Guest post by Gideon Benari.

XBRL has been chosen as the reporting standard for Solvency II, thus bringing market harmonisation of the European insurance industry a step closer.

The eXtensible Business Reporting Language format, essentially a sophisticated form of text mark up, facilitates the transfer of data between financial organisations in a standardised way. This will allow regulators to make like-for-like comparisons of data from insurers across Europe.

XBRL Reporting Structure - "XBRL reporting structure SOURCE: JFRC 2010"

A study published in the Journal of Financial Regulation and Compliance (2010)* examining the use of XBRL for Solvency II reporting notes, “Regardless of the benefits of the new regulatory frameworks, the application of the IFRS and Solvency II may increase financial risk due to their inherent technical complexities. Many of these complexities are caused by the ways that information is handled in intermediate management processes, which can lead to confusion in the information exchanged between people and systems.”

XBRL is suited for Solvency II reporting as it allows local regulators and individual firms to add extensions while maintaining the integrity of the reporting standard. It provides a common language for reports from different source (see chart).

Because XBRL is machine readable, it can both reduce human error and increase efficiency in data handling, while its built-in internal validation process improves data accuracy. In addition, the use of a text file format keeps data volumes manageable.

The basics: fun with <p>s and <h>s

XBRL is a markup language, which means it uses a system of tags to define data. A simpler form of markup language is HTML, which is used to create web pages, although HTML only defines the appearance of content. This web page is essentially a text file that is marked up in a particular way so your browser, be it on desktop or mobile device, knows how to ‘read’ and display the information accordingly.

Marking text with the tag <p>will define it as a paragraph</p> while marking it with <h1>defines it as a heading and displays it accordingly</h1>.

XML, the markup language used for XBRL, goes a step further by defining what the tagged data is rather than its appearance. For example, data can be defined as a date, an invoice number, or a product description. This makes it possible for different databases to merge and for companies to exchange data using a common platform.

The beauty of XML is that tags can be defined to suite the purpose of the data, unlike HTML where tag definitions are fixed; <h1> can only be header text at the highest level, it cannot be redefined by the user.

XML uses a taxonomy to define the format that best suits the purpose of the data. The taxonomy is like a dictionary which tells the machine what each tag means and sets the rules on how the tags interact. For example, you cannot multiply two text fields.

XBRL in detail

There are a number of universally recognised XML standards and XBRL is one of them. XBRL, which is overseen by XBRL International, was specifically designed for financial reporting.

The 2010 study notes, “To facilitate the communication of business information, XBRL was created as an adaptation of XML to financial and business data with a clear objective: to “homogenize” business information and make it compatible in an environment where different entities must communicate quickly and clearly with each other but where there are no efficient programs or formats.”

IFRS XBRL tag example - "On the left-hand side excerpt, the company’s current assets are listed as six line items of text as they would appear in a statement, starting with Assets, Current assets, Cash, etc, and ending with Total current assets. The right-hand side excerpt displays the same information from the same statement. However, the formatting has been removed to reveal the computer-readable XBRL tags concealed beneath the human-readable report. SOURCE: IFRS"

The tags and definitions used in the XBRL taxonomy (which include items such as <cash> and <liabilities>) are stored in a format which can then be processed according to the reporting standards needed.

IFRS produced this handy guide to using XBRL with IFRS reporting. In the example on the right, each item in the balance sheet is labelled according to the taxonomy, the tags include: <cash>, <TradeAndOtherCurrentRecievables> and <Inventories>. The balance sheet can then be displayed and formatted into different reports that suite the reporting standards.

XBRL a suitable format for Solvency II

One reason why XBRL is suited for Solvency II reporting is that the taxonomies can be extended to local level. According to the study, “Once a taxonomy has been created at the European level, extensions can be added to cover the particular features of national regulatory frameworks, thus ensuring the homogeneity of the system of information while giving it the flexibility that the framework requires.”

The study concludes, “The advantages of this project [XBRL], together with the particular characteristics of the Solvency II project, show that XBRL is an ideal technology tool that can make a valuable contribution to the reform of the regulatory framework of the insurance sector in Europe.”

Here is the second part of the interview with Mr. Daniel Roberts CEO of raas-XBRL, the past Chairman of the XBRL US Steering Committee, and member of the XBRL International Assurance Working Group.

7. Do you have experience with another project outside the USA that you would single out as particularly interesting? Could you compare that project with the SEC XBRL Mandate?

The two that immediately come to mind are the HMRC project in the UK and the SBR project in Australia. HMRC is progressing with an ‘easy in’ for the first year (mandated)  for financial statements that are associated with tax returns. They have started with a “minimum set” of required data to be tagged, and have gone so far as to provide a web based template for smaller companies.  In Australia the focus is on building XBRL into the entire reporting structure to government, to drive process efficiencies throughout the economy, where the private economy touches government. These are both wide ranging projects, certainly wider ranging than the SEC project.

Unfortunately we’re also seeing New Zealand step even further back from XBRL. Considering the disproportionate number of Kiwis involved in XBRL around the world, it is sad to see it not take root in Wellington.

8. How do you evaluate the work of the XBRL International and the support it provides to the local organizations and world-wide projects?

XBRL International is of course the owner of the standard and runs the XSD (XBRL Standards Board) and other working groups (such as the Assurance Working Group, a personal favorite). The biggest problem with XII is that it is and remains chronically underfunded. Years ago I gave the incoming CEO one piece of advice – build a program to achieve global adoption, then price the program, then go to the ISC and say, these are the resources we need to accomplish the program.

The latest Strategic Plan is a great step in that direction, although possibly a little meek. But it is still a great step. Of course, it is no secret that I think the proposed governance changes will not solve the problems of underfunding and lack of active volunteer support. And no matter how it is worded, keeping the Board of Directs responsible for resourcing the organization (i.e. responsible for funding) is, frankly, silly. The CEO is responsible for funding the organization, through growing membership, faster response times to the needs of the jurisdictions, and programs funded out of a growing pool of revenue and funds.

For example, the iXBRL dialect of XBRL should have come from the XSD, not from the user community. The Europeans called for a versioning standard for years, yet the chronic lack of funding and volunteers forced jurisdictions to begin developing their own versioning standards. This is a new standard, founded on and using XBRL as its core. Either XII steps up and gets in front of the needs of the market, or XII will find itself playing catch-up.

Certainly the ISC (International Steering Committee) and governance of the organization requires a major overhaul, and an overhaul is coming. Unfortunately I have little faith that it will solve the fundamental problems facing XII.

9. Are you and your company currently engaged on any of the projects which have to do with the XBRL?

As a matter of fact we are. One of the biggest challenges, as I’ve already mentioned, is the coming wave of filers with the SEC and the lack of experts, the cost, the time involved and the complexity of the standard, software and tools that are available. We’ve entered that market, quietly in the past few months, specifically because we believe that doesn’t need to be the case.

raas-XBRL takes the complexity out of compliance with the SEC’s XBRL mandate. We do this through the application of state of the art software and processes, skilled people and a longstanding commitment to XBRL.

10. Not to discuss the same topic again, I have one question not connected with the XBRL for the end. Can you recommend any good book which you have read lately?

For years now I’ve been reading a series of murder mysteries by Michael Jecks called “the last templar” series. They are set in the 1316 – 1326 (for far) and follow a few characters as they investigate murders, completely in a middle-ages, southwest England context. Very clever, and full of real historical information, which I think is vital. Of course, I also always have a history or some facet of Carthage nearby.

In my previous post I have wrote about the significance of the #XBRL hashtag. If you track this tag, you probably won’t need any other source of information regarding this topic. It contains all the news right after they appear on the internet. A few individuals and companies track the events on the entire internet daily, and industriously post them on this tag. Track the tag for a while and you’ll find out who they are.

A couple of days ago I asked myself a question – Which individuals and companies track the Twitter #XBRL hashtag? Are those just XBRL Solution Providers and XBRL enthusiasts or are there also the XBRL SEC Filers? In one of my tweets I have ask the Question:

I considered making a new Twitter list “XBRL SEC Filters” based on the results and implementing there all the Twitter accounts of those companies that belong to this group.

Nobody responded!?

After a few days I repeated the call:

Only one response from @MaxGang.

Is it possible that on the timeline there aren’t any other XBRL SEC Filers? Maybe there are, but they didn’t want to respond? Honestly, I didn’t expect hundreds nor thousands, but a few, sure.

In any case, if you are one of the XBRL SEC Filers, or are about to become one, or you are in another way obliged to deliver financial reports in the XBRL form, it would be good to start tracking this tag, if you haven’t already. Trust me, you will learn a lot of useful information which can help you in the decision-making, and maybe save you a lot of money.

XBRL is a part of Web 3.0 and in a way it represents an introduction for it. One day when Web 3.0 comes, XBRL will be all around us. A lot more work is needed to be completed until that moment. Until then I would like to present to you where on Web 2.0 you can find information about XBRL and which channels I use to get informed about the events in XBRL world.

LinkedIn

There are a lot of LinkedIn groups that deal in some way with the XBRL. To some groups, it is a primary field of interest, and for others it is a casual thing. I will single out only three groups that I am a member of. These three groups gather almost all of the significant individuals of this area.

• XBRL Interactive Network (1.746 members, moderated by XBRL International)
• XBRL Knowledge Sharing Group (778 members, moderated by Vinod Kashyap)
• XBRL Matters (486 members, moderated by Daniel Roberts)

What fascinates me regarding the LinkedIn group is that I get much more referral links on XBRL Blog Magazine from it then from let’s say Twitter, even dough I am much more active on the Twitter. Also it is a bigger probability that if you ask a question you’ll get a better response through a LinkedIn group then the Twitter. LinkedIn community is more active then the Twitter community!

RSS

There is a large number of blogs, magazines and so on, that occasionally write about the different aspects of the implementation and adoption of the XBRL. I will name only those sources of information that primary deal with the theme of XBRL:

• http://xbrl.squarespace.com/ – it is enough to say Charlie Hoffman’s blog.
• http://raasconsulting.blogspot.com – the thoughts of Daniel Roberts on implementation of the XBRL, legal regulations etc. wrote in a very positive – critical way.
• http://hitachidatainteractive.com/ – news and commentary from the Hitachi XBRL Business Unit.
• http://blog.rivetsoftware.com – the blog of one of the leading XRBL software vendor.
• http://paulwilkinson.com/ – the commentaries of Paul Wilkinson about different financial questions, it is often a topic for the XBRL.
• http://xbrlca.blogspot.com/- the XBRL Canada Blog promotes XBRL standard on the field of Canada.
• http://blog.bowne.com/xbrl/ – the blog of the Bowne Company which is ran by Rob Blake. Inactive for a while – hope that will soon change.

Facebook

Of course we must mention the Facebook. There are several groups that have in their name the word XBRL (I am a member of some), but mostly have a small number of members that are not so active. It might be worth to mention one of them – XBRL International, that has 146 members.

After all, Facebook is more about the fun then the business.

Twitter

Tracking the Twitter lists is a good way to find in one place all individuals and companies from a certain area. There are a large number of lists about the XBRL. The bad thing is that the existing Twitter’s search engine does not provide the search of the lists. Still, I believe that if you are an average user of the Twitter, you can relatively easy find some of them.

I would like to present to you one which I created and which contains, in my opinion, all the significant individuals and companies that work on the XBRL, and are on Twitter: http://twitter.com/#!/xbrlblog/xbrl. The list currently follows 72 of the Twitter accounts.

Certainly the most important source of information for me is the hashtag #XBRL. Sometimes I wonder whether or not is necessary to track anything else, since all the XBRL important information go through this tag. Track this tag for a few days and you will easily realize who are the most influential people and companies in this area.

Next to this tag, I sometimes track the official tag of the XBRL International Conference. The #XBRL22 is the current one, by which you can track all the important details about the forthcoming 22nd XBRL International Conference.

I hope I did not forget to mention anybody. If I have, remind me and supplement this list.

I was pleased to have an opportunity to speak to our old friend, Mr. Daniel Roberts at the beginning of this 2011. Daniel is CEO of raas-XBRL and has been at the heart of XBRL since 2003. He is the past Chairman of the XBRL US Steering Committee, and member of the XBRL International Assurance Working Group. He has a detailed knowledge of XBRL that comes from being deeply involved in XBRL for the past eight years.

1. The year 2011 is definitely the year of XBRL in the USA. The third phase of transmission of the XBRL data to SEC is approaching. Will the plans for this year be successfully accomplished and what are, according to you, the biggest risks of this not happening?

My own expectation is that 2011 will be a fantastic and fascinating year for XBRL, in the US and around the world. Of course, all eyes are on the third year of the SEC XBRL compliance mandate, and the SEC itself estimated that 8700 companies would be required to provide XBRL versions of their 10Q and 10K filings. I do expect a backlash, as the mandate approaches and companies realize they simply are not ready. We are seeing that already in the UK, and I’m very pleased to see HMRC come out and say that there will not be a delay.

On the other hand, as word of the effort involved with “detailed tagging” becomes more widely understood, I think the SEC is going to have to demonstrate the value that is actually being derived from the extra effort.

2. Perhaps it is too soon to talk about it, but how do you see the 2012. XBRL year in the USA and on the global scale? Will we still be dealing the same problems, or do you expect a new phase of the XBRL use?

Lets start with globally – 2012 will be a year of looking back on a successful completion of the first phase of the SEC’s compliance mandate and the first year of the HMRC mandate. Across Europe companies reports will be in XBRL (even if they do not know it), and across Asia the number of countries collecting data in XBRL will continue to expand.

Of course, the recent letter (1 Feb 2011) from the FEI (Financial Executives International) outlining examples of the cost and impact of detailed tagging makes grim reading. The letter discusses a survey of members by the FEI’s CCR (Committee on Corporate Reporting) in which at least one member indicated that detailed tagging had resulted in an additional 2000 hours per quarter of effort to create the XBRL. While I would expect that requirement will drop considerably, if that was for the first time creation of detailed tagged XBRL, that equated to 4 full-time additional resources for that quarter. What small business can afford to hire additional staff simply to produce one additional output format for the SEC filing?

So I predict that long before we get to 2012, the SEC will have deferred detailed tagging for the group-3 filers. It is that or face a wholesale rebellion by filers, and howls from hundreds of rented congressmen on their behalf.

3. This phase is most definitely the biggest challenge so far regarding the preparation of XBRL. On one hand, the companies in question are small, with small budgets, and on the other with a small number of employees who could dedicate their time to the preparation of the XBRL. What is your recommendation for these companies in terms of In-House vs. Outsource?

This may seem self servicing, but they should outsource. It is this simple – XBRL remains a “new” technology and as such will require too many hours of learning and training, coupled with the purchase of expensive software, for something that is a 4 times a year output process. There are vendors (raas-XBRL included) that are able to provide XBRL production services at far below the actual costs that any company would incur by brining the process in-house.

Certainly, companies need to be looking at how and when they can bring this in-house. And the key factor should be when their existing consolidation and reporting systems providers build XBRL into their processes as a standard feature. XBRL should not the catalyst for replacement of consolidation reporting systems – changes in the business, acquisitions and major process re-engineering exercises with demonstrated value through-out the internal reporting processes should be the drivers.

And in truth, bringing an 80+ hour process in-house right now does not make sense. But brining a few-hours process in-house in a year or two does.

4. Do you have the information as to what are the basic expenses for hiring an outside company as a consultant for the preparation of the XBRL? On the other hand, is it possible to assess how much effort (measured in days or money) is required to prepare the data In-House?

That’s possibly an unfair question, because I know that the pricing for XBRL production services ranges from around $6500 to well up around $30,000 plus (for the XBRL). The problem is that the price is not indicative of the value. I do warn people that the lower end of the pricing comes with all sorts of risks, and we are advising companies to ask some basic questions:

• How much work will we need to do? How much time do I really need to budget for our people?
• Do we need to learn XBRL to be able to do this?
• How much will your support (consultants, support, etc) actually cost us?
• How much time after “pencils down” do we have to budget to complete our XBRL?

The reason that it is an unfair question is because raas-XBRL does the work, clients do not need to learn XBRL, so we do not charge for additional support (because there really shouldn’t be any required beyond the agreed service) and we have minimal time after “pencils down”. Oh, and did I mention that, because of the absolutely leading edge technology and our process, we actually come in much nearer the lower end of the price-range. In fact, the average filings already with the SEC using this technology already show lower than average error rates, which has to be one of the key indicators.

5. Are you acquainted with the information of how the accounting software vendors have kept the track of the process of implementation of the XBRL? Have they supported the creation of the XBRL data within their application? Are you for or against using the “third party” software for the preparation of the XBRL data?

Well, there are at least a couple of questions there, so let me see if I can answer those. Clearly some of the vendors are building XBRL export as a natural function of their software. That’s a good thing. I fully expect to see that expand. Certainly in the UK you simply cannot be in the accounting software business without an iXBRL capability, and at least one vendor has seen some terrible press due to their failure to deliver their solution in time.

At the same time, I think the idea that a company might use XBRL as a key decision point in a software selection process to be as silly as making the ability to produce HTML as the key decision factor in selecting an accounting package. The operational needs of the business should be taken as a whole, and the most important capabilities should dictate or support the use or replace or upgrade decision, not a new reporting format that is non-core.

6. Previous years you have warned about the lack of real experts in this area. Has the number of experts increased in the USA during the first two phases of the data preparation? What happens if most companies decide to hire an outside consultant – will there be enough competent experts?

The simple answer is “No, there are not enough experts”. Absolutely not. And that it one of the biggest risks facing the 3^rd year of the SEC’s program. I’ve said before and will repeat here – there are going to be a lot of ‘instant experts’ coming out of the woodwork. Google them.

Find out if the software you are offered or that your filing agent is using, has been used for actual filings. I’m coming across filing agents saying “we’ve built out own solution.” Or “yes, we have a solution that we’ve go from …. And we know them. Of course we are a bit of a beta site for them, but that makes them responsive.” I even heard one filing agent tell me that they weren’t going to be producing any calculation linkbases because “they are optional, so we’re ignoring them”. Time to check your facts.

Mr. Dejan Gostimir graduated and earned his Master of Science degree at Faculty Of Economics and Business at the University of Zagreb, Croatia with the thesis titled: ”XBRL as possible standard of financial reporting in the Republic of Croatia”. He was member of the board at ORKIS Ltd., project leader and editor in chief of the accounting and financial web portal ORKIS.hr that was the first project of this kind in Croatia. ORKIS.hr is still number one financial and accounting web portal in Croatia. He has more than thirteen years of experiences in accounting, finance and management. He has attended training for the certificate of certified accountant. He is a regular columnist of ORKIS.hr portal on the subject of XBRL, management, finance and accounting. Currently he is working as a CFO in pharma industry and he is a guest lecturer on the Zagreb School Of Economics and Management on the subject of XBRL.

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…

Patrick Quinlan is the President of Rivet Software, a Denver, Colorado-based company that is pioneering the future of global financial communications. Patrick comes to Rivet as a business executive with a proven track record of startup development, funding strategies, and capital investment success. He brings experience in the small and emerging business space and is skilled in executing strategic planning, performing market analysis, and guiding new product development. As the CEO of several successful startups and as a consultant, Patrick has helped many companies build and manage effective sales teams, meet revenue goals, and achieve peak performance. He graduated from the University of Kansas and holds an MBA from Regis University.

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.

How to visualize (render) your XBRL Instance document in a few steps with Altova StyleVision.

• Prepare you XBRL fillings or download some valid fillings from SEC site.
• Download Altova StyleVision (30 days trial) and install it on your computer.
• Start Altova StyleVision and click File -> New -> New from XBRL Taxonomy.
• Point to you Taxonomy (Schema) document and click Open.
• Assign prepared Instance document by clicking Browse -> Open.
• On the left side of the screen you will get Schema Tree with available Elements, Concepts, Periods,…

• On the center of the screen is report designer.
• Type “My First Report” header in report designer and format it using Formatting toolbar.
• Drag one of the available concepts from Schema Tree under the report header.
• XBRL Table Wizard pops up – drag Period into Column Breakdown and Concepts into Row Breakdown. Click OK.

• You will get a table in report designer.
• If you click some of the Preview tabs you will render your report into appropriate format.
• Click File -> Save Generated Files -> … to create .xsl transformation for the choosen format.
• Project -> Save Project.

Edgar Online posted in his monthly newsletter a list of online resources where you can learn more about XBRL. XBRL Blog Magazine also take a place on this list.

“A portion of this list was generated in an XBRL discussion forum, where members generously responded to a CPA student’s plea for resources that would explain the technology, but were written for people without a programming background.”

Find a full list here.

Tony Fragnito has acquired over 20 years experience managing finance and operations within for-profit and tax-exempt organizations. He has worked with volunteer leadership for over 15 years in both the educational and biomedical research fields. Throughout his career he has managed financial, governance, business service and technology issues both from an operational and strategic perspective. Tony joined XBRL International, Inc. as the organizations first CEO in 2007.

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.