The IFRS Taxonomy. Today and tomorrow. International Financial Reporting Standards. Il Seminario Central de Balances y XBRL - 22 June 2011

Transcription

1 International Financial Reporting Standards The IFRS Taxonomy Today and tomorrow Il Seminario Central de Balances y XBRL - 22 June 2011 Olivier Servais Director, XBRL Activities The views expressed in this presentation are those of the presenter, not necessarily those of the IASB or IFRS Foundation.

2 Agenda 2 XBRL in a nutshell XBRL for balance sheet data office and company registers The IFRS XBRL initiative IFRS Taxonomy common-practice concepts Challenges and opportunities

3 International Financial Reporting Standards XBRL in a nutshell The views expressed in this presentation are those of the presenter, not necessarily those of the IASB or IFRS Foundation

4 What is XBRL? 4 extensible Business Reporting Language Digital language used to transmit information via the Internet Provides a common, electronic format for business (financial) reporting Changes the format (not the content) of information: - Intelligent and interactive data; not simply static text/numbers - Data can automatically be recognised, processed, stored, exchanged and analysed by computers 2011 IFRS Foundation. 30 Cannon Street London EC4M 6XH UK.

5 5 taxonomy concept value context unit report

6 6?

7 International Financial Reporting Standards XBRL for balance sheet data office and company registers The views expressed in this presentation are those of the presenter, not necessarily those of the IASB or IFRS Foundation

8 XBRL for company registers 8 Largest collectors of companies data = company registers and CBSOs Objective: simplify/streamline the communication of financial statements from the issuers to regulators Steps in creating an XBRL filing: 1. Map concepts from financial statements with taxonomy items 2. Create an XBRL file 3. Validate the file; check against filing rules and for consistency 4. Rendering the file in a human readable format (optional) Established/in-development XBRL projects for company registers/cbsos (whatever the GAAP) in Australia, Belgium, Ireland, the Netherlands, Singapore, UK, and others Both companies and regulators benefit 2011 IFRS Foundation. 30 Cannon Street London EC4M 6XH UK.

9 Companies filing in Belgium PDF Accounting XBRL Instance document Upload XBRL files Validator Database

10 Reform in Filing of Financial Statements Going XBRL 9

11 Benefits of Going XBRL Streamline existing inefficiencies in the entire spectrum of financial information supply chain Enable information resellers who serve the business community more time to focus on higher value added activities Ability to provide users with value added financial data in an almost instantaneous and interactive manner Facilitate ACRA s regulatory work Examples: use of XBRL for surveillance of companies compliance to accounting standards and monitoring of delinquent public accountantsquotefromsurveillance surveillance officerinin ACRA: XBRL s XBRL abilityhas toenabled present the standardised extraction and information comparison instantaneously of relevant information, which has has reduced the data extraction time which was previously inhibitive greatly enhanced our surveillance capabilities 17

12 International Financial Reporting Standards The IFRS XBRL initiative The views expressed in this presentation are those of the presenter, not necessarily those of the IASB or IFRS Foundation

13 IASB, IFRS and XBRL governance 13 Monitoring Board (IOSCO, US SEC, EC, JFSA) The IFRS Foundation appoints Trustees of the IFRS Foundation XBRL Advisory Council (strategic) XBRL Quality Review Team (technical) consults advises oversee, review effectiveness, appoint and finance XBRL Team creates consults advises informs IASB creates Edu Com reviews IFRSs in XBRL IFRSs / IFRS (IFRS Taxonomy) for SMEs

14 Amended mission statement 14 IFRS Foundation Trustees Strategy Review consultation document (April 2011): The IFRS Foundation is already actively engaged in the development of an IFRS XBRL taxonomy. Until now, the XBRL taxonomy process has occurred after the development elopment of standards by the IASB...There is no formal link between the technical aspect of standard-setting and its potential impact on XBRL-driven data. The Trustees believe that in the future, as XBRL requirements become the norm, the standardsetting process and the XBRL taxonomy development should be integrated. This would mean that the IASB technical staff would have specialists in the development of XBRL taxonomies. The IASB would consider the impact of its decisions on how the standards are represented in the XBRL taxonomy and, hence, their usability for end users of financial data with access to XBRL data. the Trustees are committed to providing an IFRS XBRL taxonomy that serves investors and other users of financial information. In this light, the XBRL team should develop an agreed methodology to develop a relevant number of extensions to the existing base taxonomy in order to reflect common IFRS practice IFRS Foundation. 30 Cannon Street London EC4M 6XH UK.

15 What we provide 15 A licence-free IFRS Taxonomy that is: Consistent with the IFRSs, including the IFRSs for SMEs Developed according to an extensive and widely-approved due process that includes participation by IFRS Foundation-appointed external experts (XQRT) and public review Delivered once a year according to a timeframe consistent with IFRS Bound Volume publication Available in multiple languages* Updated with add-ons for new IFRSs issued by IASB (interim releases) Compliant with the Interoperable Taxonomy Architecture (ITA) project jointly developed by IFRS Foundation, the Japan FSA and the US SEC * Check on for annual version

16 IFRS Taxonomy content model 16 Sources IFRS Taxonomy Company concepts Local/regulatory concepts Common practice concepts Guidance and example concepts Core disclosure requirements concepts

17 What to disclose? The financial statements shall disclose (...) for (...) property, plant and equipment: a) the gross carrying amount and the accumulated depreciation (aggregated with accumulated impairment losses) at the beginning and end of the period; and b) a reconciliation of the carrying amount at the beginning and end of the period showing: i. additions; ii. assets classified as held for sale or included in a disposal group classified as held for sale in accordance with IFRS 5 and other disposals; iii. acquisitions iti through h business combinations; iv. increases or decreases resulting from revaluations under paragraphs 31, 39 and 40 and from impairment losses recognised or reversed in other comprehensive income in accordance with IAS 36; v. impairment losses recognised in profit or loss in accordance with IAS 36; vi. impairment losses reversed in profit or loss in accordance with IAS 36; vii IFRS Foundation. 30 Cannon Street London EC4M 6XH UK.

18 xifrs 18

19 IFRS Taxonomy Illustrated 19

20 IFRS Taxonomy: annual development time line 20 End of annual taxonomy development cycle Taxonomy development* XBRL Quality Review Team review Further taxonomy development Exposure draft IFRS Taxonomy IFRS Bound Volume Final IFRS Taxonomy New / improved IFRSs IFRS Taxonomy interim releases NOVEMBER DECEMBER JANUARY FEBRUARY MARCH APRIL MAY to OCTOBER *including consolidation of IFRS Taxonomy interim releases

21 Current projects IFRS Foundation. 30 Cannon Street London EC4M 6XH UK.

22 Some facts 22 Time indicated by FPIs to prepare 20-F with IFRS taxonomy On XBRL and IFRS taxonomy education Between 2 and 40 hours Stage 1 Mapping concepts Between 6 and 60 hours Stage 2 Creating XBRL file About 10 hours Stage 3 Filing validation according to EFM About 10 hours Stage 4 Rendering (optional) Not indicated In total Between 8 and 100 hours (*) In the US, 94% of companies have spent less than $25,000 (34% less than $10,000) Approaches Outsourcing Bolting onto an existing process Acquiring and running an integrated in-house solution Level of extensions could be significant, depending on the industry Quality : 18,695 mistakes in about 3,400 filings (1.6 million tagged facts) More details on (*) The US SEC is indicating an average of about 70 hours

23 Other projects around the world 23

24 International Financial Reporting Standards IFRS Taxonomy common-practice concepts The views expressed in this presentation are those of the presenter, not necessarily those of the IASB or IFRS Foundation

25 The IFRS Taxonomy, core of the reporting framework 25 XBRL tax xonomy Company XYZ GE 1 GE 2 GE C&I, FI, insurance, oil & gas, software Securities regulation, banking supervision, tax computation FIN NREP FI Sup IFRS SecReg UK Insur Tax Europe, LatAm, countries IFRS, US GAAP, CAS taxonomy Basel, Solvency Entity block tagging of the footnotes Industry Regulatory Regional, Jurisdictional, National Global 2011 IFRS Foundation. 30 Cannon Street London EC4M 6XH UK.

26 IFRS Taxonomy 2011 interim release: common-practice concepts 26 IFRS Taxonomy designed to be consistent with IFRSs; contains only concepts for IFRS disclosure requirements Challenge: preparation of IFRS financial statements requires additional concepts > proliferation of customised concepts by different entities / jurisdictions > incomparability of financial information Solution: enhance the usability of the IFRS Taxonomy > expand the content of the IFRS Taxonomy to include concepts that reflect common reporting practice in IFRS financial statements > reduced entity / jurisdiction-specific concepts Process: Work with IFRS filers (voluntary initiatives) Conduct empirical analysis (examining approx. 200 IFRS financial statements) Understanding what is being reported > identifying gaps in taxonomy coverage 298 common-practice concepts identified for primary financial statements and block-tagged notes/accounting policies Exposure draft IFRS Taxonomy interim published 2 June; open for comment until 2 August 2011; files available from

27 Extension rates by country 27 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 2011 IFRS Foundation. 30 Cannon Street London EC4M 6XH UK.

28 Extension rates by sector 28 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Food & Beverage Manufacturing Mining Real estate and traders Retail Trade Services Transport, Communication, Electric, Gas & Sanitary Wholesale Trade 2011 IFRS Foundation. 30 Cannon Street London EC4M 6XH UK.

29 Extension rates by statements 29 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2011 IFRS Foundation. 30 Cannon Street London EC4M 6XH UK.

30 Common practice development 30 Detailed tagging g Analysis Financial Institutions initiative Public review & release Detailed tagging initiative iti Level 1 & 2 tagging Analysis Financial Institutions initiative Public review & release Exposure draft open for comment until 2 August Level 1 tagging initiative Q Q3 Q4 Q1 Q2 Q3 Q Q IFRS Foundation. 30 Cannon Street London EC4M 6XH UK.

31 International Financial Reporting Standards Challenges and opportunities The views expressed in this presentation are those of the presenter, not necessarily those of the IASB or IFRS Foundation

32 Challenges and Opportunities 32 Broader scope for the IFRS Taxonomy Taxonomy items to reflect common-practice and industry-specific specific needs Non-financial reporting items, ie management commentary, sustainability in the context t of integrated t reporting Audit and assurance of XBRL filings, with the IFRS Taxonomy as core component A continuous taxonomy (permanent update) consistent with the IFRSs Further integration of XBRL into the IASB standard setting process

33 The Integrated Reporting framework with XBRL 33 Integrated Reporting Non-Financial Reporting Financial Reporting (IFRS, US GAAP, MIX ) Management Reporting (MD&A, management commentary, governance) Sustainability Reporting (environment, nature, CO2, climate, energy, Emission Trading Schemes) Social Reporting (human rights, labour practices) Other nonfinancial reporting Standards: UN, OECD, ISO, A4S, GRI, CDP, EBRC XBRL taxonomies IFRS CAS US GAAP GRI CDP * This slide is provided for general consideration only and should not reflect any commitment of the IASB or the IFRS Foundation

34 Links IASB XBRL activities IFRS Taxonomy Illustrated and xifrs Annual report National Bank of Belgium ACRA / and ti i tl / Mastercard SEC filings HTML form (example Mastercard 10-Q - Interactive Data aka XBRL files (second table for Mastercard Visualised XBRL filing for Mastercard com/phoenix zhtml?c=148835&p=irol-sec Compare Filings Taxonomies Quality of instances

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