XBRL Homework Activity

ACCT 614

XBRL Study Module and Homework

This is a self-paced study module with a graded homework assignment due in your assignment folder no later than the date shown in the related Conference and Course Schedule.

In each section, I offer lecture notes on aspects of XBRL that take you to vetted XBRL resources that offer review of the concepts covered in the lecture. During this activity, remember, we do not have to learn a lot of XBRL code. What we have to learn is 1) the terminology, 2) how to read some code (similar to reading html code from an Internet doc), 3) how to select appropriate code from an XBRL taxonomy, and 4) how to check code in financial statements. At the end of module are several homework problems thatyou will submit for grading.

Background on XBRL

eXtensible Business Reporting Language (XBRL) is a language for the electronic communication of business and financial data and has been implemented by International Financial Reporting Standards (IFRS), the United States Generally Accepted Accounting Principles (U.S. GAAP), and many other national and international accounting standards bodies. In the United States, the Securities and Exchange Commission (SEC) requires public companies to file their financial statements in XBRL. The following article from Accounting Web provides a good summary to-date of the path to XBRL compliance and the SEC’s filing requirements: Public companies must submit XBRL exhibits to SEC in 2011. Essentially, we are now in “Phase 3”, details of which are available by visiting:Summary of XBRL for Phase 3. The FASB reports that

This [XBRL] standard is maintained by XBRL International, an international non-profit consortium of approximately 450 major companies, organizations, and government agencies around the world. It is an open standard, provided free of license fees, and is already being used in numerous countries. ( 2013)

XBRL – Learning the Terminology

XBRLis an “open technology standard for reporting and analyzing business and financial information. Instead of treating financial information as a block of text, XBRL provides a computer-readable tag to identify each individual item of data” (E&Y, 2010). Each tag contains information on reading, calculating and presenting the data. The tags employed in XBRL are interactive, meaning they actively link back to source documents. An example of tagging is shown in the following figure (and you’ll see a real-world example in a later section):

Figure 1-2: Example of XBRL tagging in a financial document (Source: Hoffman and Watson, 2010)

Financial Highlights / 2009 / 2008
Net Income (Loss) / 5,347 / 1,147
Sales, Net / 244,508 / 366,375

A document that is tagged is called an XBRL-enabled “instance document”. Instance documents can be any kind of report, but are primarily financial statements. To learn XBRL, we DO NOT have to learn a lot of coding because there is now software and services to help us. We DO NEED to learn the terminology, be able to read some code, select code from a taxonomy, and check the coding on our documents. The steps involved in creating an XBRL instance document are deciding on your software, selecting the taxonomy, creating your entity profile in your software, tagging your data, validating your tagging (which the software helps with) and exporting/publishing your document.

As Hoffman and Watson (2010) describe, XBRL tags add the behind-the-scenes structure to instance documents, but “People don’t work with the information at the tag level…computers can work with the information and help people do all sorts of new, interesting and helpful tasks (p. 20).

In our example about, the $1,147 appears on a GAAP Income Statement for the period 2009, in US dollars with three decimal places.

Let’s start to get a better feel for the process

Begin by viewing this video provided by Altova, an XBRL software provider: XBRL Overview
Now let’s carefully read this overview prepared by IFRS.org: XBRL Fundamentals.

What I particularly like is the diagram the IFRS presents (shown below). Simply, an element is an item on a financial statement whose label, definition, calculation, presentation and reference are determined by the schema (list of elements), linkbases (directions or specifications) contained within the larger taxonomy (classification system).

A taxonomy is an “electronic dictionary of business reporting elements used to report business data. A taxonomy is composed of an element names file (.xsd) and relationships files directly referenced by that schema. The taxonomy schema files together with the relationships files define the concepts (elements) and relationships that form the basis of the taxonomy. The set of related schemas and relationships files altogether constitute a taxonomy (SEC, 2011).

Taxonomies may contain hundreds or even thousands of individual business reporting concepts, mathematical and definitional relationships, along with text labels in multiple languages, references to authoritative literature, and information about how to display each concept to a user.

There’s other terminology used in XBRL, so let’s take a closer look at terminology. Visit this link and print the glossary: Read the terms, and now continue reading to learn how they relate to each other in more detail.

Now we’re going to take a closer look at XBRL tagging. Don’t let this scare you because later on, I will show you the software that we use to make our work easier.

Reading the Tagging

Let’s begin by looking at some financial statements that companies have prepared in XBRL. Many companies who file interactive data documents with the SEC also share the information on their websites.

Go to: Footlocker. com and click on SEC XBRL Viewer

Select one of the financial statements from the left hand menu. This takes you to a very nice view of the company’s most recent SEC filings. It’s in a web-friendly and readable format. Click on some of the accountnames on the financial statement. What are you seeing in the pop-up boxes? Keep these in mind. We’ll come back to them in homework.
Now exit back to Footlocker. com. Select “XBRL Instance Document”. WOW! You should be seeing something like this.

This is the XBRL tagging stored behind Footlocker’s SEC financials. It’s A LOT of information, but every tag comes from the greater taxonomy and determines the label, definition, calculation, presentation and reference of the linkbase reference.

Now we don’t have to worry, because software (like Altova, Fujitsu, Crossfire, Webfilings) is going to help us create such instance documents. But, we need to have a basic understanding of things so that we know if we are using the software correctly. So, before digging into how to create an instance document, let’s learn more about taxonomies.

More on Taxonomies

Anyone can create a taxonomy, ranging from a local community of users to governing bodies for accounting. XBRL.org is an international non-profit organization for XBRL users that has a process for recognizing and approving taxonomies. Visit their ApprovedTaxonomies page. There are taxonomies approved for GAAP by FASB and the SEC, and taxonomies for IFRS. The recognized taxonomy for US GAAP reporting is the 2012 US GAAP Financial Reporting Taxonomy. Note: In early 2013 we will adopt a newer GAAP taxonomy, but the principles you learn here will apply. To read more, visit: Pending 2013 Taxonomy.

If a taxonomy doesn’t contain all the elements needed, the preparer can change it by adding extensions, or company-defined line items that “extend” the current taxonomy. Preparers have the ability to create new custom terms if they have a very unique reporting situation that is not available in the taxonomy terms. The extension taxonomy may include, exclude, or change information from the base taxonomy. The extension can be regarded as an overlay that modifies the structure of the taxonomy, adds and prohibits elements, their labels, linking, order of appearance, and other characteristics. The main idea behind an extension is to encourage business users to tailor the taxonomy to their specific needs, while using the elements of the base taxonomy to ensure comparability. For example, if you include revenues for various products in the income statement but the standard taxonomy only includes an element called Other Revenue, you should add these new revenue tags as “children” of Other Revenue that could be rolled up into Other Revenue “parent” for comparability (Edgar Online).

To gain a deeper understanding of extending taxonomies, read Chapter 6 of the XBRL Preparers Guide.

Let’s view the current 2012 US GAAP taxonomy. Visit 2012 US GAAP Financial Reporting Taxonomy.

At the bottom of the page click on the “Accept” button. An XBRL Viewer is now opening. Click on “Taxonomy” in the upper right corner and Open. Click on US GAAP (2012-01-31) and then click on Commercial and Industrial. Your screen should look like this:

“Commercial and Industrial” is called an industry “entry point”. It is a set of specifications that link together the concepts and relationships typically needed by entities reporting in that industry. I like to think of them as “templates” for reporting in specific industries.

In the upper left corner, change the selection in the drop-down box from Presentation (a type of linkbase) to Calculation (another type of linkbase).

Click on the + sign and expand 104000. What you see should look somewhat familiar. It is essentially how we structure and calculate standard classified financial statements.

Look in the content of the Details window on the right. Notice the good information it tells us. The labels are in English. There is a definition for the element and authoritative references.

Now click on the Tree Locations tab. Note that the image on the right detail screen shows the Presentation specifications for the report. Combined, these are the XBRL “directions” for a classified US GAAP Balance Sheet.

In the view below I am looking at the specifications to calculate the Statement of Income (Including Gross Margin). Can you find it on the left-hand menu? Look at the right side, what appears in the Detail Tab; here we learn that the item is Discontinued Operations, Income (Loss) from the 2012 GAAP Taxonomy. The data that will populate the field is monetary; the Period Type is “duration” versus “instant”. An element with a period type of "instant" has values that are only measurable at a point in time; "duration" is used for all other elements, including textual information. Most elements in the taxonomy have the "duration" period type.

Viewers like the one we’re using at fasb.org put a user-friendly interface on the taxonomy, but remember, there is a lot of tagging that happens as seen in the Footlocker instance document example above. So, how do we create a good instance document?

Rules for Creating XBRL Instance Documents

The “rules” for creating XBRL instance documents, according to White (2010), are that all XBRL instance documents must have the items listed below. (Note: in this example we are referring to a previously approved 2009 GAAP taxonomy, which we might find in an older SEC filing.)

use xbrl as the root “parent” element name with namespace declaration attributes -

the namespace is the unique identifier of the taxonomy, for example the root element and namespace declaration for 2009 us-gaap taxonomies is:

<xbrl xmlns:us-gaap=

(for 2011, the namespace looks like this: <namespace=

have a first “child” element that is a schemaRef element with two xLink (creates hyperlinks) attributes – one that declares a “simple” link and another that points to the URL of the taxonomy’s schema. for example, to point to the 2009 us-gaap taxonomy schema would read:

<schemaRef xlink:type=”simple” xlink:ref=

contain at least one context element with entity and period identifiers, the purpose of which is to identify the business entity, specify the reporting period, and indicate the reporting purpose, for example

<identifier scheme=

</entity>

</period>

</context>

contain at least one unit element with a measure element (when reporting numbers), for example

</unit>

have at least one reference to the reported item (properly formatted), for example, if we were tagging the line item for Current Accounts Payable

<us-gaap:AccountsPayableCurrent contextRef=”November-30-2008”unitRef=”USD” decimals=”-3”>50921000</us-gaap:AccountsPayableCurrent>

If you feel you want a little more about tagging read: Instance Document Anatomy.

Let’s test ourselves and see if we can pick out elements that White (2010) described for us. Go to Footlocker. com. Select XBRL Instance Document.

Did you see these rules being followed in the instance documents that you viewed above? When you go to the financial statement by selecting the SEC XBRL Viewer, do the elements of the financials seem to be following the specifications appearing in the tags?

How Does Software Work?

Software is essential in all of these steps. There are now many software providers in the game. Visit XBRL Vendors and Service Providers. Make note of their market users and their features. For example, are they modular packages that split viewing, tagging, validating, and publishing, or are there complete solutions? In addition here are 10 Questions When Reviewing XBRL Software.

To help us get a feel for what it is like to use such software, however, we’ll go Fujitsu site and watch some of their product demos. Visit Fujitsu XBRL Package Features. If you have time, watch all the demos, they are interesting and offer of review of what we’ve discussed. If your time is limited, watch Demos # 3&4.

Once a preparer completes the tagging of an XBRL instance document, he/she runs a validation check. Like tagging, this process is typically completed by using software that has validation functions. During the process, the preparer checks the document for

well-formatted XML
required XBRL elements
proper XBRL formatting and syntax
accurate linking of each schemaRef element to the taxonomy
accurate linking of other elements to the discoverable taxonomy set (DTS – other documents within the taxonomy).

Ready for some Individual Practice?

Complete these Exercises on your own in preparation for the XBRL Graded Assignment. The Self-Check Answers are provided in the XBRL Activity Area of the classroom.

Exercise 1

Go to
Select 4NET Software, Inc. from the left hand menu
Select Quarterly Report (2012-06-30)

Explore the information available in the viewer (do not access the Charts, they are temporarily down for maintenance). Locate the following information. You may insert screenshots for your responses.

a)What is the company’s CIK (SEC Central Index Key) number? and What is the company’s Ticker Symbol and fiscal yearend?

Exercise 2

Go to Footlocker. com. Under theSecond Quarter 2012 Form 10-Q - filed 9/05/12, select the SEC XBRL Viewer. Under the financial statements, select the Consolidated Balance Sheets. Locate the following information for elements on the statement. Insert a screenshot of the statement below.

Note: To create a screenshot, go to the screen that you want to capture, press Ctrl PrtScn. Go to the Word document where you want to insert your screen shot. Hit Ctrl V. Resize the image for the page. Or try JING, which is free capture software located at

a)For the accounts payable account, July 28, 2012, provide the following information from the XBRL tags. You may copy and paste your responses.

b) Looking at the Summary of Significant Accounting Policies (left-hand menu),identify the tags for “Recent Accounting Pronouncements”.

Conclusion

A first look at XBRL can be intimidating. I gave a presentation to one of the financial management organizations that I belong to and a Controller from a small firm asked, “what does this do for me?” I’m going to ask you to help with this question and show me how comfortable you are feeling with what you learned through the homework in the next section.

XBRL INDIVIDUAL GRADEDASSESSMENT

Your client, Shad Clothes, Inc., is now required to file XBRL data interactive financials with the SEC. Your firm has just begun to offer XBRL tagging and filing services and since you have most recently returned from an XBRL training seminar, you’ve been given the assignment! Complete the following two tasks in preparation for the project:

1)Write a short summary for your client about what XBRL is and the steps you will take to complete the mapping of their balance sheet and income statement. This should be less than three paragraphs.

2)Map the company’s balance sheet and income statement that appear in the attached spreadsheet. Use the link to the 2012 US GAAP Financial Reporting Taxonomy to view the taxonomy and retrieve the information you need to complete the mapping spreadsheet (you may cut and paste from the taxonomy to the spreadsheet). For this initial set of statements no extensions should be required.

Insert your response to #1 into your Excel workbook and upload the workbook (containing parts 1 & 2) to your Assignment Folder by the due date in the Course Calendar.

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