“More transparency is one key to restoring trust, and executives have a fiduciary responsibility to their stake holders to learn more about XBRL and how this powerful open source royalty free information standard can help bring transparency and trust back to markets.” Liv Watson, a founding member of XBRL International Consortium “There are many who rightly see the crisis as the consequence of failure to put economic policies at the service of the common good. As Adam Smith wrote over 250 years ago in his Theory of Moral Sentiments, univer-sal values far beyond the profit motive – including humanity, justice, gen-erosity and public spiritedness – must provide the framework for markets to work effectively. Now, he might argue, is the perfect moment to ensure that such core values are finally hardwired into public policy and interna-tional relations. In a highly interconnected world beset with shared prob-lems, we cannot afford to get this wrong. And if we get it right, then we might finally have learned the lessons that Smith was trying to teach us.” Kofi Annan, Former, UN Secretary-General An abstract

Enhancing Capital Markets Transparency and Trust By Liv Apneseth Watson, IRIS Business Services XBRL a universal language of business information transforming the approach to dis-closure The idea that regulatory-required disclosure can reduce risks and foster transparence is not something new to public policy. As early as the 1930s, reacting to the market meltdown of the great depression, President Franklin D. Roosevelt championed the approval of the United States Securities and Exchange (SEC) Acts, which required companies that sold securities to the public to reveal earnings, obligations, and other data to foster transparence to investors. Over time, those disclosure requirements formed the basis for public confidence in the nation's securities markets. Back then before copy machines, fax machines, and computers had been invented. People trav-eled to Washington, D.C., to public reference rooms to gather information they wanted to use for analysis or other purpose and then called key stakeholders about the event from SEC provided payphones. In those days, you had to have pocket full of quarters if you went digging into SEC filings. Now, in the wake of yet another market meltdown, government, regulators, industry groups and investors are once again taking a closer look at how disclosure works in practice. The Internet and electronic communication has ensured that information is more freely available than ever before and that the time it takes to deliver that information has sharply de-creased. The key question is now: How reusable is that information? Even when you know ex-actly what you are looking for and roughly where to find it, extracting information from financial and business reports today generally involves a largely human error prone manual effort that is often very frustrating and time-consuming. The biggest problem is that the format and media on which financial and business reported disclosures are authored and shared varies widely be-tween paper, html, pdf, and other human readable forms or proprietary electronic formats tied to a specific software application. Each publishing format has its limitations. To resolve the prob-lem of providing reusable access to timely, relevant, discoverable and accurate financial and business information a market-driven open-standard consortium has evolved and developed an information standard called XBRL short for eXtensible Business Reporting Language. This inter-national consortium powerfully connects members representing the entire business reporting supply chain (see Figure 1 below) in the development of a standards-based solution for financial and business information that is universally open industry-driven, and internationally endorsed.

Figure 1: The Financial and Business Reporting Supply Chain

Source: XBRL International, Inc

XBRL International is comprised of local jurisdictions which focus on the progress devel-opment and coordination of XBRL in their region and direct members in regions that juris-dictions have yet to be formed. Members of XBRL International include approximately 600 leading companies, associations, government and other industry agencies involved in pro-viding or using business information. XBRL Components There are two main components to XBRL: the XBRL Specification and the XBRL Taxono-mies, including the underlying linkbases. 1 XBRL Specification The XBRL technical Specification provides the fundamental definition of how

XBRL actually works. The Specification allows software vendors, programmers and end users who adopt it as a specification to enhance the creation, exchange, and comparison of financial reporting information. The documentation of the Specifica-tion is published by XBRL International and is available at http://www.xbrl.org/Specifications/.

2 XBRL Taxonomies The key to understanding the benefits of XBRL lays in the notion of “taxonomies” and it is probably time for all executives to add "XBRL Taxonomies" to their profes-sional vocabulary.

XBRL taxonomies are basically dictionaries of business terms and links to their corre-sponding linkbases. Not only does the information become instantly searchable and re-trievable, but it can also be immediately loaded into spreadsheets and any number of soft-ware applications for analysis. “[T]he data is trapped in an iceberg of paper in these current systems, and if we could just tag that data it would be instantly available. That iceberg would melt, that data would be freely available, and it would be accurate, it would be complete, it would be timely, it would be relevant, and it would be comparable.” Alfred Berkeley, former President Nasdaq, CEO Pipeline Trading, New York Figure 2, shows a sample of an original data item with tagged and linked explanatory labels that enhance the user's understanding of a data element.

Label Linkbase: This is a list of common business reporting term that is used in general purpose financial and business reporting statements. • Presentation Linkbase: This allows the user to click on a link and see the informa-

tion in different views and different languages. • Reference Linkbase: This allows for data items to be linked directly to items in au-

thoritative literature such as US GAAP standards or other authoritative literature. • Formula Linkbase: This allows one to set triggers that could give early warning

signals for accounts that are in trouble with one click of the mouse. A common way to communicate and exchange these formulas among stakeholder

• Context Linkbase: This gives the XBRL tagged item more information about the data item, such as it is a budget number in US dollars for fiscal year 2008.

• Calculation Linkbase: This explains from what calculation the number derives, for example ensuring that Cash equals Currency plus deposits.

• Other Linkbases: This allows the author’s of financial and business reporting data to add or link additional attributes to a data item. Companies can provide additional data definitions, authoritative literature references and more thereby dramatically increasing the probability that the user of the financial data will be able to under-stand management’s intent and enhance comparability.

 Building Trust with Enhanced Interactive Disclosure One thing investors and regulatory agencies should be able to count on is that audited financial statements reported to public repositories at least add up, but a recent study undertaken by IRIS Business Services shows that this is not necessary the case. In this study by using XBRL it was discovered that 209 listed Indian companies had discrepancies in their reports and that the numbers did not add up. This was discovered by converting over 1,400 listed Indian companies’ primary financial statement into XBRL using the benefits of the calculation linkbase as part of the XBRL International specification that explains from what calculation the number derives. It does not really matter that most of discrepancies were not material. The very fact that there are discrepancies is a serious enough matter. The errors were discovered in the course of creating India’s first-ever corporate fundamentals database in XBRL. The project used the taxonomy approved recently by the Institute of Chartered Accountants as a first step toward full-fledged adoption of XBRL in India. It might be unfair to simply blame the auditors, as it is the responsibility of company managements to get it right, but the fact that this information has gone undiscovered for years should raise the questions, how accurate is the information reported by companies to the marketplace. This “Trust Meltdown Report” comes at the time when the Indian capital marketplace is already being questioned about its regulatory oversight. Just recently a leading Indian outsourcing company Satyam Computer Services publicly announced that it had significantly inflated its earnings and assets for years, consequently throwing the whole local capital market into turmoil. Many observers are now asking whether similar prob-lems might lie buried elsewhere. The challenges associated with accurate, timely financial reporting are apparent from the number of other accounting scandals uncovered during the past few years. These scandals have been widely reported and the estimated cost has grown into the billions of dollars (Economist, 2003). Restatements of financial results by public companies soared in 2005 as auditors were forced to drill deeper into corporate accounts, in part because of a sharper focus on requirements laid out by the US Sarbanes – Oxley Act (Reilly, 2006). This brings the attention to that a non-technological solution can go only so far. This is why the underlying design of the XBRL technology specification might be the magic wand to bring accurate and timely results because it integrates technologies with the basic accounting framework. Using underlying linkbases, XBRL allows every item defined in a

financial statement to carry multiple attributes, including the interrelationship with other elements. This simple, yet powerful concept of linkbases allows every accounting element to be validated before being submitted to a regulator. Clearly the way financial and business reporting data is prepared, communicated and analyzed today is fundamentally changing. XBRL is not about the technology. It is about communicating your financial and business reporting information, accurately, effectively and in real time, to the electronic market-place. Give the capital markets better financial information that is easier to consume, is more reliable, and is delivered faster, and the capital market will respond favorably with more exposure and lower costs of capital. REFERENCES Economist . ( 2003 ) Still counting the cost .October 2003 . Reilly , D . ( 2006 ) Sarbanes – Oxley changes take root . Wall Street Journal , 3 March 2006 . Social Analytics - The Benefits of Standardization of related context, presentation, formulas, and relationships Standardizing business information, its context and presentation concepts are foundational to automating the exchange of relevant disclosures between companies and their stakeholder constituents. As outlined above, XBRL also enables the standardization of related formulas which can be combined into complex calculations and even analytical models. The standardization of the critical information concepts (context, presentation, formulas, and relationships) enables third party users to more effectively access, analyze, manipulate, share and collaborate. Current analysis processes are adversely impacted by physical location of the information within spreadsheets. A formula that represents a simple analytical concept, say ‘Return on Assets’, would be articulated based upon the physical location of the relevant data (e.g. (B2/F2) where B2 is the cell location of Net Income and F2 is the cell location for Total Assets).This physical orientation of information hinders development, sharing, reuse and management of formulas (macros) across spreadsheets, applications and analysts. The current physical orientation of information within spreadsheets also limits the analyst’s ability to cost effectively share and/or collaborate with other analysts. XBRL enables analysts to build formulas (macros), based upon the standardized vocabularies. The XBRL enabled ‘Return on Assets’ formula will look more like a logical sentence (eg ‘netincome/totalassets’). In an XBRL enabled spreadsheet, the software provides a view of the company information and executes the analytical formula based upon the logically defined information of ‘netincome’ and ‘totalassets’. As a result, ana-lysts have an enhanced analytical processing environment in which they can construct for-mulas based upon public taxonomies from both the public-sector companies and even those unique taxonomy extensions developed by the individual analyst. As with the barcode, standardized information structures enable greater levels of automation within business processes. Some analysts are already using XBRL to reduce

costs and improve effectiveness of their internal analytical processes, either through intermediary offerings or internally developed applications and products. Other analysts are applying semantically based artificial intelligence agents to make subjective assessments on narrative disclosures that are structured in the XBRL format. Just as html enabled the social networking collaboration via sites like Facebook, Wikipedia, and MySpace; XBRL is enabling social analytics via EDGAR-Online's I-Metrics platform, Morgan Stanley's Modelware, IRIS Business Service iFile compliance platform, and PricewaterhouseCoopers Interactive Data Platform. These XBRL enabled analytical platforms provide analysts with a library of highly reusable analytical models and formulas and a collaborative method of sharing new ideas and insights with other analysts within their organizations and/or groups. The enhancement of capital market transparency is not only relevant for company disclosures; it is also relevant for the formulas and models used to analyze the company disclosures. Social analytics is a new level of market transparency that promotes better communication between companies and their investors and collaboration between investors. These new capabilities work to enhance the analytical capabilities of both companies and their stakeholders and thereby foster trust in company disclosures. The bottom line is, if a company is not on radar screen of the investors, chances are that the prices would fall and cost of capital rise. If a stock exchange’s data system is not easy accessible to investors, they may drop off the radar screens of the investors. Today’s focus on improving business reporting and bolstering confidence in financial capital markets demands technology that enables rapid and accurate reporting and analysis of corporate financial information. Any capital markets that want to fulfill its mission of protect inves-tors, maintain fair, orderly, and efficient markets, and facilitate capital formation should adopt XBRL as part of their filing requirements to boost investor’s confidence. The list of benefits could go on. For now, suffice it to say that executives have an economic fiduciary responsibility to learn more about XBRL and how this powerful information standard can be used to improve efficiency of data sharing of financial and business reporting information. Side Bar Brief description of Sample XBRL projects worldwide (in alphabetical order) Belgium Since January 2008, XBRL has been mandatory for all filings of annual accounts to the National Bank of Belgium and the project has been extended to the annual accounts of the not-for profit sector. The CBSO (Central Balance Sheet Office - CBSO) receives currently more than 90% of all the annual accounts filed in XBRL format. Canada The Canadian Securities Administrators Voluntary XBRL filing program is now in effect, XBRL Canada is working on a taxonomy that conforms to IFRS.

Chile Starting 2009 those companies which are the most actively traded on the Securities Market will be required to file their annual financial statement according to the international standards. The SVS XBRL Team has extended the IFRS taxonomy according its requirements and the companies would be filing their returns based on this taxonomy. The SVS XBRL project is one of the first XBRL projects in South America China The China Securities Regulatory Commission has been looking forward towards adoption of XBRL for information disclosure of listed companies since 2002 and has been joined by the Shanghai Stock Exchange for the implementation of XBRL as a reporting standard. As of April 30, 2009, all the 864 companies listed on the Shanghai Stock Exchange (SSE) have submitted their XBRL instances simultaneously during the disclosure of the periodical reports of 2008 for the first time, and included the aforesaid XBRL instances as part of the mandatory disclosure. Denmark The Danish Commerce and Companies Agency (DCCD) has been receiving annual ac-counts from companies in XBRL since 2005. A complete XBRL solution for the Danish class B annual reports has been running since the beginning of 2008. The XBRL Taxonomy in Denmark has been developed by the DCCA in co-operation with both industry and experts. Germany Around 425,000 corporations are filing their annual statements with the German Bundesanzeiger in XBRL format since 2007 using the latest German GAAP taxonomy i.e. HGB Taxonomy. The third version of C&I taxonomy is updated and GAAP Taxonomy for financial institutions was finalized and included into the package. India The Securities Exchange Board of India (SEBI) has mandated the top 100 companies listed on the two major exchanges viz. the Bombay Stock Exchange and the National Stock Exchange, to file their disclosures through XBRL-based Corpfiling. In addition to the mandated 100 companies, over 500 companies are filing voluntarily their financial in XBRL. The Reserve Bank of India, India’s central bank, has launched XBRL based reporting solution for capital adequacy returns. All the scheduled commercial banks which fall un-der the purview of Basel II use this platform. Returns for fortnightly liquidity position and the annual financial statements are in pipeline The Institute of Chartered Accounts of India has developed taxonomy for India based on Indian GAAP. The taxonomy for Commercial and Industrial sector is completed and ready for acknowledgement from XII. The taxonomies for Banking and Non-Banking companies are under development

Ireland The Central Statistics Office (CSO) Ireland has started a pilot to assess use of XBRL in one of its quarterly industry surveys. The pilot involved the creation of XBRL documents of one of the CSO forms - the Quarterly Accounts Inquiry to Industry. The survey covers enterprises with 20 or more persons engaged in the Mining, Manufacturing and Energy sectors and reports on changes in stocks, acquisitions and sales of capital assets during a quarter. Seven respondent companies participated in the pilot and successfully submitted data electronically using the XBRL solution. Japan Japan also is one the early adopters of XBRL and had started voluntary XBRL reporting program for financial services institutions gradually expending the range of reports since 2005. The Financial Services Agency (FSA) has implemented a new system which requires around 5,000 listed companies and 3,000 mutual funds to submit their financial information in the XBRL format. Korea As of 2007, all publicly held companies file financial statements using XBRL on the electronic filing system of the Korea Financial supervisory Commission. The system allows viewers to see and analyze a company’s financial statements in English. Macedonia Mr. Fatmir Besimi, head of the Ministry of Economy in Macedonia has initiated a study headed up by a local firm RE-AKTIV DOO for a nationwide implementation of the XBRL standard and is expected to go live in 2010 with a goal to reduce compliance cost of com-panies as well as attract foreign investment. Netherlands Since 2005, one of the largest XBRL projects was started by Netherland government with the aim of decreasing the regulatory reporting burden on the entities by 25%. The taxonomy project covers three major reporting areas – taxation, annual accounts and economic statistics. Since Jan 2007, all the Dutch corporations were able to submit their data in XBRL format. Singapore The Accounting and Corporate Regulatory Authority of Singapore is mandating the filing of statutory reports in XBRL. Since November 2007, Singapore-incorporated companies are required to file their Annual Returns including financial information XBRL format. Baring certain types of exempted companies, all listed and non-listed companies will be filing in XBRL South Africa The Johannesburg Stock Exchange developed as a pilot, an XBRL based filing platform. JSE commissioned Deloitte SA & IRIS Business Services (IRIS) for building the platform. Seven companies, and the JSE, along with XBRL SA came together to sponsor this project. This pilot is also the earliest adaptation of IFRS 2008 taxonomy.

Spain The Spanish Stock Exchange has begun to use XBRL for receiving and distributing public financial reports from more than 3,000 listed companies. The Bank of Spain, central bank, is receiving regulatory data in XBRL from more than 400 banks covering more than 90 % of the Spanish financial sector. The Bank of Spain has also developed a Financial Informa-tion Exchange System to support XBRL reporting by credit institutions. United Kingdom Companies House has already received more than 200,000 accounts from small compa-nies in XBRL using an extension to the UK GAAP taxonomy. United Kingdom HRMC Draft Regulations to require online XBRL Corporation Tax filings have now been issued and are open for comment until 31 July 2009. Companies will be required to file online the Corporation Tax returns and payments from 2011 in XBRL format. The rules apply to period ending on April 1, 2010 and later. United States The Securities Exchange Commission has played a vital role in accelerating adoption of XBRL in the US. Voluntary filing program for XBRLised returns has been initiated by the exchange in early years and is moving towards mandatory filing in a phased manner. In December 2008, SEC has made it mandatory for companies above USD $ 5 Billion as global float, to file their returns from June 2009 quarter onwards in XBRL format and around 500 companies are expected to file XBRLised returns and over the next couple of years all companies will be phased in for a 100 percent compliance. The SEC is also man-dating that all mutual funds start reporting in XBRL in 2010. The Federal Financial Institutions Examination Council in US has achieved major success with the use XBRL for regulatory bank reporting. The FFIEC implemented XBRL-based solution in 2005 for the filing of call reports which was used by more than 8000 financial institutions. The results were phenomenal and showed an increase from 66% to 95% in data cleanliness, from 70% to 100% in accuracy, from weeks to hours in timeliness, and a 15% rise in the productivity of analysts. State Nevada State entered into a pilot with IRIS Business Services to use XBRL for debt collection. The agencies would be using spreadsheets to send their data to the state and XBRL would be running beneath. IRIS together with Nevada State Controller Kim Wallin have published a white paper on State Business Portal which talks about the need to streamline the transactions and inter-agency interactions and the role of XBRL in building such integrated information exchange platforms.

For more information, please contact Mr. P. Anand IRIS Business Services (Asia) Pte. Ltd. Singapore  Email : anand.p@irisbusiness.com  Ms. Liv Watson  IRIS Business Services Pvt. Ltd. E mail : liv.watson@irisbusiness.com  Ms. Deepta Rangarajan IRIS Business Services Pvt. Ltd. Email : deepta.rangarajan@irisbusiness.com