XBRL Conference Brussels - Bas Groenveld And Paul Hulst - Xbrl Detail Tagging And AuP
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The second year of the SEC mandate proved much harder the first year. Detail tagging takes a lot of work, and a lot of communication with the service provider. Luckily, Deloitte has performed Agreed-upon Procedures on the filing before submitting it to the SEC. We will demonstrate our lessons learned and our suggested improvements for next year.
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XBRL Conference Brussels - Bas Groenveld And Paul Hulst - Xbrl Detail Tagging And AuP
- 1. XBRL detail tagging Client work and AUP Bas Groenveld & Paul Hulst Deloitte Innovation, Netherlands 18 May 2011 15:00 – 15:30 22nd XBRL International Conference, Brussels
- 2. Introduction Client case SEC mandate Client request Approach ◦ Tools Lessons learnt 2 © Deloitte Innovation B.V.
- 3. Bas Groenveld Paul Hulst Deloitte XBRL team Deloitte XBRL team Involved in XBRL Involved in XBRL since 2005 since 2007 Projects: Projects: ◦ Taxonomy creation ◦ Taxonomy creation ◦ SEC Filing ◦ e-reporting architectures and ◦ Disclosure management processes ◦ Deloitte annual report in XBRL ◦ Automating instance document creation for statutory reporting and credit reporting ◦ Design of formulas for validation 3 © Deloitte Innovation B.V.
- 4. Dutch company on US stock exchange Foreign Private Issuer 20-F US GAAP Large accelerated filer Public float > USD 5 bn Year end 31/12 Deloitte audit client 4 © Deloitte Innovation B.V.
- 5. Which accounting principles are used? US GAAP What is the public float? IFRS > $ 5bn > $ 700mn Smaller Phase 1 Phase 2 Phase 3 June 2009 June 2010 June 2011 Block tagging; grace period June 2010 June 2011 June 2012 Detail tagging; grace period June 2011 June 2012 June 2013 Fully liable; no grace period ~ 500 ~ 1,200 ~ 8,000 Companies affected 5 © Deloitte Innovation B.V.
- 6. Theoretical deadlines Year-end 20-F deadline XBRL deadline FY2009 2009/12/31 2010/06/30 2010/07/31 FY2010 2010/12/31 2011/06/30 2011/07/31 FY2011 2011/12/31 2012/04/30* 2012/04/30 *SEC amendment 2008/08/27 Actual filing Year-end 20-F filed XBRL filed FY2009 2009/12/31 2010/01/29 2010/02/26 FY2010 2010/12/31 2011/02/15 2011/03/9 FY2011 2011/12/31 ~ 2012/02/15 ? 2012/02/15 ? 6 © Deloitte Innovation B.V.
- 7. The client had 2 options: Prepare (and file) XBRL themselves Outsourcing of XBRL filing Since “traditional” 20-F was filed by outsourcer, and client was not familiar with XBRL, outsourcing was their choice 7 © Deloitte Innovation B.V.
- 8. Although no assurance is required, the client asked for “comfort” on their second XBRL filing (20-F in year 2 detail tagging). Offering In April 2009 the AICPA issued Statement of Position 09-1, Performing Agreed-Upon Procedures Engagements That Address the Completeness, Accuracy, or Consistency of XBRL-Tagged Data. Deloitte offered to perform an AUP engagement. 8 © Deloitte Innovation B.V.
- 9. Definition: “Agreed-upon procedures is when the accountant is hired to issue a report of findings based on specified procedures. The users of the report agree upon the procedures to be conducted by the accountant that the user believes are suitable. The user takes responsibility for the adequacy of the procedures. In this engagement, the accountant does not express an opinion or negative assurance. Instead, the report should be in the form of procedures and findings. A representation letter is prepared that depends on the nature of the engagement and the specified users.” 9 © Deloitte Innovation B.V.
- 10. • Have “comfort” about the right application of XBRL. • To improve their knowledge / experience with the XBRL reporting process. • Assist with understanding the complex XBRL specifications and SEC XBRL requirements (EDGAR Filer Manual). • Reduce reputational and other risks associated with submission of inaccurate financial information. • Want insights and best practices to improve XBRL-formatted financial statements & processes. 10
- 11. Split up AUPs and selected EFM rules to concise work packages ◦ Tools help to remove the XBRL complexity ◦ Enabling non-XBRL experts to complete packages ◦ Split XBRL/non-XBRL is 50%/50% Multi-disciplinary team ◦ Deloitte Audit ◦ Deloitte XBRL team Close coordination with client‟s financial reporting department Tools ◦ Off-the-shelf XBRL instance/taxonomy viewer ◦ Deloitte Innovation developed AUP tools to support audit teams 11 © Deloitte Innovation B.V.
- 12. Input data for AUP: ◦ „traditional‟ 20-F in HTML or PDF ◦ XBRL instance document ◦ XBRL extension taxonomy Schema Label, presentation, calculation & definition linkbases ◦ Any documentation about mapping 20-F to XBRL and decisions about concept choice and extension Be aware of different file versions and make sure the filed versions are the actual files reviewed 12 © Deloitte Innovation B.V.
- 13. XBRL Source data XBRL instance Rendering conversion document * Depending on process; instance is created directly 20-F from source XBRL system(s), or from HTML SEC form taxonomy & document extension Objects of review 13 © Deloitte Innovation B.V.
- 14. Output to check if there are: ◦ Units without facts ◦ Duplicate units ◦ Single identifier scheme & entity ◦ Naming conventions for contexts Standard XBRL validation (including calculation) with off-the- shelf XBRL software 14 © Deloitte Innovation B.V.
- 15. EFM 6.6.36 If a fact whose element type attribute equals „us- types:dateString‟ [...] refers to a specific date, then it must be an ISO 8601 format date. 14-9-2009 2009-09-14 15 © Deloitte Innovation B.V.
- 16. Reporting inconsistent “decimals” attribute creates confusion us-gaap: Effective Income Tax Rate [...] ◦ 0.124 with precision=2 ◦ 0.12 ? 16 © Deloitte Innovation B.V.
- 17. Tools not always perfect, leading to uncertainty for non- technical users Same tool; different outcome Export to spreadsheet User interface EPS displayed shares/EUR when exported 17 © Deloitte Innovation B.V.
- 18. 18 © Deloitte Innovation B.V.
- 19. Calculation inconsistency Sample BS extract 2010 2009 2006 Inventory 1,500 1,400 900 Property, Plant & Equipment 1,200 1,000 Goodwill 500 500 Non-current Assets 3,200 2,900 1,500 Sample disclosure extract (for detail tagging): [...] At December 31, 2006, Inventory level was 900. Additional column as [...] At December 31, 2006, Non-current Assets amounted to 1,500. interpreted by XBRL software from instance document 19 © Deloitte Innovation B.V.
- 20. XBRL and EDGAR Filer Manual are difficult to understand for non-technical users Knowledge of company‟s financials and US GAAP is essential User-friendly tools are necessary, both for looking up concepts (& extension creation), data exports and rendering / viewing In the current reporting outsourced process, the one month grace period can be necessary to allow for effective review Companies should be aware that communication and coordination with outsourcer can be time-consuming 20 © Deloitte Innovation B.V.
- 21. Questions? 21 © Deloitte Innovation B.V.
- 22. We invite you to our booth in the exhibition hall. Contact us directly: ◦ Bas Groenveld, bgroenveld@deloitte.com ◦ Paul Hulst, phulst@deloitte.com or visit www.xbrlplus.com Follow us on Twitter: @xbrlplus 22 © Deloitte Innovation B.V.