There were a lot of plans and ideas that are not implemented for various reasons:

• I wanted to start a process of XBRL adoption in the local area and to convey the experience of it through the blog posts – No Understanding.
• I planned to interview more important persons from this field; also my idea was to expand the site content with the articles about Semantic Web – No Time.
• I planned to visit some important conferences and events and meet with important people in this area – No Money.

And then I decided to stop.

It’s time for me to dedicate more time and energy to my family, and to work on things that can provide us a source of livelihood.

So I’m going another way than XBRL.

Thank you all,
Ilija

1. Tell us about the current situation in Croatia regarding the adoption of XBRL and what is your opinion on the development of this process in the near future?

The situation in Croatia is not very bright at the moment. We still have no jurisdiction but we are working on it. Hope that the jurisdiction will be established in the next two to four years. Croatian admission in the EU could speed things up but we will see what the future has to offer.

2. What are the main problems that prevent the faster adoption of XBRL?

Main problems are several regulator agencies with several different reporting standards. Neither of them is based on the same system, so we have Excel, web form, XML, paper based systems and so on. Second biggest problem is lack of XBRL awareness that we are working on.

3. Successful implementation of XBRL requires synergy of multiple disciplines, but leaders must be accountants (accounting profession). Is there an awareness of the importance of XBRL among accountants in Croatia?

The awareness is very low. Aside 1 or 2 articles in accounting magazine and my XBRL columns on ORKIS.hr portal that is all.

4. Do you see influential individuals who are aware of the international trends in business reporting and who could make necessary decisions to speed up this process? What industry could be the leader in this process?

I have to mentioned here and say big Thank You to the Zagreb School Of Economics and Management for starting the lectures on XBRL topics and for choosing me as a guest lecturer on this topic. Other influential individuals are faculty professors that are familiar with the subject.

In my opinion the leader in this process in Croatia could be the IT and Telecom industry.

5. The adoption of XBRL requires huge investments and important engagement of all stakeholders. Is it possible to return money and efforts invested in short period of time?

The implementation process would be long but in my opinion ROI could be made in short period of time. The biggest benefit would be great money savings, less or no errors in processing the data, automatization, time savings and so on.

6. How do you see the impact of XBRL in general on innovative methods in financial reporting?

The impact is enormous. Once one author in one of his articles said that XBRL will change the way accountants work. He was more than right…

David, XBRL is not a new technology, but it is complex and does require significant effort to become an expert. What are your views on the whole are there enough XBRL experts question?

DB: Well, one can argue that there are not enough home-grown XBRL experts, yet. But the pool of architects and developers is growing, and that growth is accelerating in response to the fact that companies and others are now really building XBRL applications and tools.  Let’s not forget:  XBRL is simply a specialized case of XML. As such, I fully expect the very large existing community of XML experts will be the source of a rapidly growing number of people with XBRL skills. This is an exciting, dynamic area that will draw in the talent.

DB: Now, some people are more worried about experts in terms of the US GAAP mandate, that there might not be enough XBRL experts who also know accounting.  But, tagging is straight-forward enough in practice that it isn’t clear to me that financial reporting professionals have to be “expert” in XBRL generally rather than primarily in the tagging GAAP tags on GAAP line items and tables.

DB: Of course, there are third parties such as universities, standards-setters, and trade associations who can play a role play a role in improving the breadth and depth of tagging and technical skills, and hopefully they are looking at programs to develop these skills.

There is talk of a certification program. What is your view on a certification being offered by an organization that does not cater for individual membership? Would this hinder the update of such certification?

DB: I’m not sure that is an issue;  many kinds of organizational models excel at training and certification, and the market can sort that out. But I think a number of organizations understand the importance of building the pool of expertise, and I’m sure they will consider how to best solve this problem. Personally I think that some kind of certification model could be a useful thing, and certainly would make an employer’s job easier, simply finding individuals with evidence of demonstrated knowledge.

DB: With the speed of implementation of the mandate it was probably reasonable to expect a somewhat lagged pace in development of resources at the other end of the business sytem, for tools to use and transform filed XBRL content.  As the inventory of useful filings grows, at a higher level there will be more need for a wider pool of expertise in software and analytics to serve the growing number of vendors, creators and consumers of Interactive Data. Again, I emphasize the relationship between XML and XBRL which should mean that it should be relatively easy for these people to learn XBRL.
(What factors do you think have hindered the growth in the number of experts?)

DB: Well, historically in the US people have equated “XBRL” with “XBRL GAAP” simply because that was the first major and most high-profile use case. It implied that in order to learn XBRL you also needed to understand GAAP. GAAP is hard, not XBRL.  And let’s face it, there were fewer people who understood both the complexity and the need of both XBRL and GAAP.

DB: That is no longer the case, not with GAAP done and new use-cases in non-financial information coming to the fore. Accounting knowledge as a prerequisite disappears when you start looking at mutual funds, ratings, or any other types of information. We need to get the word out that GAAP is old news from an XBRL perspective.   Also, Of the several other taxonomies we’ve worked with, none are even within two orders of magnitude – not a “factor of 2”, but “2 orders of magnitude” — of the thousands of tags in the GAAP taxonomy.  I’m not sure any others we might consider will come close, either.

DB: The complexity of GAAP tagging scared people. The real issue was not XBRL for GAAP but rather the complexity of financial reporting, and the associated need to fit that complexity into the syntax behind the taxonomy, and to ensure that the standard could meet that complexity. Most other areas of business public reporting are not that complex and therefore should be simpler to model, tag, and use.  That said, I think you’ve got to recognize that GAAP XBRL tagging is working, and that “complex” is a relative thing, not an absolute.  Complexity gets tamed by experience, training and innovation, and that is already happening.

So you expect a rapid growth in the number of experts?

DB: Oh yes.  As professionals realize that XBRL is simply a step on from XML, that powerful and even novel commercial tools and platforms can be built or adapted for it, and that being a GAAP expert is not always a prerequisite, I think well see a very rapid increase in the total pool of expertise.

(*) I promised David Blaszkowsky that I would include his official disclaimer: “As a matter of policy, the Securities and Exchange Commission disclaims responsibility for the private statements of SEC employees.  The views I am expressing today are solely my own, and do not reflect the views of the Commission, the Commissioners, or of any employees other than myself.”

The Office of Interactive Disclosure (OID) carries the heavy responsibility of implementing the SEC’s Interactive Data rules for GAAP for public companies, for mutual funds and for ratings (links and names), and in the minds of many observers of XBRL’s progress around the world, holds the key to demonstrating the real value for XBRL for public financial reporting generally. That’s a significant burden. After all, more so even than the FDIC, this is the largest implementation of XBRL in which the resulting data is being made available to consumers of financial information.

One consistent theme was David’s clear focus on the users of financial information, both in the SEC and by the market. Frequently the discussion returned to “what do SEC users and consumers need, how will they use this, and what can be done to make it even easier and more useful”.

We covered a number of topics, too many for one article, so here goes with the first installment. As you can see, the chit-chat is removed so that we can focus on the content.

1. David, can you give me a bit of background – when did you join OID, where did you come from? What motivated you to join the SEC.

DB: I joined the Commission in October 2007, as Director of the then-new Office of Interactive Disclosure. My background was in the financial services and financial information industry where I had run lines of business involved in the provision of financial information, research and analytics, as well as M&A work and business strategy. Clearly there is still a need to improve the quality of information provided to users of financial information. Frankly, it isn’t much different on the government side from the business side in terms of problems and needs.  Having grown up on the provision and consumption side, the opportunity to be part of creating the improvements is a wonderful challenge.

(From his “official” bio we also learn that “David spent 11 years at McGraw-Hill, including seven years with the firm’s Standard & Poor’s division. At S&P, he served as Director of Global Market Development for Institutional Market Services, and as Senior Director in Equity Research Services, where he led S&P’s Corporate Markets and Investor Relations Services businesses.” At this point we had the normal SEC side conversation, in which David asked me to include, and in fact did read aloud the “Standard Disclaimer”, so here goes:)

DB: As a matter of policy, the Securities and Exchange Commission disclaims responsibility for the private statements of SEC employees.  The views I am expressing today are solely my own, and do not reflect the views of the Commission, the Commissioners, or of any employees other than myself.

DB: that being said, my role has really been to shepherd, in terms of the technologies and their meaning, the SEC through the rule-making process process, and to ensure that the implementation and roll-out of the Rule is as smooth and successful. This includes, on the inside, making sure SEC staff themselves have the tools to use this content in their work.  Of course, the real work is done, and the real kudos belong to my world-beater of a team, with such stars as Jeff Naumann and Walter Hamscher, that is completely dedicated to just that goal, so I’m not alone here.

2. Lets start with the “easy” question; what would you say were the greatest successes / benefits to date?

DB: I can’t really point to anything specific yet, because the filings data is still too limited, but we’re looking forward to building on what has to date been a successful roll out of the public company Rules, shall we say “on time and on spec”. Of course, we have another two and half years of implementation in front of us, but based on progress to date, I’m pleased and quietly confident.

(I’d say that’s a pretty big success so far.)

DB: And of course now we are ramping up on Mutual fund Risk and Return reporting, which will be required starting next year.

DB: Of course, probably one of the most satisfying “leading indicators” of success, although it is not down to us specifically, has been the rapid expansion of the software community and the range of new tools and analytic capabilities that are being built and delivered.

DB: Of course there will be use of this data by the markets, but a primary beneficiary of the XBRL data submissions has to be the staff of the Commission, and it has to improve our abilities to evaluate risk, among many other critical roles.  When we released our RFI last summer, we gained the opportunity to talk with vendors and to see what they had been building. We saw nearly two dozen applications, and I have to say some of them were really cool. It was especially pleasing as the RFI was specifically written with a view to asking “Here’s what we staff at the SEC as users will want to do, what are you building that might help?” Through the demonstration and discussions we had representatives from across the Commission’s staff, including Enforcement, Examinations, Corporation Finance, and our new “RiskFin” Division. It was interesting to see how each of these user groups responded to different applications based on their responsibilities, and their wants and needs. We’ve come away with a lot to think about, and these informed the RFP we posted in early January.

DB: In terms of where I see this going, well, I think it is very important to understand that we have all entered a new phase. When I first became involved back in 2007 the majority of the tools we saw were designed mostly for the creation of XBRL content, for the preparers and accountants, and some for the taxonomy developers. There was not enough focus on delivery and usefulness of the information. Of course, when there wasn’t content there wasn’t the same need.  But we’ve crossed the divide, where we now have to make good on the XBRL aspirations, promises and investments.

(So with content we see a virtuous circle, content drives tools drives content?)

DB: Yes, I’d say we’ve finally closed the circle. Content is now being provided, and the applications for consumers and users of the data such as for investors and regulators, are being built. There remain opportunities to improve both the content and the process, of course, and we’re monitoring closely our program, as well as others around the world.  Experience with XBRL data and tools will suggest more uses, more and better kinds of data and apps, and so on.  Yes, a classic virtuous circle.

DB: Next I think we’ll see tools and applications that will enable the consumption and use of XBRL as well as other datasets to do interesting and novel things.

Our conversation continued through the hour, and toward the end David suggested that I would probably bore my audience if I attempted to put everything into a single posting. So I won’t. Expect to see additional excerpts from our conversation, and quotes from David sprinkled into posting on other topics.

As a preview, some of the other topics we covered included:

• Detailed Tagging
• Where are all the XBRL experts?
• Any big plans (with a predictable response)
• Assurance
• Tagging of the MD&A
• The volume of questions and impact of the AskOID@SEC.gov e-mail and program

You can read and comment of the first installment here: http://raasconsulting.blogspot.com/2010/02/conversation-with-david-blaszkowsky.html

1. Why is XBRL so superior in technology to its other alternatives?

XBRL is designed for superior flexibility, yet in a standardized format. Since XBRL is based on the well-developed and accepted technology XML, it’s much more accepted by technical and business users.

Open specifications such as XBRL facilitate the ability of many different software packages to produce and exchange documents that work in a number of situations. The interoperability permits organizations to transmit information pretty easily.

2. How do you evaluate progress of XBRL adoption in the USA so far? Is everything ready for the second phase of the SEC’s mandate?

It was a slow start, but since the SEC mandate took place last summer, the “movement” of XBRL has gained great momentum. Mutual Fund Risk/Return tagging will soon follow the corporate financials, and corporate actions reporting in XBRL have generated a lot of discussion and enthusiasm. The SEC, software vendors and accounting firms have all spent a significant amount of energy and effort to actively promote XBRL and to educate organizations about the benefits of XBRL. We have seen a slow shift in corporations’ perceptions of XBRL in the last few months because they are finally seeing the benefits and a competitive advantage when they adopt XBRL for both internal and external reporting.

We don’t believe every company is ready for the 2nd phase of the SEC’s mandate to provide detailed tagged XBRL documents. Detailed tagging is a much more involved process for companies, and will require well-designed software and seasoned professionals to facilitate the tagging, validation and viewing/reviewing process.

First-wave companies have already selected their tagging vendor.  Now is the time to ask the tough questions and make sure their selected vendor has a solution in place and is not afraid to demonstrate the software, talk about the process (tagging, reviewing, rendering) and has the expertise to provide the services that corporations will need to successfully complete the detailed tagging.

The second- and third-wave companies should learn from the first 500 companies and pick a vendor wisely as soon as possible. It’s not too early to start planning, even if you are a third-wave company.

3. It seems that the biggest problem for the quick adoption of XBRL is the ignorance of it (there are some who like to say this due to its long learning curve) – do you think that all “stakeholders” (CPAs, CFOs, Financial and Accounting managers…) are aware of the existence of XBRL and that they have to “meet” with XBRL, sooner or later?

We believe stakeholders are finally caught up and have shown some interest in learning more about XBRL – not just the mandate, but also the benefits XBRL can bring. The “XBRL community” needs to do a better job of explaining XBRL in plain, understandable language. XBRL can be complicated, and it’s the job of regulatory agencies, software vendors, and even the academics to simplify the technology so that companies can focus on the benefits rather than the complexity that the technology brings.

4. When we talk about XBRL, we usually talk about external reporting. Do you know some examples of successful implementation of XBRL for internal reporting? Is internal reporting currently postponed in relation to mandating external reporting?

Yes I do.  Rivet Software started in 2003 with the vision that standards-based reporting (external and internal) is the future. At that time, XBRL was still in its infancy, and we have seen the promises that XBRL can bring. We believe in the technology, but more importantly, we understand that, in order to leverage the technology effectively, we need to create software applications that are end-user focused and not overly complicated.

We tell our customers that financial transformation is a journey. Today, most companies start with the “compliance” aspect because that’s what they have to do. However, the journey will continue on to better “control” and effective “communication” of their financial information – if the appropriate technology and intelligent implementation was selected.

We have a customer that has implemented XBRL GL-based internal reporting and is ready to file with the SEC using an integrated solution provided by Rivet.

5. Do your clients internally use XBRL for data consolidation and reporting or are any of them planning to adopt XBRL to maximize the efficiency of their internal processes as well?

We are starting to see clients integrating XBRL into their internal consolidation/reporting process. Most companies are playing catch-up on the mandate, and we believe that once the filing mandate becomes a standard business process, companies will be open to discover additional ways to adopt XBRL and to make their business processes more effective.

Software vendors need to be forward-thinking and create solutions that can take the customers to the next stage. It might not be a revenue generator today, but it will go a long way to better serve the user community if software companies work hard to create solutions that are needed tomorrow.

6. Present us with Rivet Software’s product and briefly tell us how it makes our life easier in tagging and analyzing financial statements.

We have three main products that are all based on our Crossfire Financial Reporting Platform – Compliance, Controller and CFO.  All three are designed to meet the XBRL reporting requirements of SEC corporate filers as well as providing better financial reporting for all users.  The difference between the packages, in a nutshell, is that our Compliance Package is designed to manage your filing preparation by using a simple cut-and-paste approach; our Controller Package streamlines the process by automatically integrating your data and includes improved internal controls and financial statement production and consolidation; and our CFO Package has the ability to integrate multiple data sources (from your GL/ERP/CPM) while providing more effective ways to communicate your information both internally and externally.

Rivet’s Crossfire Financial Reporting Platform includes features such as built-in tagging assistance, task-based workflow to facilitate working in teams, and basically reduced complexity to protect the end-user from XBRL – your taxonomy is completely hidden so your preparers will only see financial statement line items.   All three packages include the complete support of our Professional Services team, comprised of experienced CPAs, accounting, XBRL and finance professionals, to assist the user throughout the tagging and filing process.

7. It seems to me that your company is currently focused on USA and Canadian markets. Do you plan to expand business internationally? Have you seen an interest in that?

We do focus a lot more on the U.S. today because it’s an important market, and because we have worked very closely with the SEC in the past few years.

We created an XBRL-solution for Thomson/Reuters in 2008, and it’s currently being used to process XBRL filings from China, Japan and Korea. One of our other major clients is the Microfinance Information Exchange, Inc. (MIX).  They are a leading business information provider dedicated to strengthening the global microfinance sector. The MIX is using our solutions to tag and process thousands of XBRL documents based on the IFRS taxonomy.

Rivet will look at opportunities from other countries carefully. We believe that we have created a world-class XBRL-based reporting and analysis tool that can provide great benefits to many markets.  XBRL is a solution without borders, and Rivet is well positioned to pursue international opportunities.

8. What are the minimum requirements to fulfill XBRL-enabled software? What are a few tips on what features customers should look for in XBRL software?

Our view might be different from other software companies when it comes to XBRL. We believe in a well-crafted, comprehensive solution instead of specialized software components just to address certain areas that XBRL would touch.

Take SEC corporate filers as an example. We have created the Crossfire Reporting Platform to address the entire lifecycle of XBRL. Tagging is just a start, an integrated viewing and reviewing component that is critical for the filers to fully understand the “tags” selected for their companies, and we also show the filers how their selected tags are comparable – or not – to other SEC filers as well as other filers in their industry. We also show how the filing would be rendered to the public once it’s filed with the SEC.

Our benchmark module enables the filers to compare their filings with their competitors inside the Crossfire Reporting Platform.  It’s one thing to fulfill the SEC mandate and it’s another to be able to become more competitive while fulfilling the mandate requirements.

Companies should do their homework and ask tough questions when selecting their XBRL vendors. Select a vendor that can be your partner on this journey to financial transformation; select a vendor that can turn a compliance task into an opportunity.

9. Was the software industry adequately prepared for the introduction of XBRL? What is your comment on the lack of open source solutions?

In order to implement XBRL software, companies have devoted a lot of money and resources. It’s understandable that companies would be reluctant to put their expensive IPs into open source.  Rivet has a different view and has provided open source solutions for tagging and rendering. Anyone can go to the SEC website and download the source code for the SEC rendering engine and incorporate it into their own products.  Our hope was to promote a sense of community, so collectively we can all work together to make XBRL more accessible to end-users.

10. After a period of tagging XBRL reports, we are expecting the period of report analysis, comparison… What will be the key trends of XBRL software development in the future?

Reporting and analysis is the logical next step for XBRL software development.  With the availability of financial, mutual fund and other types of business data, customers will start looking for powerful, standards-based reporting/analysis solutions soon.  Other key areas for development might be auditing applications and budgeting/forecasting applications.

Mr. Fragnito graduated from George Mason University in Fairfax, VA and earned his CPA in 1988.

1. It is known that the most important mission of XBRL International (XII) is to drive adoption of XBRL. How do you evaluate previous adoptions of XBRL around the world?

We are seeing XBRL adoption in a broadening arena of business and financial reporting, which has always been part of the mission of XII, to have XBRL recognized as the business reporting standard worldwide. Most of the earliest adoption of XBRL focused on reflecting the reporting elements required for regulated financial reporting, which is consistent with the early requirements gathering process and implementations of the XBRL technology. The facts that the US SEC, JFSA and IASCF, along with numerous other country specific accounting requirements, are reflected today in XBRL shows a strong commitment to the benefits of standardized reporting using the XBRL specification.

What we see today are broader uses of XBRL in the areas of banking regulation and reporting, risk assessment, governance, sustainability and extra financial information. What is particularly exciting is that adopters of the specification are starting to realize the benefits of incorporating XBRL earlier in their reporting cycles. The beneficial aspects of standardized reporting elements, so valuable to the regulatory community, also have great value internally. We at XII are most encouraged by the trend to utilize XBRL within the internal reporting processes of organizations. This is part of an evolution in the understanding and acceptance of the technology and approaches the true potential of XBRL to enhance reporting processes, not just improve data validation.

2. What is your greatest achievement (or the most significant event) in the previous two years, since you are leading XII?

XII has achieved great success through the dedication of a large number of committed volunteers over many years. The individuals and companies involved with XBRL are truly visionary. They have committed untold hours and dollars to realize a vision of a more efficient system for sharing business information globally.

To work with these dedicated individuals, to expand the global network of XII and to evolve the governance and staff to support these individuals has been an honour.

3. Currently, there is a 24 full jurisdictions, mostly from developed countries. How do you expect to run the process of establishing new jurisdictions when the focus is going to be transferred to less developed countries? Whether the whole process may slow down or based on experience of predecessor countries the whole process may run faster?

XII has direct membership options for companies in developing countries – and we are seeing increased interest in this membership category. XII also has the ability to define “jurisdictions” as a country or region, providing options for developing regions.

There are a variety of membership models using by international standards bodies, and we have looked at them all. Because XBRL is an international standard which often is applied to country specific reporting requirements (i.e. country specific reporting standards) our model works very well to advocate and support adoption.

4. What are the key moments in the process of adoption of XBRL in some country?

The key is finding that decision maker or influential individual who is willing to challenge the status quo and who is aware of the international trends in business reporting and regulation. XBRL adoption is a fundamental shift in the transparency, and efficiency, of business reporting. To be effectively implemented it requires collaboration, communication, openness and partnership between the reporting, regulatory and vendor community.

5. Currently, there is XBRL mandate in progress for first 500 companies in the United States. How do you evaluate progress of this project so far?

The XBRL adoption project by the US –SEC is really a model for the elements I mentioned above – collaboration, communication, openness and partnership. The US SEC, along with XBRL US and a broad range of other contributors, has implemented a significant adoption of XBRL in a very transparent and successful project. I predict this particular implementation of XBRL will be looked at as a model for best practices worldwide.

6. Is there some project, currently in progress, that you can highlight as very interesting?

I personally find the projects related to the reduction of regulatory burden particularly interesting. Within the Netherlands and Australia these projects are being referred to as “Standard Business Reporting”. The XBRL specification is a major component of the technological aspect of these projects.

The basic idea is to reduce the regulatory burden to the reporting entities through a collaborative effort between regulators and businesses. To identify the core information needed and to work, again collaboratively, with the vendor, regulatory and reporting entities to define and collect only those data elements required – using a standardized format – XBRL.

7. What are the key innovations and benefits which XBRL will contribute to the accounting in the future?

The accounting profession is generally struggling with the idea of deconstructing standardized forms and the implications for assurance with the idea of standardized data – which can be consumed as individual data elements. I am confident the assurance issues will be resolved.

Accounting information, at its heart, is information for comparison and analysis. Most consumers of business information use a variety of sources, both financial and “extra financial” in their analysis and judgements. XBRL will bring these data sources under the same standard and allow more efficient and higher quality analysis. XBRL will also help to facilitate convergence by making comparison of reporting under different accounting standards more efficient – hopefully driving further convergence – again benefiting global commerce.

8. XBRL is known as a standard for financial reporting. Are there projects from other specific areas that are based on the adoption of XBRL?

Many. XBRL is being used for mutual funds research reports, sustainability reporting, statistics, banking, tracking of money laundering, insurance, business registries, MD&A disclosures and many other areas in business reporting. XBRL certainly has a stronghold in the area of financial reporting – but it clearly can handle a broad range of reporting requirements.

9. One of inevitable question when we talk about XBRL is software support. What do you think about the quality of software solutions that are currently on the market?

This is one of those questions that can always be answered, “it could be better”. A large number of international and regional software vendors are committed to providing XBRL capabilities and are active participants in the XII organization. As with any technology trend historical business models can be challenged and consumer demand drives investment and innovation. To this point XBRL adoption has been lead by the regulatory community. Many of the solutions to date have focused on this market and the reporting entities with solutions geared toward development of taxonomies, collection and reporting of data in XBRL format. As more data become available we will see higher demand for analytical tools and XBRL enabled ERP and even transaction level systems.

The maximum benefit of standardizing data will be realized when that standardization comes at the transaction level. We see growing demand and tools to accomplish these objectives.

10. Does XII and in which way (could) support software start-up projects in with respect to XBRL?

Our focus is to understand and evaluate the business requirements for the specification, evolve the specification to meet accepted requirements and provide the support resources to facilitate adoption of XBRL.

The software community is driven by consumer demand, which has been steadily growing as adoption expands globally. Our position remains that the market will drive the demands and requirements for software tools and solutions. Through the XII consortium we bring together members from the entire supply chain, and each party benefits from those interactions.

11. There are some opinions that the disadvantage of XBRL is that it is primarily computer readable language. Do you think that Inline XBRL may be the answer for this?

Some might say it is a disadvantage, I would say it is the advantage. The fact is computers are very good at sorting through huge amounts of information, based upon human instruction, and returning the data we are interested in. Just think of the amount of information available today on the internet. Without some means to “search” this huge store of information it would really be worthless. I view XBRL in a similar fashion. Business information, prior to XBRL, was not easily searchable and therefore not very valuable.

Inline XBRL, along with other technologies which will surely be developed, will provide the functionality to display and link data from within XBRL instances directly to documents and websites. This is, yet, another example of improved functionality as a result of market requirements, which will continue to evolve both the standard and software tools.

12. At the end, does it seems to you that everybody are still more focused on the filling of XBRL instance documents, but not so much on using their benefits in report analysis?

Yes – but this is really a function of the adoption curve and the volume of data available today in XBRL. I expect this will change rapidly.

We also anticipate, and are experiencing, greater interest in moving XBRL back further in the organization – to the transaction layer. Up until recently XBRL was viewed as a “report then convert” idea. Individual companies are starting to realize the benefits and value to their internal information systems and reporting through the use of XBRL. I predict this will create another wave of adoption in the near future.

Altova is the choice of over 3.5 million customers worldwide, and is an active member of the World Wide Web Consortium (W3C), the Object Management Group (OMG), and XBRL International.

In our most recent product release, we added support for working with XBRL across multiple tools in the Altova MissionKit tool suite to give organizations tackling XBRL compliance an affordable, easy-to-use solution for automating the way their financial data is captured, shared, reported, and analyzed.

1. XBRL is already accepted as the official standard for financial reporting. How do you (Altova) see the prospects for an XBRL mandate for financial reporting in the world and especially in the United States?

The SEC mandate in the United States has certainly given XBRL a lot of additional attention in recent months, but it is important to also note the growing number of XBRL projects worldwide – particularly programs in the Netherlands, Australia, Japan, and other countries. In order to continue to be successful, all of these initiatives share a common need for additional support from the organizations that are subject to financial reporting requirements. XBRL is beneficial on many levels – to regulatory agencies like the SEC and FDIC, to analysts, and very importantly, also to individual companies. Right now it seems that the rush to compliance may be overshadowing the crucial realization that XBRL can greatly increase internal reporting efficiency and reduce costs.

It is still very early, but we firmly expect that over time more and more organizations will begin to see XBRL not only as a mandate, but also as a revolutionary solution to eliminating the errors and inaccuracies that have resulted from traditional accounting and financial reporting methods.

2. What are the main benefits of XBRL in your opinion? Could XBRL statements help to prevent some future financial crisis?

XBRL offers benefits at all levels of the financial reporting workflow, increasing speed, reducing costs, virtually eliminating the risk of human error, and allowing for machine validation and automation. Not only does XBRL give computers the ability to process financial data at a semantic level, but it also gives investors and regulatory agencies the potential to view and analyze this data in real-time. In short, XBRL offers a mechanism for truly realizing the value of financial data, and XBRL software provides the means through which to do this.

Does XBRL have the capability to avert a future financial crisis? That is difficult to predict, indeed. On one hand XBRL will definitely offer more transparency and oversight with respect to financial information. On the other hand however, human ingenuity has always managed to come up with new ideas or financial constructs that difficult to grasp and control, so there is no telling what financial wizards might be cooking up next. In fact, if you look at the history of bubbles and busts in financial markets, the pattern is always one that is driven by greed and fear – two very human emotions that are fundamental to our nature. I doubt that XBRL will have any impact on controlling those emotions, so we should be prepared to deal with future market bubbles and busts, since they are an integral part of the system.

3. Altova has a long line of experience in development of various XML, database and UML tools. Since February 3rd, 2009, thanks to Altova, the XBRL world has been drastically changed. What are the XBRL tools from Altova and their specific applications for working with XBRL related documents?

There are three tools in the Altova MissionKit that support working with XBRL: XMLSpy, MapForce, and StyleVision.

XMLSpy

XMLSpy supports XBRL validation, which allows users to validate their XBRL instance documents against the associated taxonomy to ensure accurate and compliant financial reporting.

XMLSpy also includes a graphical XBRL taxonomy editor for visualizing taxonomies, as well as creating taxonomies or extending standard taxonomies to meet the needs of your organization. The XBRL taxonomy editor uses the same editing paradigm as XMLSpy’s popular graphical XML Schema editor, providing a graphical view of XBRL taxonomies and intelligent editing features. By organizing different components on easy-to-filter tabs and providing informative icons, mouseover messages, detail windows, and context-sensitive entry helpers, the XMLSpy XBRL taxonomy editor makes it easy to both view and understand existing taxonomies, and create new ones.

MapForce

MapForce is an any-to-any graphical data mapping and integration tool with support for transforming XML, databases, flat files, EDI, Excel 2007, Web services, and now XBRL, to/from other data formats and/or structures. This enables XBRL users to extract data directly from backend systems and convert it into fully compliant XBRL instance documents, or transform XBRL data received for repurposing in any number of ways. These conversions can be run on a one-time basis of automated through code generation in Java, C#, C++ or via the command line.

This makes public financial data submission a repeatable and highly manageable process, allowing organizations to produce valid XBRL reports as required based on the variable data stored in accounting system fields. MapForce can also be used to aggregate XBRL data for financial analysis.

XBRL taxonomies are inserted as the target or source of any mapping by referencing the taxonomy schema or an existing XBRL instance file. The XBRL component is represented in a hierarchical structure, clearly defining the root element, link roles, hypercubes, dimensions, context, concepts, and facts defined by the taxonomy.

StyleVision

StyleVision is a graphical stylesheet designer for rendering output in HTML, PDF, and Microsoft® Word based on XML, databases, and now XBRL taxonomies.

To create a straightforward XBRL report, users simply drag and drop a taxonomy financial statement onto the design pane as an XBRL table and then use StyleVision’s graphical interface to format stylesheets for simultaneous display to different publication mediums. The XBRL Table Wizard makes it easy to customize the table structure and specify the concepts to include in the report.

In the case of the US-GAAP taxonomy, which provides, in addition to the hierarchical organization in its presentation linkbase, some best practices information on how to structure XBRL instances, users can simply select US-GAAP mode to have StyleVision automatically output the data according to this information.

A sample XBRL instance file can be assigned to the taxonomy so that the progression of the design can be viewed on-the-fly by clicking the preview buttons at the bottom of the screen.

The XSLT and XSL:FO-powered publishing templates autogenerated by StyleVision can be incorporated into highly automated financial reporting workflows to create a repeatable process. Because the overall structure of an organization’s XBRL reports are likely to remain the same, XBRL financial statements can be automatically rendered at any time based on the original stylesheet design and the updated financial data.

4. Which sort of companies and professionals (xbrl filers, investors, portfolio managers, analysts) will benefit most from using Altova XBRL tools?

While our traditional target market of developers will definitely benefit from XBRL support in Altova MissionKit tools, the graphical, drag-and-drop interfaces and other usability features provided in XMLSpy, MapForce, and Stylevision make it accessible to a wide range of users, from accountants to analysts and beyond. To help increase accessibility across various audiences, we’ve also created a free XBRL Online Training course to help technical users come up to speed on the accounting side of XBRL, and to make key XBRL concepts more transferable for those with an accounting background – all while working with Altova MissionKit tools.

5. What is the first (or maybe the most important) step a company should do in the process of implementation of XBRL?

In order to realize the benefits that XBRL can provide internally, it is vital that companies invest some time in restructuring current accounting and reporting infrastructure. Traditional accounting and reporting practices have been led by accountants, and this only makes sense. But now there is a technical dimension to financial reporting with software tools and technology standards, and it is very important that IT or development be involved in the decision-making process, at least at the early stages of adoption. XBRL implementation does not have to be complicated; it does not necessarily require new systems, expensive software tools, or even new hires. What it does require is a certain amount of financial and technical expertise that is easily attained through cooperation between accounting and IT or development departments.

6. What do you see as the risks in the process of introducing XBRL in the United States and is there a possibility that the whole process could fail at some point?

It is unfortunate that the XBRL mandate by the SEC is currently being used as a bit of a political power play. If the XBRL introduction were to fail or is rolled back, then it would be as a result of a political gamble. And this would put the US at a serious disadvantage in the global marketplace, as XBRL adoption in other countries will continue.

In essence, the introduction of XBRL only aids transparency, so there is little fundamental risk associated with it. The fact that companies have to deal with a transition to XBRL amidst the worst financial crisis of the past 50 years is a bit of “bad timing” for sure, but those companies that are stable and positioned well to not only survive this crisis, but also thrive in the following recovery, will be able to take advantage of some very unique benefits that XBRL brings to the table.

7. Liz Andrews posted an article “XBRL…so much more than compliance” at Altova blog recently. Do you think that most of companies don’t realize the real power of XBRL? How long do you think it’ll take for investors and analysts to realize the benefits of XBRL?

The United States XBRL mandate has come at a time when the public is looking for an economic watchdog, and XBRL fits the bill. Because of this, there has been a lot of talk about the benefits of XBRL financial reporting to the general public (transparency, etc.) and even more effort to convince accountants and reporting companies that the XBRL mandate will not disrupt the status quo.

The truth is that XBRL provides a multitude of benefits to organizations, but that some very simple adjustments may need to be made. It is simply just not enough to tag financial reports once they have been generated in the traditional manner… this only serves to obfuscate the process by adding another layer of potential human error on top of a process that was already fundamentally flawed.

Altova has a long history of supporting only the most established and successful technology standards, and XBRL has certainly found a place among them. It is not uncommon for companies to be a little slow to realize the benefits of standards – we have seen the same with XML – but it is still early. Once the early adopters begin to publicize the benefits that they have experienced with XBRL implementation, others will follow.

8. At the end, let’s not talk about Altova as XBRL solution provider but as a company which itself applies XBRL. Is Altova ready to fulfill financial reporting requirements? Do you plan to adopt XBRL to maximize the efficiency of your internal processes?

Altova is a private company and is therefore not subject to external financial reporting requirements. However, we do have a project underway to look into how we can take financial data from SAP BusinessOne and work with it internally using XBRL. This has the potential to help us to automate our internal financial analysis and inter-company reporting. Again, it is important to recognize that the benefits offered by XBRL resonate far beyond the need for compliance and data transparency to regulatory agencies.

KEYNOTE SPEAKERS ANNOUNCED

• Mr. Philippe Danjou, Member of International Accounting Standards Board (IASB)
• Mr. Pierre Delsaux, Director of Free Movement of Capital, Company Law and Corporate Governance Directorate at DG Internal Market Europe – European Commission
• Mr. Yao Feng, Deputy Director – General, Department of Accounting, China Securities and Regulatory Commission
• Mr. Jean Hilgers, Director and Treasurer,  National Bank of Belgium (Central Bank and Business Register)
• Ms. Daniele Nouy, Secretary General of the French Banking Commission (CEBS – banking supervisors and central bank)
• Mr. Mohandas Pai, Director of Human Resources, Infosys and Trustee of the IASC Foundation
• Mr. Carlos Montalvo Rebuelta, Secretary General of Committee of European Insurance and Occupational Pension Supervisors (CEOIPS)
• Mr. Hans van Damme, President of European Federation of Chartered Accountants
• Mr. Harm Jan Van Burg, Netherlands Standard Business Reporting Programme Director, Ministries of Finance and Justice

Join us in Paris, France – June 23-25, 2009 at the Meridien Montparnasse Hotel and Conference Center

Be sure to check out the early bird registration offer which includes a discount of €100 and a free Gala Dinner ticket for the elegant dinner cruise (a €110 value, while supplies last) if you register soon!

“Reducing Reporting Burden with XBRL: a Catalyst for Better Regulation”

Dear XBRL International Friends and Conference Attendees:

On behalf of XBRL International Inc., XBRL France and the conference planning committee, I would like to welcome you to the 19th XBRL International conference where you will learn how interactive data is improving transparency in business and financial reporting around the world. We have a great event planned with the theme “Better Reporting with XBRL:  a Catalyst for Better Regulation”.

This year’s International conference is hosted by XBRL France in cooperation with XBRL Europe at Le Méridien Montparnasse Conference Center in Paris, France.  The conference will be highlighted with influential keynote speakers representing worldwide governments, financial institutions, projects and organizations.  This conference is designed to provide real world examples and demonstrations of how XBRL is improving transparency & reducing the reporting burden around the world in the six interactive Special Interest Sessions.

I also welcome you to Paris, the capital of France and the country’s largest city.  Paris is one of the world’s leading business and cultural centres, and its influence in politics, education, entertainment, media, fashion, science and the arts all contribute to its status as one of the world’s major global cities.  I hope you will take some time to enjoy the sights and sounds of the city while you are here. Our gala dinner, scheduled for Wednesday night, provides you one opportunity.  Join us on the Seine for an insider’s view of beautiful Paris.

I would like to thank all those who have helped put this event together: the XBRL International staff, XBRL France, XBRL Europe, members of the conference planning committee, track chairs, and presenters.  They all devote a lot of time and effort to organizing this event.  Special thanks to our conference sponsors who contribute to the success of the 19th XBRL International Conference.

I look forward to welcoming you to France!

Kind regards,

Jean-Luc Menda, Chairman
19th XBRL International Conference
Representing XBRL France & XBRL Europe

–(BUSINESS WIRE)–The 19th XBRL International Conference: “Reducing Reporting Burden with XBRL: A Catalyst for Better Regulation” is produced by XBRL International, Inc. and is hosted by XBRL France in cooperation with XBRL Europe. The conference will offer a unique opportunity to interact with and hear from key vendors, the XBRL leadership and various government regulators discussing XBRL solutions, projects and implementations of XBRL to provide greater regulatory transparency.

The governments of Argentina, Australia, Belgium, Canada, Chile, China, Denmark, France, Germany, India, Israel, Japan, Korea, Netherlands, Norway, Singapore, South Africa, Spain, Sweden, Thailand, United Kingdom and United States have regulatory mandates or voluntary filing programs for business reporting requiring XBRL.

Featured Speakers Include:

• Mr. Pierre Delsaux, Director, Free Movement of Capital, Company Law and Corporate Governance, DG Internal Market, European Commission
• Ms. Daniele Nouy, Secretary General, French Banking Commission (CEBS – banking supervisors and central bank)
• Mr. Xiaoxue Li, Vice Chairman of the China Securities and Regulatory Commission, Peoples Republic of China
• Mr. Jean Hilgers, Director & Treasurer, National Bank of Belgium (Central Bank and Business Register)
• Mr. Hans van Damme, President, European Federation of Chartered Accountants
• Mr. Philippe Danjou, Member of the International Accounting Standards Board (IASB)
• Mr. Mohan Pai, Director of Human Resources, Infosys and Trustee of the IASC Foundation
• Mr. Harm Jan van Burg, Senior Policymaker, Netherlands Ministry of Finance

Business Executives and Finance Professionals will participate in unique workshops and forums to hear leading financial industry experts speak on:

• Why governments are requiring XBRL for business reporting and how financial analysts, regulators, accounting professionals, and technologists are preparing their clients to comply with these government mandates
• What tools and cost-effective solutions are being used to help organizations harness the power of XBRL to enable investors, management, analysts and regulators with limited knowledge of XBRL move forward with implementation to create, access and analyze data in a reliable format that they can easily use and reuse.
• How Interactive data greatly improves the way in which business information is created, communicated and consumed to help investors, management, analysts and regulators increase transparency and make quicker, better and more accurate decisions.

Who Should Attend and Why:

• CEOs, CFOs and Finance Professionals of public and private companies will be educated on how to tag their financials in XBRL using cost effective vendors and understand the external and internal benefits of using interactive data through real users. They will hear from companies using XBRL to improve investor relations activities and from internal financial management teams using XBRL to consolidate financials and better manage the operations of the company.
• Investment Professionals and Analysts will learn from peers around the world how they are using XBRL to improve the depth and breadth of coverage of companies to help their clients make better investment decisions.
• Regulators will share how they are using XBRL to improve transparency efficiency and accuracy of regulatory reporting and hear case studies from government agencies successfully using interactive data.
• Software developers will be briefed on new tools and add-ons that can be used in their XBRL products that have been created from leading XBRL technology providers.
• Accounting and audit professionals will learn how XBRL is improving client relations by integrating XBRL into their practices and those of their clients.

Where Le Meridien Montparnasse in Paris, France, a world-class conference and exhibition facility located at 19 Rue du Commandant Mouchotte, Paris 75014

For XBRL International Conference Information:

http://www.xbrl.org/Home/

Registration will open in early March and those registering during the “early bird” period will receive a discount on admission to the conference, plus a complimentary ticket for the River Palace Cruise Gala Dinner and Reception (limited seating).

The River Palace Gala event is a two hour cruise on the River Seine where guests will enjoy Champaign and aperitif on the ships’ upper deck in the fresh Paris evening air and an elegant gourmet dinner served in the Grand Dining Room in the lower deck which is graced with floor to ceiling windows for a breathtaking view of Paris at night.

The new format is called XBRL, or extensible business reporting language, an interactive technology which will allow investors to download financial statements directly into spreadsheets and analyze data.

Interactive data has the potential to increase the speed, accuracy and usability of financial disclosure, and eventually reduce costs, said the U.S. Securities and Exchange Commission (SEC) in a final ruling released on Tuesday.

The 500 companies, both U.S.-based and foreign, are those that have more than $5 billion in worldwide public equity float, said the SEC.

Companies are required to use a list of electronic tags, which will contain labels that provide information necessary for interactive data to be processed.

The SEC said companies may choose to tag their own financial statements using commercially available software, or can opt to outsource the tagging process.

The XBRL rule will apply to the next lot of companies, about 1,800 of them, in 2010, and in the following year to another 12,000 public companies.

Under the new rule, companies will not only be required to use interactive data for quarterly and annual reports, but also on forms 8-K and 6-K which contain revised or updated financial statements.

Companies will also have to provide the same interactive data on their corporate Web site to “encourage its widespread dissemination, thereby contributing to lower access costs for users,” the SEC said.

(Reporting by Kavita Chandran in Bangalore; Editing by Andrew Callus)

Original article: http://www.reuters.com/article/businessNews/idUSTRE51A1YJ20090211