XBRL

1 WHITE PAPERU nderstanding the XML Standard for Business Reporting and FinanceXBRL3 xbrl : Understanding the XML standard Executive Summary4 What is xbrl ?5 Who benefits?5 What xbrl is NOT6 What kinds of issues does xbrl seek to resolve?6 What Needs to Be In Place?7 Uses and Applications8 Case Studies8 Credit risk management8 Internal and external reporting8 Business intelligence (BI) 9 Portfolio support and market data providers9 Transaction Cost Analysis (TCA)9 Software and financial Industry LeadersXBRL Technology Overview10 Software AG s Role12 Conclusion13 Resource Recommendations for Further Inquiry13 Software AGDecember 2002 CONTENTSP artner to Deliver xbrl Solutions10for Business Reporting4 xbrl .

2 Understanding theXML Standard forBusiness Reportingand FinanceThis white paper provides anoverview of the benefits and uses ofthe new XML standard for businessreporting, eXtensible BusinessReporting Language ( xbrl ). It alsooffers a more detailed review of theimplementation and technologyissues that need to be consideredwhen structuring an xbrl strategyas well as case studies for material discussed will be ofparticular interest to investment andfinance industry professionals; gov-ernment, trade and regulatory pro-fessionals; finance specialists in cor-porations; IT directors and SummaryWithout a standard for exchangingdata, the financial community hasbeen consistently frustrated by inef-ficient reporting processes.

3 Cur-rently, financial data is passedaround in a variety of non-inter-changeable formats HTML,Microsoft Excel documents, textfiles, and Adobe Acrobat files. Whileuseful for editing, these formatsoffer no advantage over paper pho-tocopies when it comes to sharingdata between applications and userson different computing far, attempts at integrating datafor financial and business reportingapplications have proven , 56% of integration per-formed in the banking industry hasbeen accomplished by hard codingor changing actual applicationsrather than abiding by existing stan-dards.

4 Those efforts have tripled thetotal cost of ownership for financialsoftware is a widely accepted data stan-dard that solves this dilemma andenables the exchange of uniformfinancial information between com-puter systems, software applicationsand people. It is based on XML(eXtensible Markup Language) andis supported worldwide by mostmajor accounting firms, trade organ-izations, software vendors, financialinstitutions, investors and govern-ments. xbrl "tags data with standardizeddescriptions that enable other appli-cations to understand the meaningand context of specific informationwithin financial documents.

5 Theresult is that data is entered cleanlyonce and then understood consis-tently and accurately is no need to re-key informa-tion or make guesses as to what aspecific number might sounds simple, but it represents aquantum leap for financial applica-tions and the people who use technology is ideal for Web-enabled applications and everyonewho gathers financial informationover the , banks, investment firms,credit companies and such regula-tory bodies as governments andtrade associations have the most togain from adopting xbrl . However,any organization with financialreporting responsibilities can benefitimmensely from xbrl .

6 Specific casestudies that address xbrl usage forcredit risk management, internal andexternal reporting, portfolio supportand market data providers, businessintelligence tools, and TransactionCost Analysis (TCA) are included inthe latter portion of this white though xbrl is in the earlyphases of adoption, the competitiveadvantages that come with estab-lishing xbrl and XML capabilitiesare clear. The world s leading gov-ernments, financial institutions,accounting firms and corporationsare already leveraging the standardto gain impressive returns on invest-ment with both internal and InputStorageAnalyst,ConsultantClientCent ral StorageTraditional: A lot of manual workWith xbrl : Properly defined and ready for business automationXBRLF inancialDataAnalyst,Consultant, ControllerFig.

7 1: The financial Reporting should also be noted that the pastdecade has seen a significant trendtoward sophisticated businessreporting. Large- , medium- andsmall-sized companies and organiza-tions have been able to take advan-tage of low-cost computing powerand software to track and analyze allkinds of business activity. Compa-nies everywhere are beginning tounderstand in great detail how HR,marketing, knowledge-managementsystems, R&D, organizational struc-tures and information architecturesaffect their business. Numerous soft-ware packages allow organizationsto analyze every facet of businessoperations and their impacts onfinance.

8 So, while this white paper is prima-rily focused on xbrl , it is importantto keep the larger XML perspectivein mind and understand that manyapplications will be using xbrl -enabled finance applications totranslate indirect costs and value tothe bottom line. What is xbrl ? xbrl is a data description languagethat enables the exchange of under-standable, uniform business infor-mation. It is based on XML and per-mits the automatic exchange andreliable extraction of financial infor-mation across all software formatsand technologies, including theInternet (Fig. 2). xbrl allows organizations to struc-ture information with tags.

9 Forexample, when a piece of data istagged as revenue, then xbrl -enabled applications know that itadheres to a strict definition of rev-enue and can use it accordingly. Theintegrity of the information isensured by standards that havealready been widely accepted. Inaddition, xbrl provides broadercontextual information about spe-cific data content within financialdocuments. For example, when aparticular sum of money is specifiedwithin a report, xbrl tags may iden-tify that data as "cash or "accountsreceivable. It can also indicatetimeframes for particular pieces ofinformation, like year-to-date xbrl , an organization, an indi-vidual or another software applica-tion can easily generate various out-put formats and reports based on asingle set of benefits?

10 xbrl benefits all users of the finan-cial information supply chain: publicand private companies, the account-ing profession, governments, regu-lators, analysts, the investment com-munity, capital markets and lenders,as well as key third parties such assoftware developers and data Benefits Creates more confidence in datathrough limiting the risk of erro-neous data entry since allreports are automatically gener-ated from one single informa-tion source Minimizes costs by allowing eas-ier, more automatic compositionand processing of reports to dif-ferent clients BusinessOperationsInternalFinancialRepor tingExternalFinancialReportingInvestment and LendingAnaysisCompaniesFinancialPublishe rand DataAggregatorsInvestorsTradingPartnersM anagementAccountantsAuditorsRegulatorsSo ftware VendorsXBRL for BusinessEvent ReportingXBRL for AuditSchedulesXBRL forTax FilingsProcessesParticipantsXBRL for G/L JournalEntry ReportingXBRL for FinancialStatementsXBRL for RegulatoryFilingsXBRL Working Model.