Consolidation and Entity Mapping: New XBRL Solutions

1
Consolidation and Entity Mapping New XBRL
Solutions

• David vun Kannon
• KPMG LLP

2
The Internal Reporting Challenge

• Reporting starts at the transactional level
• Many non-financial measures to be reported
• Financial consolidation is known to be
• Time consuming
• Error prone
• Not well automated
• Costly

3
Consolidation, the textbook way

• Algebraic addition across a worksheet

Entity 1
Entity 2
Eliminations
Consolidated Entity
-


4
Consolidation, the XBRL way

• Algebraic addition via calculation linkbase

Instance Document Entity 1 Data Entity 1
Context Entity 2 Data Entity 2
Context Eliminations Data Eliminations Context
Entity Map (Taxonomy)
Instance document
Entity Schema Entity 1 Entity 2 EliminationsE1E2
ConsolidatedEntity
Consolidated Data Consolidated Context
XBRL Processor

Con
-


E1
Elim
E2
5
What are Entity Maps???

• Using the established technology of taxonomies
• Schema
• Linkbases
• Applied to a different dimension
• The Entity dimension
• Not the Concept dimension

6
The Concept Dimension?

• Facts (items in an XBRL instance) have
• Dimensions (with examples)
• Concept Current Assets
• Entity White Satin plc
• Period - 20021231
• Scenario - Actual
• Unit US Dollars
• Attributes (with examples)
• Precision or Decimal - 18

7
Documenting a Dimension

• What names exist in a dimension?
• Assets, Liabilities, Equity, etc.
• How are they related to one another?
• XBRL can document multiple relationships.
• How do they relate to other objects?
• Especially real-world objects.

8
Dimension Documentation in XBRL

• Names are defined using XML Schema files.
• Linkbases define
• Inter-relationships
• Definition, calculation, presentation
• Resource relationships
• Label, reference

9
XBRL 2.1

• The Concept dimension is defined by the DTS
  (Discoverable Taxonomy Set).
• Each instance document has its own construction
  of the Concept dimension.

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Important Point!

• The taxonomy (schema linkbase) technology,
  which was originally developed in XBRL to
  document the Concept dimension, can be used to
  document ANY XBRL dimension.
• Using appropriate new roles and arcroles, etc.
• Thank you, Walter Hamscher!

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Entity Schemas

• As in Concept Schema, define names, IDs and other
  attributes using XML Schema.
• ltelement
• nameentity1
• identity1
• typenewentityType
• /gt

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xbrlDimension attribute

• To distinguish a schema of concept elements from
  a schema of entity elements, we propose a new
  attribute.
• ltschema newxbrlDimensionentity gt
• Value could be concept, entity, unit, scenario,
  maybe even period.
• NB attribute is on the schema, not each element
• (could also appear on linkbaseRef)

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But entity in context is different!

• We need to relate these abstract entity elements
  with the entity part of a context.
• In an instance document, the entity part of the
  context uses real-world identifiers, such as DUNS
  number, ticker symbol, CIK.
• Use a resource-type (label, reference) linkbase
  to make the association between abstract elements
  and real world identifiers.

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Worked Example

• Next slide shows a small but complete Identity
  linkbase.
• One abstract element is linked to two real world
  identifiers
• D-U-N-S number
• CIK (Central Index Key) used by SEC.

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ltreferenceLink xlinktype"extended"
xlinkrole"http//www.kpmg.com/identity"gt lt!--
references goes here. --gt ltreference
xlinktype"resource" xlinkrole"http//www.kpmg.
com/entity" xlinklabel"DUNS"gt ltxbrlientity
scheme"http//www.dnb.com/D-U-N-S"gt ltidentifie
rgt123456789lt/identifiergt lt/xbrlientitygt lt/refer
encegt ltreference xlinktype"resource"
xlinkrole"http//www.kpmg.com/entity"
xlinklabel"CIK"gt ltxbrlientity
scheme"http//www.sec.gov/CIK"gt ltidentifiergt66
43567lt/identifiergt lt/xbrlientitygt
lt/referencegt lt!-- locator goes here. --gt ltloc
xlinktype"locator" xlinkhref"WhiteSatin.xsdpa
rent" xlinklabel"parent"/gt lt!-- arc goes here.
--gt ltreferenceArc xlinktype"arc"
xlinkfrom"parent" xlinkto"DUNS"
xlinkarcrole"http//www.kpmg.com/arc/element-ide
ntity"/gt ltreferenceArc xlinktype"arc"
xlinkfrom"parent" xlinkto"CIK"
xlinkarcrole"http//www.kpmg.com/arc/element-ide
ntity"/gt lt/referenceLinkgt
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In Detail (1)

• ltreferenceLink
• xlinktype"extended
• xlinkrole"http//www.kpmg.com/identity"gt
• A standard XBRL reference link.
• A new role
• http//www.kpmg.com/identity

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In Detail (2)

• ltreference xlinktype"resource"
  xlinkrole"http//www.kpmg.com/entity"
  xlinklabel"DUNS"gt
• A standard XBRL reference resource
• A new role
• http//www.kpmg.com/entity
• Bending the rules of reference resources a little
  bit

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In Detail (3)

• ltreferenceArc xlinktype"arc" xlinkfrom"parent"
  xlinkto"DUNS" xlinkarcrole
• http//www.kpmg.com/arc/element-identity
• /gt
• A standard XBRL reference arc
• A new arcrole
• http//www.kpmg.com/arc/element-identity

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Benefits of Identity Linkbase

• Enables many-to-one mapping of various real world
  identifiers to a single abstract identifier.
• All other linkbases only need to point to the
  abstract element, greatly simplifying
  construction and maintenance.
• Some entities (such as Eliminations) may not have
  any real world identifier, but are still very
  useful for other purposes.
• Created by an entity mainly for internal use.

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Entity Calculation Linkbase

• Use CL exactly the same as CL for Concepts!
• Defines which values to aggregate
• Relates the abstract entities to each other
• Subsidiary entities have weight1
• Correspond to real world business units
• Elimination entity has weight-1
• Virtual unit created to avoid double counting

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Other Entity Linkbases

• Document various relationships that entities can
  have with other entities.
• Legal ownership
• Management control
• Org chart
• Use definition linkbase with appropriate roles
  and arcroles.
• Presentation linkbase will also be useful.
• Can even cross dimensions!

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Use of standard XBRL ideas

• Resource-type linkbases relate objects (chunks of
  metadata) to abstract elements
• NB Dont try to store instance data in a
  resource linkbase!
• Relation-type linkbases relate abstract elements
  to each other.
• Everything we have learned in the Concept
  dimension can be leveraged in the Entity
  dimension.
• And we can always learn new tricks also!

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How to use the CL?

• We want to do more with the CL than just create
  documentation.
• It can drive consolidation processing.
• But current CL processing only works on the
  Concept dimension, which has a special place in
  the instance.

XBRL Processor
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XBRL 1.0

• Item has several dimensions
• Concept
• Entity
• Unit
• Period
• ltitem typeuscurrentAssets gt
• All dimensions were represented in the same way

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XBRL 2.x

• Item has the same dimensions BUT
• ltuscurrentAssets gt
• The concept dimension has a special place.

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One approach

• Reuse a Concept dimension CL processor
• Ensure periods are aligned.
• And other sanity checks
• Map entities to abstract entities.
• Pivot the instance document to exchange the
  Concept and Entity dimensions.
• Process as previously.
• Pivot back to obtain the final instance document.
• Remap to a real world identifier.

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Pivot???

• 2 entities, 5 concepts 10 facts
• ltmyconcept1 contextentity1 gt
• Becomes
• lttheentity1 contextconcept1 gt
• Now 5 contexts, before there were two.

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Suggestion

• If you dont have a working CL processor, treat
  the preceding slides as a nasty hack, rather than
  a preferred implementation strategy.
• As a result of the pivoting (and the mapping) the
  document is no longer a valid XBRL 2.1 instance,
  but a CL processor should still be able to use
  it.
• The XBRL Infoset is still the same
• The final instance IS VALID XBRL!!!

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Consolidation in XBRL

• Incrementally extend and leverage standard XBRL
  taxonomy ideas for entity maps.
• Use standard XBRL instance documents that many
  systems will be able to export.
• Consolidation process is now
• Automatic
• Under control of metadata
• Much easier to document/audit!

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Still to come

• Creating the Eliminations entity data
• Show that XBRL GL journals can be summarized into
  the trial balance and filtered to produce the
  eliminations.
• Non-additive measures
• We need a Formula Linkbase to create these.

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Still to come

• If we can do
• Parent
• North
• South
• East
• West
• - Eliminations

• Then we should be able to do
• FY-03
• FQ1
• FQ2
• FQ3
• FQ4
• - Adjustments

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Still to come

• If we can do
• Parent
• North
• South
• East
• West
• - Eliminations

• Then we should be able to do
• Variance
• Budgeted
• - Actual

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Thank you!

• David vun Kannon
• Senior Manager,
• KPMG LLP
• dvunkannon_at_kpmg.com