The Road to Better Business Information: Making a Case for Xbrl Essay

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THE ROAD TO BETTER BUSINESS INFORMATION: MAKING A CASE FOR XBRL
A Conversation With Nasdaq, Microsoft and PricewaterhouseCoopers

by Al Berkeley, Vice Chairman of Thought Leadership at Nasdaq, with John Connors, Senior Vice President, Chief Financial Officer of Microsoft, and Mike Willis, Partner at PricewaterhouseCoopers

Table of Contents Introduction ............................................................................................................. 1 The Investor’s Situation.......................................................................................... 2 Getting to a More Efficient Market: A Conversation With Al Berkeley .......... 4 An Adoption Case Study: A Conversation With John Connors ........................ 6 Enabling a Better-Managed Company: A Conversation With Mike Willis...... 9 Appendix A: XBRL Resources ............................................................................ 11 Appendix B: Author Biographies ........................................................................ 12
Alfred R. Berkeley, III.............................................................................................................. 12 John Connors ........................................................................................................................... 12 Mike Willis, CPA ...................................................................................................................... 13

Introduction
The enormous success that developed economies have had in raising standards of living has come, in part, from the efficient allocation of capital. Capital has been provided to the effective competitor on better terms than to the less effective. The investor knows the difference between more effective and less effective competitors because trustworthy, thorough and timely systems have evolved to distribute and evaluate corporate results. It is in the best interest of the company, the investor and the public to make the availability of corporate results broad, complete and timely. This paper is, essentially, a conversation between these points of view. The participants all recognize the challenge of achieving more effective information delivery. Nasdaq Stock Market Inc. is concerned about its entire range of companies, and the benefit to all investors and the general public, of easier distribution and analysis of corporate results. Microsoft Corp. is concerned with meeting its obligation to communicate with arguably the largest and most involved shareholder base in the world. PricewaterhouseCoopers is concerned with meeting the rising obligations that public opinion, case law and regulation are imposing on the capital markets: better reporting, more sophisticated analysis and greater trust in the information provided. The market, the company and the accountant each need to add value for their customer. In this case, the customer is the public investor.

THE ROAD TO BETTER BUSINESS INFORMATION: MAKING A CASE FOR XBRL

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The Investor’s Situation
Investors effectively have been left to their own devices to analyze corporate results. A small industry of intermediaries has evolved selling analytical services on perhaps 20 percent of publicly traded companies. The translation between the information a company reports and the information used by investors to analyze corporate results is a hand-tinkered and labor-intensive one. It is the least standardized, least-automated link in the entire value chain of capital markets. It is true that corporate results are now available online, but even when the investor receives corporate results at the speed of light, there is a time-consuming, intellect-intensive process of converting data on the company report into data on the investor’s spreadsheet. Virtually every investor has to convert data received from the company into a form useful to the investor. The new data needs to be analyzed and thought through for what it says: 1.
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