Interview with Campbell Pryde, Director of Standards at XBRL US

MARK STORY: Hello, and welcome to the 4th in a series of podcasts produced by the Office of Interactive Disclosure of the Securities and Exchange Commission, or the SEC. My name is Mark Story and I will be your host of today's podcast. This is the fourth in a series of podcasts is designed to introduce people to interactive data, or what some people call "XBRL." The Office of Interactive Disclosure at the SEC heads up our interactive data efforts.

Before beginning, as usual, I need to let you know that the views we express today are our own and not necessarily those of the Securities and Exchange Commission, of its Chairman, of its Commissioners, or of my colleagues on the staff. Those of us who work at the SEC are all required to add that disclaimer whenever we speak publicly.

Moreover, this will be the latest in a series of podcasts about the new world of interactive data. We encourage all questions and comments. If you have one about interactive data generally, please send it to our email address: Ask-OID@sec.gov. That's A-S-K- dash - O-I-D@sec.gov.

With that out of the way, let me introduce today's guest, Mr. Campbell Pryde. Mr. Pryde is the Chief Standards Officer for XBRL US, the non-profit consortium for XML business reporting standards. Joining XBRL US in March 2008, Mr. Pryde leads the development and maintenance of taxonomies (or tags) for XML-based business reporting applications in the U.S. Formerly Campbell was with Morgan Stanley, where as Executive Director in the Institutional Securities Group, he managed the equity research XBRL-based valuation framework. He has been involved with XBRL since 2001, and most recently served as Chairman of the XBRL US Domain Steering Committee which is responsible for setting the strategic direction for development of the XBRL US GAAP taxonomies. Prior to joining Morgan Stanley, Mr. Pryde was a Partner in the Risk and Advisory Practice of KPMG LLP. He is also member of the New Zealand Institute of Chartered Accountants.

MARK STORY: As someone with a background in Wall Street and business reporting and has also been involved with XBRL for since 2001, can you explain how the taxonomies, or with some people call "tags" are and how they work?

CAMPBELL PRYDE: Thanks, Mark. A taxonomy is really a way to define accounting standards in a format that can be automatically processed by someone, so what we have done with the XBRL US taxonomies that are used for interactive data is gone through and identified what U.S. accounting standards are in electronic format and what is recorded in a taxonomy and what taxonomies allow individual companies to do is to take a financial report and put them into an XBRL or interactive data format using tags that we have defined. A lot of people use an analogy to a bar code so you can indicate "I have a concept called 'sales.'" Different companies today will record sales in their financial statements and the way that individuals recognize those is just purely by the word "sales." Different companies may use different words like "revenue" and what XBRL and interactive data tries to do is to basically standardize a lot of these tags so that people can easily identify these terms and do an analysis of them. To the second part of your question, the taxonomies were developed over the last year and a half by a team here at XBRL US. There upwards of over a hundred people involved representing major accounting firms as the data providers. intermediaries financial preparers and also the filing community in addition there are number of software companies also engaged to make sure that the taxonomies that were developed meet the specifications and technical requirements that are required in terms of the taxonomies in their scope. The taxonomies were designed to cover a number of different industries and we have created five taxonomies to cover some broad industrial classifications: those are banking and insurance, commercial industrial companies, real estate and broker-dealers. Those taxonomies are what we have issued. In the past, there were some previous taxonomies issues prior to the taxonomies release on the 28th of April and what we've done and what all these people have done in teams in groups and companies who are involved in building these taxonomies have taken the taxonomies that existed in 2006 and really expanded on them so that allows people to view the entire filing giving both the notes and the financial statements.

MARK STORY: So it sounds like quite a bit of feedback and input went into the development of this.

CAMPBELL PRYDE: Absolutely, there was feedback from thousands and thousands of comments received, the feedback was taken and incorporated, there are number of elements in the taxonomies and obviously companies will be using all of them but that the moment there are approximately 12,000 concepts which are represented broader range of different businesses and activities. This provides a really good framework for companies to be able to capture this information and try to reduce the need to create their own custom tags which companies can also do when they file

MARK STORY: You mention the various industries and I think that this is a question that is general really across all industries. How should people get started with the taxonomies and tags and what are your recommendations for first steps?

CAMPBELL PRYDE: One of the first things they should probably do is get a copy of the taxonomies and get a copy of some software to read the taxonomies. The taxonomies are an XML format and XBRL is a derivative of XML — you can look at in a web browser if you want to but I would not recommend that you do. There is free software available from a number of vendors to help you to look at the taxonomies. Additionally, you can go to XBRL.US and get copies of the taxonomies there. You can download them; we also have a viewer available on our web site which allows you to look at the taxonomies and to navigate around them to get an understanding of what are the tags that are then used how they fit together, how they are like each other how to calculate how to relate back to US GAAP. You can download the taxonomies from the web site you can also get links to various vendors where you can download software from numerous vendors and you can open those taxonomies in terms of starting to prepare your filing. We have also put out something call "the preparers guide" which is also downloadable from our web site and I would recommend downloading that and having a look at that. In terms of filing, there are a number of options you can take: you can get a filing agent to help you or you can do the filing yourself and work with a filing agent to submit that using the SEC EDGAR system.

In addition, there are software companies who have consultant services to help you do your filing and there are accounting firms as well that you can contact and they'll be able to give you a hand to soon help you to prepare a filing. If you choose to use either a third-party consultants or your own filing or a filing agent or accounting firm to help you with that, I do recommend that you look when companies prepare the XBRL filing, have a look and make sure that the map and that mapping the use is there and that is correct and depending upon the detail you want to go through that can take various amounts of time as part of the filing program the requirement initially is to do the face financials. I would recommend that you also start with that and get comfortable with the face of the financials you may want to start in doing a quarter before the first before the first annual filing just to get familiar with the filing program get familiar with how I gets into the EDGAR system get comfortable with the and start to get comfortable with what it involves before you make a decision on whether or not you want to tag the notes in the first year. And some companies want to see what's involved what does he was involved in making a new process.

MARK STORY: This sounds to me as similar to how you when you rent a car, you might not be familiar that particular car, so the first thing I do is I take a minute to familiarize myself with the car: where the mirror is, where do you turn on the lights, etc. Some of this may be familiar to people but it sounds to me like you should first take a stab and look at your website, look at the taxonomies, look of the preparers guide if you wanted to use the analogy of hopping into the driver's seat of a rental car, you can begin to familiarize yourself with this.

CAMPBELL PRYDE: This is a very good idea. The taxonomies themselves… there's a lot to familiarize yourself with, so the earlier you get started but that the better off you'll be. In addition we provided some examples of companies' financial reports and included on the web site and how they would tag in XBRL format so it gives you some idea what they are actually doing. In addition, in the next couple months will be coming out with additional tagging which really addresses this specific issues that people are having as they prepare their filings. We also have a general inquiry e-mail address that you can always use or drop us a line we can get back to you.

MARK STORY: I guess as a last question, what is your thinking about how companies will incorporate or manage changes or updates to the taxonomies?

CAMPBELL PRYDE: What we are trying to do at XBRL US is to try to minimize the impact of changes. Obviously, there are certain things that we find in the taxonomies are improvements that we can make in an ongoing basis and there are also changes to come about for accounting changes for financial standards which FASB or the SEC so what you can do is basically you have to monitor or some of those changes that you would today on a normal basis like accounting changes coming at FASB. And in terms of the XBRL perspective or interactive data taxonomies, a yearly release will be done at the end of January, so if you can get the taxonomies and if you want to know that you have the latest taxonomy, it is released at the start of every single year you know you have the right taxonomy. There are consistent updates throughout the year so you can minimize the amount of monitoring the you have to do in addition if the fact is the comes out with a standard that has to be adopted immediately, there will be a taxonomy extension provided which is an extension of the taxonomy that is released at the start of the year which you can then import and that is added to the taxonomies. Then you don't have to go through and change all that yourself, so we provide that as a service in addition for changes to the taxonomy. A comprehensive list of all changes will be provided and the role they will also be in electronic format although any elements that are being moved or what we call "deprecated" will be indicated there is this element is going to be removed for software and will indicate to you how you should work on the tags. Every company that is preparing a filing will be using interactive data format, so it will be recommended that you read the company extension, so what you want to do is before you create the company extension and when you file every quarter you want to check that the company extension valid and the taxonomies are released once a year or is compatible with an extension that may come out for an accounting standard that has to be adopted immediately.

MARK STORY: Wonderful. One follow-up question is this: when you were a member of the New Zealand Institute of Chartered Accountants, did you ever in your life imagine that you would be working for an organization called "XBRL US?"

CAMPBELL PRYDE: No, I didn't and XBRL is rather difficult to pronounce so it's one of those things were even if I thought I was I would never have guessed.

MARK STORY: Campbell, Thanks for being with us today. This concludes the Securities and Exchange Commission's Office of Interactive Disclosure Podcast #4. Remember that this is the just the latest in a series of podcasts about the new world of interactive data. We encourage all questions and comments. If you have one, please send it to our email address: Ask-OID@sec.gov. That's A-S-KO-I-D@sec.gov.

Be sure to check back soon as we will be responding to listener inquiries in coming podcasts. For Campbell Pryde, this is Mark Story saying "thanks for listening."