Researching the 10K

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Researching the 10K
Interactive Data The Revolution in Business
Reporting 14th XBRL International Conference,
Philadelphia, PA December 4 December 6, 2006

• A market driven process to extend a conceptual
  framework.
• http//www.ebr360.org

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Understanding the 10K

• The predominant focus for XBRL is currently on
  financial data
• Taxonomies could be developed for information
  disclosed in other documents
• MDA
• 10K
• These documents contain a great deal of
  information which is hard to analyze
• Documents are long
• Much of the information is in narrative form
• An XBRL taxonomy would open up a new research
  agenda

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The Need for Enhanced Business Reporting
Business Reporting A Changing Dynamic
Historical Financial Statements
Enhanced Business Reporting

• Lagging indicators
• One size fits all (GAAP)
• Ignores non-financial measures
• Reports results of past decisions
• Periodic
• Historical
• Cost-basis
• Financial only
• Statements
• Backward-looking

• Leading indicators
• Tied to mission, vision and values
• Tied to factors critical to success
• Moves decision criteria to forefront
• On-demand
• Real-time/future
• Value-basis
• Comprehensive
• Custom reports
• Forward-looking

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What is Enhanced Business Reporting?
Value Creation
Value Preservation
Value Realization
InvestmentCommunity
Companies
A Better Managed Company
Companies create sustainable economic value by
developing, operationalizing and executing
superior strategies which guide the company
towards delivering valuable products and
services. These strategies yield future cash
flows greater than investment or economic profit.
Companies ensure that investors realize the
value created by the business units and the
corporate center by managing and delivering upon
market expectations.
Companies preserve the value of the underlying
business unit cash flows through effective
management controls, risk and tax management.
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What is Enhanced Business Reporting?

• Providing shareholders and other stakeholders the
  information they need to make decisions
• Financial and nonfinancial value drivers
• Tangible and intangible assets
• Integrated management and reporting of risk and
  value
• Voluntary transparency beyond regulatory
  reporting requirements
• To the extent this information is provided it
  lies outside the financial statements
• MDA
• 10K

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EBR Framework Version 2.0

• A. Business Landscape
• B. Corporate Strategy
• C. Resources and Processes
• D. Performance

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EBR Framework Version 2.0
Business Landscape
A.1. Business Landscape - Summary
A.2. Economic
A.3. Industry Analysis
A.4. Technological Trends
A.5. Political
A.6. Legal
A.7. Environmental
A.8. Social
Source 2001 MORI PricewaterhouseCoopers Pharma
Survey
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EBR Framework Version 2.0
Corporate Strategy
B.1. Corporate Strategy - Summary
B.2. Vision and Mission
B.3. Strengths
B.4. Weaknesses
B.5. Opportunities
B.6. Threats
B.7. Goals Objectives
B.8. Business Unit Strategies
B.9. Business Portfolio
Source 2001 MORI PricewaterhouseCoopers Pharma
Survey
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EBR Framework Version 2.0
Resources and Processes
C.1. Resources and Processes - Summary
C.2. Resource Form
C.3. Key Processes
Source 2001 MORI PricewaterhouseCoopers Pharma
Survey
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Comparative Analysis of 10Ks
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A Sample of Simple Questions

• What is the distribution of disclosures?
• Within an industry
• Across industries
• What are areas of high and low disclosure?
• How similar and different are specific
  disclosures?
• What key performance indicators (KPIs) are being
  disclosed?
• Which KPIs are most amenable to standards?
• Are there best practices in disclosure?