XBRL FAQ: I Am a Regulator. Why Should I Care About XBRL GL?
| Q I am a regulator. Why should I care about XBRL GL? |
A XBRL GL is designed to represent detailed, transaction-oriented data. When this type of information is relevant for a regulator, XBRL GL should be considered. Examples of this requirement are typically found in Standard Business Reporting (SBR) programs, which generally include reporting on tax and payroll information, retirement plans and other forms of granular data.In these situations, alternatives to using XBRL GL that are sometimes considered include:
Even when transactional data is not directly in scope for a regulator, educating the regulated community about XBRL GL and promoting awareness on its benefits is a key part of the strategy to ensure the success of the XBRL initiative:
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My sessions at the Abu Dhabi XBRL International Conference – XBRL24
These are the sessions that I will present at the Abu Dhabi Conference. If you are around please stop by!
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XBRL FAQ: Approaches to XBRL implementation
| QWhat are the differences between the three possible approaches to XBRL implementation – bolt-on, built-in, and deeply embedded? |
| ABolt-on: Reports subject to the mandate are converted to XBRL after they have been generated in a traditional format, such as Microsoft Excel or Word. The conversion can be outsourced or performed internally using an XBRL mapping and instance creation application. Because the process of generating the report does not change, there are no benefits to this approach for the “data producer” (the business) other than achieving compliance with the mandate. In fact the conversion to XBRL becomes an additional step in a process that was already in place, creating extra work and costs without bringing any internal benefit from the adoption of XBRL.Built-in at reporting application level: This approach requires that the reporting applications support mapping to XBRL reporting taxonomies. XBRL is embedded in the reporting process, enabling significant process benefits in the aggregation of data, the review chain, the assembly of the final reports, and more. If the consolidating/reporting application does not support XBRL, or if there is no such application in use, it is still possible to achieve the benefits of the built-in approach, albeit in a different way. XBRL Global Ledger (XBRL GL) can be used to standardize trial balance accounts and amounts—as well as the way in which they are aggregated into one or more end reporting “views”—corresponding to XBRL taxonomies. This can be done using inexpensive mapping software and open source components. By interposing a layer of standardization between the software applications in use within the corporate information system and the internal/external reporting layer, it helps achieve the same results as a reporting application that supports mapping to XBRL taxonomies. This variation also enables an easy, gradual transition towards the deeply embedded approach, which maximizes the benefits of XBRL for businesses and organizations.
Deeply embedded: This approach uses the XBRL GL taxonomy to provide a standardized, consistent view of the detailed information used to create the summarized reports represented with XBRL taxonomies for internal and external reporting—no matter what system that detailed information was generated from or resides in. This enables process changes that go well beyond the generation of regulatory filings to address key issues common to every corporate environment, subject to an XBRL mandate or not: efficient systems integration; a seamless audit trail; consistent application of standardized validation rules, business rules, and controls across disparate data stores; and more. Compliance requirements, if present, are achieved as a byproduct of an XBRL-enabled internal process. |
XBRL FAQ: Hybrid XBRL taxonomy architectures
| Q What is a hybrid XBRL taxonomy architecture, and when should it be considered? |
A A XBRL taxonomy architecture is called “hybrid” when it includes two conceptually distinct areas: one supports the representation of summarized, aggregated data (usually for end reporting, internal or external) and the other supports the representation of detailed, granular and transaction-oriented data (typically internal data). Frequently, but not necessarily, the detailed data is the underlying detail that rolls up to all or part of the summarized data represented by the taxonomy. Typically the detailed data portion is represented using XBRL Global Ledger (XBRL GL) or if not with a custom-developed taxonomy that aligns to the XBRL GL architecture profile. The hybrid XBRL taxonomy imports or references either XBRL GL or the custom-developed detail-oriented taxonomy.A hybrid taxonomy architecture should be considered when the representation of detailed/granular information is part of the requirements of the XBRL project in which the taxonomy will be used. Summarized and detailed information have different features, which require different technical solutions in the taxonomy architecture to be efficiently represented:
As always, nearly any technology can be used to reach any result, so it is technically possible to use dimensional taxonomies for detailed information and tuple-based architectures to represent summarized reports. This will, in general, stretch the taxonomy architecture by adapting features that are not optimized for each specific purpose, resulting in a taxonomy architecture that is more complex and harder to maintain and to use, especially for business users. |
XBRL FAQ: Impact of Filing Channels on XBRL Programs
Q Are there specific considerations that a regulator should keep in mind when planning for the filing channel(s) that will be used to send and receive XBRL reports?
A One of the primary concerns of regulators when embarking in a XBRL filing program is to minimize its impact on filers. This is a legitimate concern, and it is interesting how it sometimes determines decisions that are inconsistent and even contradictory with the declared objective. A recurring example is the deployment of filing channels that are meant to “make things easy” for filers, but in fact create overhead without compensating it with the benefits that XBRL brings in terms of costs reduction and greater efficiencies in reporting processes. These are the filing channels that typically encourage, or even force, the use of a “bolt-on” approach when creating XBRL reports.
The best example is the use of Web forms or spreadsheet-based templates, where filers load their information and the conversion to XBRL happens behind the scenes. The main argument in support of this approach is that it “hides the complexity” of XBRL from users. In reality, it hides the benefits of XBRL.
If filers are asked to type or load numbers in a form the primary consequence is not that this makes the creation of XBRL instances seamless, it is that XBRL brings no benefit at all to the processes that they use to create those reports. This may seem beneficial in the short term, but is in fact a lost opportunity, and it translates into considering the XBRL program as overhead, creating pushback. Even when the forms were already in place before the XBRL initiative, and therefore the process is already familiar, this approach is counter-productive – XBRL delivers on its value proposition only if all the parties involved in the business reporting supply chain benefit from it, and that must include also the producers of reports, not only the consumers of reports.
For this to happen, web portals and template based submission needs to be accompanied by the possibility to just file the XBRL report, in whatever way it was created. Information and awareness programs on the various existing approaches to the creation of XBRL reports – bolt-on, built-in, deeply embedded – and on the internal benefits of XBRL targeted on filers and accounting software developers should also be promoted by the regulator to encourage educated choices. The benefits of this approach will not only create buy-in into the XBRL initiative – they will also create the conditions for a significant long term benefit for the regulated community that goes well beyond the scope of the initiative itself.
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