor did the SEC seem to crack down on people whose submissions contained errors.  This probably will not be the case for the real filing companies make to the SEC.  I would suspect that significantly more robust processes will be wrapped around "real" submissions.

Further, the AICPA has issued a statement of position (SOP 09-1) titled Performing Agreed-Upon Procedures Engagements That Address the Completeness, Accuracy, or Consistency of XBRL-Tagged Data.  This guidance did not exist during the time that these VFP filings were made.  It does now.  This will contribute to improving the quality of the filings, at least if CPAs are involved in the process as they need to follow this guidance.  While the SOP does not tell you how to create a good XBRL instance, it does help to define "good" by pointing out the things which are not good.

Anyone responsible for creating XBRL instances, whether for SEC filings or any other types of XBRL instances, would benefit from reading this paper.  It helps you understand the types of things to look for when reviewing an XBRL instance of any type.