IPHIX Turns Page
The IPHIX web site is down today… no, not because of SOPA, even though indeed we don’t agree with its current formulation. Oh and by the way talking about SOPA this article called my attention as a very objective and balanced comment on the “Wikipedia Blackout” that occurred yesterday. Yes, it was a great thing. No, I hope it will never happen again, not even for a worthy cause like in this case. Because there is a tangible risk that people enthusiastically buy into any form of “crowdsourced protest” just because it is the new cool thing, and that only a small percentage of them really takes the time to look into the reasons, understand the issues and form their own opinion. Anyway, I digress.
The IPHIX web site is down today because a brand new website will take its place. An exciting brand new image, a lot of new content, and a renewed focus on what we think matters the most in the XBRL world: enabling businesses large and small to leverage data standardization internally, and to achieve costs savings and internal process efficiencies that would otherwise require a significant investment in new software and in the time and resources necessary to deploy it.
All the thinking done and the experience gained in many years of leadership in the internal use of XBRL within businesses and NFP organizations is now coming together under new offerings of tools and services designed to support deeply embedded XBRL. implementations, which will complement (and leverage) our extensive experience in helping governments and regulators worldwide design and deploy their XBRL based programs.
It is an exciting moment for us, and we can’t wait to share the news with our clients and those who follow us and support our vision of total data transparency and accessibility within the enterprise through standardization. So please stay tuned, and follow us on Twitter and LinkedIn for the latest updates – the Hello World moment will happen sometimes between now and the end of the upcoming weekend.
Read MoreOne Step Towards Deeply Embedded XBRL
I came across this post in the SAP Community Network Blogs. It is about a proof of concept on using SAP software – ERP Central Component (ECC) – to generate XBRL reports, and in particular SEC filings in the example, by mapping journal entries to the SEC US-GAAP taxonomy, as opposed to mapping the financial statements to the SEC US-GAAP taxonomy after they have been finalized.
I want to point out in particular the conclusions from the post:
“We have gone from a GL journal entry to the published financial statements using the minimum steps required and leveraging the existing SAP production installations. This virtual financial reporting value chain takes a lot of manpower and even more hours to accomplish today, but this example shows a clear opportunity to streamline and make it a more efficient process thus creating added value for all.”
Of course, this proof of concept is not really about using deeply embedded XBRL, since it is based on a proprietary software and XBRL is only the final output. It is, though, about applying the idea behind deeply embedded XBRL – standardize and optimize the process of creation/assembly of end reports from the underlying detailed data rather than just standardizing the resulting end reports, because it is the process and the inefficiencies related to it that cost money to businesses, not the report in itself.
Once the concept outlined in the conclusions quoted above is understood and accepted, moving towards a real deeply embedded XBRL implementation, and more broadly towards leveraging the real value of XBRL internally to the enterprise, is easy:
- Use XBRL Global Ledger (XBRL GL) to standardize the underlying detailed data (journal entries or trial balance in this case, but you can go deeper down to even more granular data as needed) and the mappings to end reporting XBRL taxonomies (such as the US-GAAP taxonomy, or the IFRS taxonomy) as opposed to using the proprietary format of SAP or any other accounting software/ERP application. This makes it possible to integrate data from any data repository in use within he corporate information system and to avoid being bound to one specific application. It also makes it easy to broaden the scope of the internal use of XBRL to other processes that relate to data aggregation, reporting, auditing and monitoring.
- The step described in point 1 already goes a long, long way towards achieving the benefits of XBRL within a business. It is however possible to go one step further, by interposing a standard chart of accounts (SCOA) between the corporate chart of accounts and the end XBRL reporting layer. If the mappings to the XBRL taxonomy of interest are created with a SCOA as the starting point, they become reusable by any business just by mapping the corporate COA to the SCOA – an account-to-account mapping that is way easier than an account-to-XBRL-reporting-concept mapping. This means that a community of users can create and share these mappings in a standardized, reusable format, minimizing - actually I believe that the current buzzword is “crowdsourcing” – the cost and the effort related to deploying XBRL internally.
That community already exists, it is called WikiAccounts – check it out here.
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Foreword to “XBRL Global Ledger Distilled”
As mentioned here the book “XBRL Global Ledger Distilled” has been recently published in China. Below is the foreword that the author, Jia XinQuan, kindly asked me to write.
The Extensible Business Reporting Language (XBRL) is rapidly becoming the global standard for the representation of business and financial data. The vast majority of its visible implementations to date relate to regulatory reporting, and there is a common misconception that this is the only process that XBRL is designed to support.
In reality XBRL is a Business Reporting Supply Chain (BRSC) standardization effort, and as such it encompasses both internal and external reporting processes. It is designed for the end-to-end standardization and integration of data: from the first entry in accounting software, through the various levels of summarization for internal reporting purposes, to its final roll-up in multiple end reports for internal and external use, including, but not limited to, compliance reporting. The use of XBRL to standardize internal information, to streamline the internal processes that aggregate and analyze it and to standardize the rules of aggregation between granular internal data and internal and external end reports is the space of XBRL Global Ledger (XBRL GL).
One of the analogies most frequently used to describe the power of XBRL is the barcode, which revolutionized the distribution supply chain by enabling greater efficiencies and extremely significant cost savings, mostly related to the automation of previously manual activities. The barcode is a machine readable, standardized code that uniquely identifies goods and materials and describes some of their features; in the same way, XBRL allows to attach machine readable “meaning” relevant in the business and financial data domain to pieces of information, thus enabling the same kind of transition from manual to automated processes related to data aggregation, analysis and reporting.
Well, I assume that if you were in charge, say, of a specific distribution supply chain you would not apply the barcode to your merchandise only in the moment in which it is unloaded from the truck to get to the grocery store shelves – your own processes would not benefit from it at all, and the only beneficiary would be the grocery store itself. The earlier in the supply chain you start barcoding, the more significant and pervasive are the process benefits that you achieve within your own organization.
In the same way, seeing XBRL only as the format to which financial statements must be converted to comply with a regulatory mandate means ignoring the great opportunities that it enables. The earlier you tag your business and financial data in the business reporting supply chain, the more significant the benefits achieved will be. XBRL GL is the enabler of “early barcoding” within the BRSC – and the benefits seen so far from XBRL adoption in the external compliance space are only the tip of the iceberg. The real value and the most significant process efficiencies lie in the internal use of XBRL, including, but in no way limited to, the generation of XBRL reports in a standardized, more efficient way.
China has taken a lead position in global XBRL adoption since the release in October 2010 of the Chinese Accounting Standards XBRL taxonomy promoted by the Ministry of Finance, and the level of interest in expanding its use for internal purposes is very high – as is very high the potential for breakthrough advances in the application of this technology.
The publication of XBRL GL Distilled is a milestone on the way towards the complete realization of the benefits of data standardization in business reporting and towards the full adoption of the “business data barcode” in one of the most influential economies in the world – which has the capability of setting best practices that will greatly benefit the global community as a whole.
Gianluca Garbellotto
Chair, XBRL Global Ledger Working Group
XBRL Global Ledger Just Got More Global
The book XBRL GL Distilled, authored by Jia XinQuan, was recently published in China by Economic Science Press, a further confirmation of the growing global interest around what is widely considered as the necessary next step in XBRL adoption.
- XBRL GL Distilled cover
A great additional offspring from this work is the set of Chinese XBRL GL labels, which soon will be added to the existing English and Japanese labels. Many thanks to Jia XinQuan and the Chinese XBRL Jurisdiction for this great contribution.
Italian and Spanish labels are also in the pipeline. How Global is that?
Read MoreLeveraging XBRL for Value in Organizations
ISACA and the International Federation of Accountants (IFAC)’s Professional Accountants in Business (PAIB) Committee have jointly developed a paper, Leveraging XBRL for Value in Organizations, to provide guidance on how to leverage the value of XBRL through effective implementation – and I had the privilege of being asked to contribute with a review.
The paper can be downloaded free of charge from the ISACA and IFAC web sites.
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