IFRS Reporting in the format of XBRL

Transcription

1 IFRS Reporting in the format of XBRL Accounting Community of Ukraine in the face of European Challenges Michal Piechocki Kiev 17 December 2014

2 About your speaker Director XBRL International Board of Directors Member XBRL International Member Assembly Member IFRS Taxonomy Consultative Group at IASB Member Institute of Management Accountants XBRL Committee Co-author Leveraging XBRL for Value in Organizations (IFAC & ISACA) Co-author XBRL for Interactive Data: Engineering Instructor XBRL International Taxonomy Development Training CEO Business Reporting Advisory Group Past: Member IFRS Quality Review Team Subject Matter Expert XBRL International Certification Board Member IBM Information Governance Council Member At Large XBRL International Steering Committee Chair XBRL International Certification Committee Member IASCF XBRL Team (IASB)

3 Speaking different languages globally... CRA Analyst US GAAP English Spreadsheets Interested in profits Investor IFRS French Document Interested in CSR SC IFRS Ukrainian / English? Owner IFRS Polish Interested in Integrated reporting Owner Ukrainian Interested in ecological impacts Business partner CAS Chinese Proprietary format Owner Portuguese Interested in sustainable value creation Subsidiary AU IFRS English XBRL

4 Processing different formats internally 7 STANDARD!!! 4 Definition of exchanged data and automatic extraction Validation for correctness and completeness Associated dictionary allowing to describe the exchanged data and customizing it for a certain scenario of usage Validation for correctness and completeness 4 Definition of exchanged data and automatic consumption Electronic transfer 2 2 Electronic transfer Business operations Preview for signoff Electronic format reflecting all characteristics of the kind of exchanged Preview for revision Analysis and decision making

5 Comparing IFRS financial data Disclosure of hedge accounting data for IFRS based financial reports of 3 LSE listed banks (FTSE 100) Disagregation of Derivatives into: Held for trading, Economic hedge and Hedge accounting differs accross reports: Part of derivatives can be reported under Financial assets held for trading, the rest under Hedge accounting All derivatives can be reported as aggregated value later disaggregated into Derivatives held for trading and Hedge accounting Lloyd s Banking Group Not on the face of PFS (only derivatives) but in note AR 292p. HSBC Not on the face of PFS (only derivatives) but in note AR 390p. Barclays Not on the face of PFS (only derivatives) but in note AR 285 p.

6 Need for common language and standard Accounting and auditing require standards for content and processes: Local GAAP / IFRS / PAIB Guidelines / Ethics / Auditing and Assurance IFAC Standards but also for electronic format of disclosures: extensible Business Reporting Language

7 What is? a flexible framework: allows for customization and application in different reporting scenarios independent from legal regulations designed for description and exchange of business related data (includes all required characteristics and functionalities for this application) informative reporting: exchange of aggregated data for analysis and decision making communication (encoding and decoding) of information: sentences build according to certain syntax (grammar) and semantics (meaning)

8 Why XBRL? International, open, free standard, based on XML Developed by global, open XBRL International consortium (You are welcome to join!) National University of Singapore Does XBRL Adoption Reduce the Cost of Equity Capital by Oliver Zhen Li, Yupeng Lin, Chenkai Ni, August 2012

9 IFAC & ISACA on XBRL Leveraging XBRL for Value in Organisations Joint paper between IFAC and ISACA Combines accounting (financial reporting) and IT knowledge Outlines possible use of XBRL by organisations: external (compliance), internal reporting internal control, auditing and assurance

10 XBRL taxonomy and report XBRL dictionary (IFRS XBRL taxonomy) XBRL taxonomy (metadata) business concepts, names & identificators multilingual labels references to legal acts and standards hierarchies business rules & calculations business breakdowns & characteristics business attributes relationships between concepts XBRL report (IFRS XBRL instance document) ABC Company All values in EUR Consolidated statement of financial position Year End 2010 Other financial assets 234,52 XBRL instance document (data) facts and footnotes contextual information units, precision ITI screenshot courtesy of IFRS Foundation XBRL Team IFRS Foundation

11 Tagging data with IFRS Taxonomy + + <ifrs:revenue unitref="eur" decimals="0" contextref="e-3-1"> </ifrs:revenue> <ifrs:revenue decimals="0" unitref="eur" contextref="e-0-1"> </ifrs:revenue> <ifrs:costofsales unitref="eur" decimals="0" contextref="e-3-2"> </ifrs:costofsales> <ifrs:costofsales unitref="eur" decimals="0" contextref="e-0-4"> </ifrs:costofsales>

12 Sample IFRS XBRL (Inline XBRL) Report

13 The same sample report in XBRL code

14 Major XBRL projects

15 Scenarios for XBRL adoption Benefits Challenges 1. Receiver provides XBRL enabled excel, word, PDF templates Portal no implementation costs need for manual work (rekeying data) error prone no benefit outside of this particular reporting context 2. Outsourcing (printer, consultant, vendor to prepare reports ) Portal comprehensive support low risk no knowledge required lack or control possibly high cost lack of internal capabilities 3. Bolt-on (tools to transform your reports into XBRL at the last stage ) ERP REPORT WRITER Portal simplified approach potential cost-saving control over result knowledge required time risk significant effort for change update 4. Integrate (build XBRL into company s business reporting supply chain) ERP Portal comprehensive approach cost-saving (mid-long) control over result automated processing enhanced reporting high data quality upfront investment level of complication

16 Subsidiar y A Beyond compliance: XBRL and financial statements consolidation Consolidated report Subsidiar y B Consolidation adjustments Subsidiar y C Subsidiar y D

17 Beyond compliance: XBRL consolidation example Parent company ifrs_dividendspaid Consolidated and separate financial statements [axis] Solo member Extension taxonomy for consolidation purposes Adjustment calculation using conversion/mapping tool ifrs_dividendspaid Hypercube Consolidation Axis Dividends Adjustment Member Dividends Paid Adjusted 1. Consolidation adjustments defined by extension taxonomy (intra-group transactions, dividends paid within group etc.) 2. XBRL dimensions distinguish between single subsidiaries reports and parent company report ifrs_dividendspaid Consolidated and separate financial statements [axis] Consolidated member

18 Beyond compliance: XBRL and internal audit/control (XBRL Global Ledger) MFRS / PERS X V + XBRL GL journal entry 1 Advanced business mathematical and logical controls + - XBRL GL journal entry 2 XBRL GL journal entry 3 Global Ledger

19 Overview: XBRL & external reporting Corporate actions Banking Insurance GRI, WICI, ESG, IRIS Islamic finance and banking Financial and capital market Pension funds Social responsibity Microfinance Investment firms Integrated reporting Nonfinancial and other Governance, risk, compliance Securities Intellectual capital Environmental IFRS, Basel II/III, Solvency II, CA, Local GAAP...

20 Resources

21 Thank you Michal Piechocki