XBRL Application in China: Listed Companies Information Disclosure Using XBRL

1
XBRL Application in China Listed Companies
Information Disclosure Using XBRL

• MA Donghao
• Assistant Chief Executive Officer
• Shenzhen Stock Exchange

2
Agenda

• Market at a Glance
• Information Disclosure current practice
• The Problems
• Project Summary
• Objectives
• Taxonomies Framework
• Implementation approaches
• The Benefits
• Future development

3
Market at a glance

• Two national stock exchanges in China Shenzhen
  and Shanghai.
• Listed securities 543_at_Shenzhen,
  828_at_Shanghai
• Cash market only, products common stock ,
  treasury bills, bond and funds.
• Market Regulator CSRC.

4
Mandatory information disclosures

• Prospectus
• Offering circular
• Periodic reports
• Annual Report, Half-year Report and Quarterly
  Report
• Timely reports
• Notice on material issues,
• Notice on MA,
• Notice on clarification, etc.
• Medias of disclosure 4 appointed newspapers and
  2 appointed websites

5
Disclosure process
6
Disclosure process periodic reports

• Filing
• Shenzhen
• E-Filing software-gtstructured data
• Report in PDF (prepared manually)
• Shanghai Report only in PDF (prepared manually)
• Registration computer-assisted
• Announcement
• Newspaper paper-based document exchange
• Website Summary in HTML, full-text in PDF

7
Disclosure process timely reports

• Filing
• Fax to Company Management Department of the
  Exchange
• Approval
• Paper-based, feedback by fax
• Check for conformity to CSRC/ Exchange rules,
  procedural correctness, consistency.
• Announcement paper-based exchange of report
• Newspaper
• Websites

8
Disclosure reporting supply chain

• Listed companies
• CSRC
• The Exchanges
• Appointed papers, websites
• Information vendors
• Software vendors
• Investors

9
The Problems

• Low data quality
• Inconsistency
• High market cost

10
Project Summary

• Initiated by the CSRC, with active support from
  both exchanges.
• Using XBRL for information disclosure, with
  periodic report as a start.
• Developed as a national standard, currently
  released for public comment, scheduled to be
  released officially at the end of 2003
• Pilot deployment early 2004 for quarterly report

11
Objectives

• An extensible standard framework
• An open standard
• Better disclosure data quality

12
Information disclosure taxonomy features

• Based on XBRL 2.0 Specifications.
• Built for current CSRC disclosure requirements,
  but with provision for future development
• Developed our own PFS
• Not yet extend from Core IAS Taxonomy

13
Taxonomy features continued

• Periodic report first
• Form-based approach
• Item names in Chinese

14
Framework
15
Implementation approaches

• Minimal impact to current infrastructure
• Implement XBRL for periodic/timely reporting
  filing
• Upgrade companies filing software
• Publish XBRL instance document
• Integrate back end accounting systems and/or
  regulatory packages with XBRL

16
Disclosure process using XBRL
17
The Benefits

• Market transparency
• Better quality vs. lower price
• Flexibility to changes in disclosure rules

18
The Benefits

• The Exchanges
• Information vendors
• All stakeholders
• Listed companies

19
Open issues

• XBRL applicability with non-financial report
• Inadequate domain experts involvement
• Lack of experienced XBRL experts
• No public forum

20

• dhma_at_sse.org.cn