Perhaps you have been too busy living your life to have noticed that Augmented Reality (AR) is one of the next big things. Currently it’s technology associated with mobile phones or the future generation of geekware –  intelligent spectacles. Basically you point your phone camera or iSpecs at a real world object and through the magic of a local wireless Internet connection you see lots of information overlaid on the object that tells you more about it. So basically we have an object, say a tourist site in a big city, and a bunch of information that floats around it telling us more or inviting us to click on links to find out more.

Now imagine you see a brand logo out on your travels and you want a quick snapshot of financial information about that business. AR technology is capable of recognizing that logo (via back-end image matching) and so one of the ‘contexts’ or ‘layers’ you could chose to augment the reality of that logo is ‘financial’. And how that layer works is that it accesses publicly available XBRL filings to interrogate the data to present it back to you.

Now why anyone would want to do that is not clear to me yet. But if you wanted to you could. XBRL and augmented reality. You heard it here first.

According to Michelle, the biggest challenges from an IRO standpoint are:

Those are the kinds of questions analysts will start focusing on — e.g., “Your peers use this particular tag for ‘inventory’ — why don’t you?” Using a different tag is kind of a red flag. So IROs need to appreciate this analyst perspective, and start thinking what questions analysts and investors will be asking about how they’re using this.

I couldn’t agree with Michelle more. And, I like to share with you how the same beliefs have shaped how Rivet has designed our products and specific features in our Crossfire Reporting Platform.

Understand how your financial guys define your statements using XBRL tags, as well as how your industry or market peers and competitors do the same thing.

In both of our tagging products (Crossfire Preparer) and viewing/reviewing products (CrossView and Dragon View), we have provided the functionality for preparers and investors to easily understand what “tags” were selected (base or extended) and how comparable if the tags were base elements for both their market peers and the specific industry the company belong to.

CrossView -- Highlight the Extended Elements Used

Dragon View -- Shows the Usage Percent for All SEC Filers and Specific Industry

This is an opportunity. What can I do when this data starts coming through and is more readily available?

We asked the same question, believe it or not, in 2005. We saw the movement of XBRL not just in US but all over the world, and we asked, “What would investors need in order to realize the benefits of the interactive financial data can bring?” Crossfire Analyst was designed to address the need to intelligently and easily analyze the interactive data. Its remarkable support for interactive data enables users to easily analyze data from one or multiple XBRL sources such as the SEC (Corporate Financials and Mutual Fund Risk & Return) and FDIC Bank Call Data, and international sources such as filings from the Japanese and Shanghai stock exchanges.

Crossfire Analyst -- Create and Publish Benchmark Reports and KPIs

Crossfire Analyst -- Users can Easily Combine Interactive Data from Multiple Sources

At the end of the interview, the author asked Michelle “what do you love about your job?” And her response was “It’s working with passionate people who are excited about this. We’re doing something that makes a difference.” She is absolutely right, what’s not to love about that? Thanks, Michelle.

1. Understandability
2. Relevance
3. Reliability
4. Comparability

The XBRL community is somewhat energized about the real practical difficulties of ‘guaranteeing’ report data reliability and comparability given various taxonomy flavors, erroneous use of elements to tag report data by inexperienced filers and extension ‘creep’. And so they should be. Reliable and comparable data is supposed to be one of the key deliverables and benefits of XBRL taxonomy-based reporting. But here I want to focus a little more on ‘understandability’ and  ‘relevance’ as these are what tend to energize software developers – closely connected to industry terms such as ‘fit for purpose’ and ‘usability’ that businesses who buy software should care about.

Understandability is primarily driven by presentation. It’s hard to describe a stunning landscape in words and communicate the impact it had on you but it’s a lot easier to do by just showing someone a single photograph. So the way reports are presented and presentation of different perspectives of the same report data, preferably in-context and interactively via charts or drilldowns, facilitate deeper understanding of the numbers. Of course you can learn a lot from a ‘traditional’ report presented as a PDF – perhaps 80%+ of what you need to know. But it maybe that 10-20% of what you can’t ‘see’, without an interactive presentation, contains what you really should understand about the numbers.

A simple example of how interactive presentation helps understandability is by making it easy to confirm who a report relates to and what exactly a report line is actually presenting. Rivet CrossView does this using popups, as shown below:

Fig. 1: Report understandability

Relevance is partly driven by role and intention. Who are you and why are you here? For example: Are you an individual investor or a professional financial analyst? Are you thinking of buying or selling stock? What role and intention do is provide a frame for delivering relevant data. CrossView helps you manage a report to suit the role and intention by providing the means to chart and export the report or view the content of any report section you are interested in:

Fig 2: Report relevance

Role and intention-based report framing may require the presentation of financial statement formats that are non-standard, that mix and match elements from conventional statement formats, in order to create new perspectives. Something that taxonomy-based reporting has the potential to facilitate by using XBRL elements as building blocks, unlike traditional PDF or even spreadsheet-based reporting that depends on error-prone cut and pastes.

In September 2008, Rivet and Thomson Reuters began working on an XBRL-related project for the Reuters Fundamentals product. The project released earlier this month and the first stage of delivery, handling Japanese XBRL is now in production.

Reuters Fundamentals is created and maintained by an experienced data collection team that includes data on:

• Over 47,500 active companies, representing over 99% of world market capitalization
• Coverage of all constituents of all major indices
• Over 15,800 inactive companies
• 160+ exchanges in 107 countries
• 25 years of history for US companies, and 12 years for non-US companies

Some of the markets covered by Thomson Reuters have already adopted XBRL as the standard for financial reporting, and other markets are soon to follow. Thomson Reuters has an opportunity to streamline the data collection process with XBRL being center stage.

Rivet helps to build a bridge between traditional business intelligence and XBRL

During the process of creating a solution to assist Thomson Reuters, we have learned a great deal about how different each market could be in regards to the financial information. XBRL as a standard has provided a framework to enable financial transparency and financial data integrity, but to fully realize the benefits that XBRL can bring to the investors, software vendors and solution providers will continue to fine-tune the traditional processes already in place and invent new ways to best utilize XBRL.

With XBRL, financial data can be verified and validated before loading into any downstream systems for processing; the ‘quality’ of the information can certainly be highly enhanced. Also, the level of human resources previously required to get the data into loadable format is no longer necessary. I am not saying that all human interaction is eliminated, but with the incorporation of XBRL and automated, systematic processing, the human resources can be used to turn the data into valuable information. Delivering the financial information on a timely basis with lower costs and with greater accuracy is now an achievable goal.

Enhancing the Financial Information Ecosystem is “technically” simple

Thomson Reuters plays a very important role in the financial information ecosystem. Working with Rivet to add XBRL support to the complex information processing was not a huge “technical” challenge. Rivet brought to the table over 100,000 hours of collective XBRL experience and wealth of products/tools for supporting XBRL parsing, rendering. Under Thomson Reuters superb guidance, the project has moved from a conceptual model to a web-delivered solution in a short period of time. Since the first few markets the application supports are non-US, the project also gave Rivet a wider exposure to how XBRL was implemented in various global markets.

It was a valuable and enjoyable project for Rivet. Collaboration was formed and strengthened with each party walking away with a better understanding of how XBRL can be best used to benefit the investors.

The point is you have to start somewhere, and that’s where we are. One of the benefits that will be driven by the data is an SEC that is enabled to more efficiently target both analysis and enforcement efforts.

At some point, we will all benefit from the data that is being submitted to the SEC via the wisdom of crowds in evaluating corporate performance. And, XBRL will be the underlying technology that enables the army of analysts to act fast.

Using this data should be easy for everyone who speaks the language, and this goes beyond the technical nuances of XBRL and extends into the universal language of business and financial data.

Until XBRL becomes more pervasive as an enabler in multiple business processes, corporate filers should rightly focus on how their data is filed with the SEC and how their financials will be viewed and perceived by a wider audience than ever before. The long range benefits of XBRL to the company, regulators, and investors will be realized in time as the volume of filings reaches critical mass.

It is incumbent on the filer to know about the XBRL presentation decisions they make (or have others make for them). The best way to do this is to easily review the filing for the how, what, and why.  Rivet Software’s Dragon View and similar applications will help organizations review exactly what will be filed with the SEC (no matter how or by whom that filing was prepared). When the data will be analyzed by others (and it will), filers will want to ensure they:

1. Review the XBRL properties associated with the financials.
2. Know exactly what investors and others see when they look at the financials on the SEC site (and other organizations who use the data filed at the SEC site).
3. Benchmark XBRL definitions, descriptions and extensions against those used by other filers.
4. Make XBRL financials available on their corporate web site, as required by the SEC. They can go  a step farther and include a viewable set of the XBRL financials on their site to ensure the presentation is consistent with the filer standards.

I’ll have to admit I have learned more about XBRL by viewing and reviewing some of the filings than I did by exploring how to tag financials – it is much easier to understand how to get there when looking at a map. XBRL is so promising because you can see the same elements being used in multiple filings, and see where a filer decided they needed to extend.

Rivet can help – apply to become part of the Dragon View beta program.  Check out the online demonstration of Dragon View.  Also, you can sign up for a 30 minute webinar on Dragon View.

I said that – like many people – although I appreciate learning how wine is crafted, I don’t care much about the molecular structure. In the end, what I wanted was to enjoy the wine with my meal.

Similarly, XBRL as a technology will enable a number of process transformations, but each of those will be front-ended by purpose-built software; the technical aspects of XBRL are certainly interesting, but only for the right audience.  End users will enjoy these benefits relative to the ease of using data within the context of their own work.

Rivet Software is focused on building applications and functionality with end users in mind so that they can realize the benefits of XBRL even if they do not have specialized technical knowledge.

Does the focus on finance and accounting professionals mean that Rivet can’t help other software vendors deliver XBRL-enabled solutions?  No.  Rivet functionality is embedded in multiple solutions.  But more on this in a later post…

On the XBRL.US website there is an “At a Glance” page which describes XBRL, the primary benefits and – just as important – what XBRL is not, as shown below:

End users are in the business of creating, reviewing and analyzing data in context and shouldn’t have to be experts in the underlying technologies. To achieve the primary benefits, XBRL data has to be approachable through applications that mask the complexity of the technology, and expose data that is helpful in making decisions.

Rivet delivers solutions that span the entire process so that end users can create, review, and analyze data leveraging XBRL. In each case, the end user’s approach to the work is paramount.

Here are a few examples of the attention to detail that makes our applications more approachable by end users.

1. Analyze – Extend Excel and Model with Data: All of the XBRL filing data at the SEC is accessible for analysis in Crossfire.  Rivet has enhanced the Excel experience for analysis by automatically including public data and managing spreadsheet hell.  In Crossfire, you have access to all the XBRL filings to date. You drag and drop data onto Excel; the design mode is interactive. Because you do this in the context of the application, you can mix and match internal data and data from public filings, while you manage both financial spreadsheets and updates when new data is filed. Modeling with data is important. When building from scratch, it is much easier for a user to eliminate data (as they refine what they want to know) than to add items. Access to the entire dataset makes it easier to model with data directly in Excel.
2. Review – Easily benchmark your choices against other filings: One of the questions we often get is “What did other filers select in this case?” With Dragon View and Cross Tag that information is immediately available. With Dragon View you can open any instance document including those done by your outsourced vendor. You can read more about this in Emily’s blog entry here.
3. Create – Streamline the process after the initial filing: We have spent time automating the process of producing your 2nd, 3rd and “Nth” instances based on your first filing, regardless of the method you used to produce it.  (Look for a blog on the importance of this in the near future.) Above are just a few examples, but there are many more good examples around workflow, roles, “help me tag”, and other topics on our blog.

In the U.S., understandably, the primary focus is on filing so let’s start here but not stop here…

Whether you use Rivet applications or Rivet functionality embedded within other applications, we are focused on helping end users by leveraging standards and providing access to the vast amount of information that will be available. Providing functionality for the end user now will drive additional uses of XBRL that will realize the primary benefits of XBRL in both the private and public sector.

Now, where is my wine…

Links list:

XBRL at a Glance
http://xbrl.us/Learn/Pages/FactSheet.aspx

Learning About XBRL & Rivet Solutions
http://rivetsoftware.com/Solutions/sec_filers.aspx

SEC Quick Start Premier Plus Package

http://www.rivetsoftware.com/Professional_Services/sec_xbrl_package.aspx

Manage the tagging and filing process with CrossTag User Roles and Workflow
http://blog.rivetsoftware.com/?p=195

Dragon View, Still the most popular XBRL viewer, Just Better!
http://blog.rivetsoftware.com/?p=150

Tag it Your Way!

http://blog.rivetsoftware.com/?p=182