Building with XML : Building with XML Walter Hamscher
PricewaterhouseCoopers Global Technology Centre
walter.hamscher@us.pwcglobal.com
Perspective: Who we are : Perspective: Who we are 150,000 people worldwide
Accounting, Tax, Legal, Management Consulting, Systems Integration, Corporate Finance, Security, Human Resources, Outsourcing...
Global Technology Centre in Menlo Park, CA: Technology forecasting, analysis, strategy, for both internal and external clients.
Perspective: What XML Means to Us : Perspective: What XML Means to Us As producers and users of documents: becoming key to our internal knowledge management technology infrastructure.
As systems integrators: becoming key to integrating our clients’ applications both within enterprises and across the Internet.
Emerging XML-based standards are (literally) central to e-Business. Examples:
FpML, OAGIS, BizTalk for Energy, XFRML
The XFRML Project (XML-Based Financial Reporting Markup Language) : The XFRML Project (XML-Based Financial Reporting Markup Language) What it is
Why it is important
Who should care
How it works
When it will emerge An AICPA sponsored open spec for financial reporting
Transparency and usability of financial data on the web
Financial report creators, users, auditors, and software vendors
Core specification + Modules for document and reporting types
Version 1.0 - March 2000
Big Picture: The Financial Information Chain : Operational Data Stores Big Picture: The Financial Information Chain What it is
Fragment of a financial report : Fragment of a financial report -------------------------------------------------------------------------------------------------------------
Year Ended June 30 1996 1997 1998
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Revenue $8,671 $11,358 $14,484
Operating expenses:
Cost of revenue 1,188 1,085 1,197
Research and development 1,432 1,925 2,502
Acquired in-process technology -- -- 296
Sales and marketing 2,657 2,856 3,412
General and administrative 316 362 433
Other expenses 19 259 230
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Total operating expenses 5,612 6,487 8,070
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Operating income 3,059 4,871 6,414
Interest income 320 443 703
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Income before income taxes 3,379 5,314 7,117
Provision for income taxes 1,184 1,860 2,627
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Net income 2,195 3,454 4,490
Preferred stock dividends -- 15 28
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Net income available for common shareholders $2,195 $ 3,439 $ 4,462
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Earnings per share (1):
Basic $ 0.93 $ 1.44 $ 1.83
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Diluted $ 0.86 $ 1.32 $ 1.67
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(1) Earnings per share have been restated to reflect a two-for-one stock split
in February 1998.
See accompanying notes. What it is
Another fragment of a financial report : Another fragment of a financial report NOTES TO FINANCIAL STATEMENTSACCOUNTING POLICIES
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PRINCIPLES OF CONSOLIDATION. The financial statements include the accounts of
Microsoft and its subsidiaries. Significant inter-company transactions and
balances have been eliminated. Investments in 50% owned joint ventures are
accounted for using the equity method; the Company's share of joint ventures’
activities is reflected in other expenses.
ESTIMATES AND ASSUMPTIONS. Preparing financial statements requires management
to make estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue, and expenses. Examples include provisions for returns and
bad debts and the length of product life cycles and buildings' lives. Actual
results may differ from these estimates.
FOREIGN CURRENCIES. Assets and liabilities recorded in foreign currencies are
translated at the exchange rate on the balance sheet date. Translation
adjustments resulting from this process are charged or credited to equity.
Revenue, costs, and expenses are translated at average rates of exchange
prevailing during the year. Gains and losses on foreign currency transactions
are included in other expenses.
REVENUE RECOGNITION. Revenue is recognized when earned. The Company's revenue
recognition policies are in compliance with American Institute of Certified
Public Accountants Statements of Position 97-2 and 98-4, Software Revenue
Recognition. Revenue from products licensed to original equipment manufacturers
is recorded when OEMs ship licensed products while revenue from organization
license programs is recorded when the software has been delivered and the
customer is invoiced. Revenue from packaged product sales to distributors and
resellers is recorded when related products are shipped. Maintenance and
subscription revenue is recognized ratably over the contract period. What it is
Financial Publishing : Financial Publishing What it is
Current “best practice” publishing process : G/L Data Text Text Text Text 10-K
N30D Web
HTML Hard Copy 10K
N30D EDGAR PDF Investor Financial Data
Aggregators Text Proprietary
Mark-up Other Current “best practice” publishing process What it is
Future publishing process : Future publishing process G/L Data Text Text Text Hard Copy PDF Investor Text XML-based Standard Text 10-K
N30D 10K
N30D EDGAR Other Financial Data
Aggregators What it is
Demo from Charlie Hoffman’s site, www.xfrml.org... : Demo from Charlie Hoffman’s site, www.xfrml.org... What it is
A fragment of XFRML : A fragment of XFRML
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What it is
A similar fragment of XFRML : A similar fragment of XFRML
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What it is
Another fragment of XFRML : Another fragment of XFRML
NOTES TO FINANCIAL STATEMENTS ACCOUNTING POLICIES
principlesOfConsolidation
PRINCIPLES OF CONSOLIDATION
A
The financial statements include the accounts of Microsoft and its subsidiaries. Significant inter-company transactions and balances have been eliminated. Investments in 50% owned joint ventures are accounted for using the equity method; the Company's share of joint ventures’ activities is reflected in other expenses.
What it is
Why it is important : Why it is important For the Investing Community (e.g. Institutions)
Easier, more timely analysis and comparisons.
For the Reporting Community (e.g. Companies)
Increasing the transparency of reporting lowers companies’ cost of capital. Improves internal efficiency via “create once publish many” approach.
For the Assurance Community (e.g. Auditors)
Improves efficiency of some analytic processes
For Vendors - interoperability Why it is important
XFRML Project Steering Committee Members : XFRML Project Steering Committee Members Sponsor: AICPA (American Institute of CPAs)
IASC (International Accounting Standards), Equivalent CPA institutes in Australia, Canada, UK, Germany, Sweden, FEI (Financial Execs Institute)
Morgan Stanley Dean Witter
Microsoft, SAP, Great Plains, Interleaf, Edgar Online, FRX, Caseware, Docutech
PwC, KPMG, E&Y, D&T, AA, Crowe Chizek
Charlie Hoffman, Woodburn Group, Cohen Consulting, other individuals. Why it is important
How it Works - General : How it Works - General Core
Schema Domain
Schema Domain
Schema An XFRML Document Document
Schema How it works
How it Works - Example : How it Works - Example Core
Schema USGAAP
Schema KPMG
Schema DotCom.Com Financials 10-K
Schema How it works
The Core Schema specifies leaf element syntax : The Core Schema specifies leaf element syntax Core
Schema Item: like an RDBMS table for representing financial data; attributes are like columns and each element represents one row of the table, e.g.:
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Account: Binds account identifiers to their properties, e.g.:
Rollup: Specifies a tree of arithmetic relationships, e.g.:
How it works
Core and Domain schemas are sufficient for some jobs : Core and Domain schemas are sufficient for some jobs Mutual Fund
N30D
(Raw Text) Prospectus
(Web or PDF) Before How it works
Domain Schemas define terms and relationships : Domain Schemas define terms and relationships Core
Schema USGAAP
Schema KPMG
Schema
Rollup and other relationships are used when transforming XFRML documents for display (e.g., indentation and underlines for subtotals) or further processing (e.g., checking arithmetic consistency across different tables). How it works
Document Schemas specify document structure : Document Schemas specify document structure Core
Schema USGAAP
Schema KPMG
Schema Document
Schema
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The semantics of XFRML assumes that Item attributes can be inherited from parent elements. Document schemas need to support this. How it works
Mapping Schemas declare correspondences : Mapping Schemas declare correspondences
How it works
Timeline : Timeline Today: www.xfrml.org web site demos cover a variety of uses, but its details do differ from the emerging technical specification.
January 20th: Release of “exposure draft” for comment. Likely to cover only the core plus one document type that looks somewhat like a 10-K.
Jan 20-Mar 31: Pilot implementations at US- and non-US companies of various sizes & industries
March 31st: Public launch of specification supported by publicity around the pilot implementations. When it will emerge
Shameless Pitch for Broader Participation : Shameless Pitch for Broader Participation Tomorrow
Wednesday December 8th
4pm -- 6pm
Doubletree Hotel
Avenue of the Arts, Broad Street at Locust
Building with XML : Building with XML Walter Hamscher
PricewaterhouseCoopers Global Technology Centre
walter.hamscher@us.pwcglobal.com