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The Accountant's Guide to XBRL (3rd Edition)


Clinton E. White, Jr., DBA, MBA
Professor of Accounting & MIS
Univesity of Delaware

Table of Contents

Preface

The second edition of The Accountant's Guide to XBRL was published in December of 2006. Two years have passed, many important events have transpired, and the momentum of the XBRL movement has increased significantly. One major development is the support and funding of XBRL for financial reporting by the U.S. Securities and Exchange Commission. Since Christopher Cox, current Chairman of the SEC, coined the phrase "interactive data" in 2004 to describe financial data in a form that is easily accessible and processable with computerized applications, the SEC has been promoting the use of XBRL to improve the transparency of financial reporting and its usefulness to all interested parties. It began a pilot voluntary XBRL filing program in 2005. It issued contracts to upgrade the EDGAR database system to accommodate and support XBRL and to fund XBRL US to complete the development of the US GAAP taxonomy. XBRL US issued version 1.0 of the US GAAP taxonomy in December, 2007 and it reached approved status in August, 2008. Working closely with the SEC, XBRL US has released a new version of the US GAAP taxonomy for public comment and expects it to be released for use in February 2009. Also, the SEC has issued a proposed ruling to phase in over three years reporting in XBRL format for all publicly-traded companies. It is expected that the 500 largest US domestic publicly traded companies will be required to start furnishing supplemental financial statements in XBRL format with all of their SEC filings. Others will follow suit over a two year period. For details about these and other SEC activities see: http://www.sec.gov/spotlight/xbrl.shtml.

The US GAAP XBRL taxonomy v1.0 is significantly more robust than earlier XBRL taxonomies. It now contains over 12,000 standard element names representing accounting and financial reporting concepts to be used for tagging items in financial statements and footnote disclosures. It is composed of a number of industry "entry points" that include the commonly used statements and disclosures in major US GAAP industry categories; including, Commercial and Industrial, Banking and Savings Institutions, Brokers and Dealers, Insurance, and Real Estate.

XBRL is a vocabulary for financial and business operations reporting built on the XML foundation. As you will see in this text, my approach is that a person needs to understand the basics of the XML foundation in order to understand XBRL. A major new XML vocabulary for e-business documents is UBL (the Universal Business Language). I use it to introduce XML in this edition of the Accountant's Guide. I came to understand that XML is not simply another "language" with which to write code but instead a computing paradigm on which to build vocabularies for other purposes, such as business documents and financial and business operations reporting. I have researched, published articles, taught professional workshops and seminars, and built XBRL into a capstone course for accounting majors at the University of Delaware. The First Edition of The Accountant's Guide to XBRL (May, 2006) was the initial result of this experience. The Third Edition (December, 2008) is an improved, expanded, and up-to-date resource with which to learn the basics of XBRL. It is an emerging technology and my intent is to continue to publish it under my own name at www.SkipWhite.com.

The current XBRL Specification 2.1, as amended in April 2005, is considered to be stable but is evolving steadily based on the results of pilot programs and initiatives around the world. In the US, XBRL US, in conjunction with the SEC, plans to release an updated version of the US GAAP taxonomy on a yearly basis. XBRL GL 2007 - "the journal taxonomy," has reached recommended status and is beginning to be be used for internal accounting. This is emerging technology that is changing the face of financial and business operations reporting around the world. It will continue to evolve and you will need to keep posted on current events.

The Accountant's Guide to XBRL is the foundation. By publishing it and other materials under SkipWhite.com, I will be better able to provide current information, books, cases, and dynamic support. The Accountant's Guide to XBRL will be supported through the www.SkipWhite.com Web space. For academics, I will provide lesson plans, solutions, new exercises, and up-to-date information and techniques as they evolve. For accounting practitioners, I will provide exercise solutions and up-to-date information and new materials as they become available.

Who Should Read This Book

This book is for accounting and MIS academics and their students, practicing accountants, and anyone else involved with computerized financial and business operations reporting. If you fit into one of these categories, you will get the following from this book:
  • A basic understanding of XML documents and the XML language foundation
  • A basic understanding of UBL (the Universal Business Language)
  • A basic understanding of XBRL and how to use XBRL taxonomies to build XBRL instance documents
  • A basic understanding of the XSLT processing language to transform UBL and XBRL reports into Web pages
  • A basic understanding of XBRL GL 2007

Organization of This Book

This book is organized according to the scheme that the author uses to teach XBRL to senior accounting majors at the University of Delaware and to accounting academics and practitioners in workshops and seminars. The chapters are designed to be read sequentially but several teaching schemes are discussed at the end of Chapter 1 in the section titled Notes on Teaching.

Chapter 1, The Accountant's Guide to XBRL:

This chapter gives a non-technical introduction to XBRL, the role of markup in computerized information processing, and the business reasons for XBRL.

Chapter 2, The XML Document Foundation:

UBL (the Universal Business Language) is a new XML vocabulary that defines a library of business documents to be used in e-business relationships. This chapter introduces the rules that all XML documents must follow and the basic XML foundation by way of UBL. Like UBL, XBRL is an XML vocabulary for a special purpose - financial and business operations reporting.

Chapter 3, The XML Language Foundation:

Both the UBL and XBRL specifications were created using the tools provided in the XML family of languages. As such, this chapter introduces three members of the XML language foundation necessary for understanding XML vocabularies (e.g. XBRL): the XML Schema language, XML Namespaces, and XLink.

Chapter 4, XBRL Instance Documents:

All XBRL documents are referred to as "instance documents." This chapter introduces the rules that XBRL documents must follow to be a valid "instance documents."

Chapter 5, Transforming Documents with XSLT:

XBRL instance documents are meant to be read by software applications. As such, they are likely to be "transformed" for many different purposes including Web pages for human consumption. This chapter introduces a simple scripting language to transform XML documents into human-readable form - Web pages.

Chapter 6, The Current State of XBRL:

This chapter discusses the current state of XBRL including major adoption activities, tools available for XBRL instance document creation, and thoughts about its future.

Appendix, XBRL GL 2007:

This appendix introduces XBRL GL 2007 - the "journal taxonomy." XBRL GL has now reached recommended status and is expected to have a major impact on XBRL and accounting in computerized information systems.

Table of Contents

Chapter 2: The XML Document Foundation (Overview)

XML (the Extensible Markup Language) is a meta-language - a language used to create other languages. XML is not like other languages with which you may be familiar as it describes basic rules and syntax that XML documents must follow instead of a specific programming vocabulary. XML is used as the foundation on which to build vocabularies for specific purposes. We will cover two XML vocabularies in this book: Universal Business Language (UBL) (UBL OASIS, 2006) and XBRL. This chapter focuses on business documents as defined in the UBL vocabulary.

XML was developed to meet a number of design goals: to be usable over the Internet, to support a variety of applications, and to be human-readable. To meet these design goals, the XML Specification 1.0 (XML, W3C) describes a class of data objects known as XML documents and their behavior when processed by software. A data object is simply a computer processable item containing data and instructions. As you might expect, the XML specification is quite technical. It describes the rules and syntax that XML documents must follow to be well-formed and valid. Well-formed XML documents are those that follow the basic rules for all XML documents and can be processed by XML-enabled software. Valid XML documents must follow additional rules for specific classes of XML documents as described in XML schemas and DTDs (Data Type Definitions). (Schemas are covered in Chapter 3: The XML Language Foundation.) This chapter is devoted to introducing, in a non-technical manner, well-formed XML documents and their role in business. As you will see, XML documents are a very important part of the XML family of technologies. They contain tagged items of data and conform to specific rules and syntax that make them processable by all XML-enabled software applications. As such, they have become the preferred way to move data between software applications on a computer network and are being built into business processes.

The remainder of Chapter 2 includes:
  • The Rules for Well-formed XML Documents
  • The UBL Catalogue
  • UBL Element Names - Metadata
  • XML Attributes - Additional Meaning for Elements
  • A UBL Purchase Order Document
  • XML and UBL in Business
  • Exercises

Table of Contents

Chapter 3: The XML Language Foundation (Overview)

As you learned in Chapter 2, well-formed XML documents contain data values surrounded by XML elements and attributes in a nested hierarchy. The rules and syntax for creating well-formed XML documents are one portion of the XML foundation as described in the XML Specification 1.0 (XML, W3C). This chapter focuses on XML languages that form another portion of the XML foundation.

The XML language foundation is a family of languages for processing and validating XML documents and for creating other specifications/vocabularies, such as UBL and XBRL, which extend the XML family of technologies for specific purposes. The XML Schema language is a key part of the foundation because it is used to specify the structure and contents of XML documents. All specifications that extend the XML family, including UBL and XBRL, are formally expressed using the XML Schema language. As you might expect, the XML Schema language is quite complex. In this Chapter we introduce the XML Schema language in a non-technical manner along with two other XML languages necessary for understanding UBL and XBRL - XML Namespaces and XLink.

The remainder of Chapter 3 includes:
  • The XML Schema Language
  • UBL Catalogue Schema Document
  • The UBL Common Basic Components Schema
  • The UBL Common Aggregate Components Schema
  • Validating XML Documents
  • XML Linking Language (XLink)
  • The XML Foundation and XBRL
  • Exercises

Table of Contents

Chapter 4: XBRL Instance Documents (Overview)

This chapter describes valid XBRL (eXtensible Business Reporting Language) instance documents and XBRL taxonomies and their role in reporting financial and business operations information.

As you have read, XML is a set of rules and syntax that provides a foundation with which to create XML documents and other languages and specifications that extend the XML family of technologies. Like UBL, XBRL is an XML vocabulary. While UBL defines the structure and contents of common business documents and their reusable data components, XBRL defines the structure and contents of common financial and business operations reports and their reusable components. The XBRL Specification 2.1 (XBRL International, 2005-11-07) is a set of rules and syntax to follow to create XBRL instance documents and XBRL taxonomies and extensions. XBRL documents are referred to as "instance documents" because each one is an instance of a class of documents described in the XBRL Specification. The XBRL Specification includes a schema which defines the structure of all XBRL instance documents and schemas defining XBRL taxonomies; which can be thought of as dictionaries defining elements to be used in XBRL instance documents. Like all XML specifications, the XBRL specification is quite complex and XBRL instance documents look complex to the uninformed user. The goal of this Chapter is to help you understand, use, and interpret XBRL instance documents and taxonomies.

To help you understand and build XBRL instance documents, we will first enumerate and illustrate the rules for valid XBRL instance documents. Note that we will not validate our XBRL instance documents using validation software because as of this point in time XBRL validation software packages are not free. We will discuss the levels and complexities of XBRL validation and several validation tools. Also in this Chapter, we will discuss the framework for U.S. financial reporting using XBRL instance documents and conclude with illustrations of financial reporting using the new U.S. GAAP v1.0 taxonomies.

The remainder of Chapter 4 includes:
  • The Rules for Valid XBRL Instance Documents
  • The root element and namespace declarations
  • The schemaRef element
  • The context element
  • The unit element
  • XBRL items
  • Understanding the US GAAP Taxonomies v1.0
  • Extension Taxonomies
  • Exercises

Table of Contents

Chapter 5: Transforming Documents with XSLT (Overview)

This chapter describes the basics of the Extensible Stylesheet Language for Transformations (XSLT) and its role in processing XML documents for presentation and other business purposes.

As you know, XML documents are meant to be read by software applications. Though easily understood, they are tedious at best for humans to read. In fact, one of the major benefits of tagging data using standardized vocabularies like UBL and XBRL is that the instance documents can be read, validated, and transmitted over networks completely by software applications. Humans do not need to be involved. XML documents tend to be long-lived and are frequently "transformed" to serve any number of purposes, one of which is presentation for human consumption. Transformation means to change the structure and markup of an XML document so that it can serve another purpose, such as presentation as a Web page, without human intervention. The Extensible Stylesheet Language for Transformations (XSLT) is a subset of the XSL language that is used for performing transformations on XML documents. XSLT is one of the most useful pieces of the XML foundation because it can be used to transform any XML document into a presentation format, such as HTML or PDF, and to rearrange and combine any number of data items from any XML documents into other XML documents.

To help you become familiar with the basics of the XSLT language, we will first develop an example of XSLT instructions to transform an XML document into an XHTML Web page. HTML is the language used to create Web pages and an XHTML Web page is one that follows the basic rules of XML and is well-formed. We will then build on this example with more complex e-business examples of XSLT transformations using UBL instance documents to complete several typical e-business events.

The remainder of Chapter 5 includes:
  • The Basic XSLT Language
  • Transforming a UBL Catalogue into a XHTML Web page
  • Processing XSLT Instructions
  • Running the Transformation
  • XSLT Processing
  • Transforming using the apply-templates instruction
  • Exercises

Table of Contents

Chapter 6: The Current State of XBRL

This chapter discusses the current state of XBRL in financial and business operations reporting around the world, some of the tools available for instance document creation and validation, and the future role of XBRL and related emerging technologies.

A number of major XBRL initiatives are in progress in the U.S. and around the world. In the U.S., the SEC and XBRL U.S. have teamed up to continue to fund and support the further development and implementation of XBRL as the reporting format for all publicly traded companies. Currently 13 U.S. taxonomies have achieved XBRL International's "Approved" status and one has achieved "Acknowledged" status. An "Acknowledged" taxonomy is one that has been tested for compliance with the XBRL 2.1 Specification. An "Approved" taxonomy is one that has been through an open review process after reaching "Acknowledged" status and has been used to create a number of instance documents to confirm that it adequately covers the data it purports to represent. Currently 18 international taxonomies have achieved "Acknowledged" status, including 16 country-specific taxonomies and two covering IFRS and global standards.

In addition, many tools are available for instance document and taxonomy creation and validation and for viewing, rendering, and analyzing XBRL financial statements. Companies creating SEC filings, for example, have a choice of using a spreadsheet-based tool, such as Rivet Dragon Tag, or a stand-alone software package, such as Fujitsu XWand. Companies can also contract for services with third party agents specializing in instance document creation and SEC filing, including EDGAR Online, Business Wire, and Merrill Corp. Financial analysts and other users have a choice of tools for viewing and analyzing XBRL instances, including Rivet Dragon View, IMetrix, and EDGARizer X.

To help you understand what is currently happening and what can be expected in the near future, we will discuss these activities and others affecting the world of XBRL financial reporting. This is emerging technology. It will evolve and will have a dramatic effect on accountants, clients, and the profession.

The remainder of Chapter 6 includes:
  • XBRL Around the World
  • FDIC
  • SEC
  • PCAOB
  • International Agencies
  • XBRL Services and Tools
  • The Future State of XBRL
  • Exercise

Table of Contents

Appendix: XBRL GL 2007

This appendix presents XBRL GL 2007, also known as "the journal taxonomy." The GL stands for "Global Ledger." The XBRL GL v1.1 specification (April 17, 2007) has reached recommendation status, which means it has been tested, has been used to create instance documents, and is now ready to be used for XBRL GL applications. The XBRL GL taxonomy is designed to enable the efficient handling of financial and business information contained within an organization. In contrast, the XBRL we have considered so far in this book has been for financial and business operations reporting.

Since all accounting systems are computerized, the XBRL GL taxonomy supports the representation of anything that is found in a chart of accounts, journal entries or historical transactions, financial and non-financial. XBRL GL is the taxonomy to use to tag the data behind the information in XBRL financial statements and operational reports. It is expected to have a big effect on businesses and their adoption of XBRL for internal processes and external reporting.

The remainder of the Appendix includes:
  • A Modular Set of Taxonomies
  • The XBRL GL core (gl-cor) taxonomy
  • The XBRL GL advanced business concepts (gl-bus) taxonomy
  • The gl-cor:entryHeader element
  • The gl-cor:entryDetail element
  • Other XBRL GL taxonomies: gl-muc, gl-usk, and gl-taf
  • Exercise