The Process and Achievement of the Application of XBRL in Aviation Industry—Based on Eastern Airlines Application Example ()
1. Introduction
As a milestone and a new start of Chinese accounting informationization, the XBRL General Taxonomy was released by the National Standardization Management Committee and the Ministry of Finance on Oct 19, 2010, which laid the foundation for establishing a scientific, sound and globally accepted accounting standards system in China [1]. After that, to promote the construction of corporate accounting informationization and drive the implementation of general XBRL taxonomies on Chinese accounting standard, since Jan 1, 2011, Ministry of Finance has carried out the pilot implementation plan of XBRL general taxonomy in corporate and accounting firms [2]. The fist pilot units included 13 corporations such as China National Petroleum Corporation (601857), CEAIR (600115) and 12 large-scale accounting firms involving BDO China Shu Lun Pan CPA LLP., PWC, KPMG, DTT, and EY. Our team participated in the project “Platform Construction and Application Demonstration of Standard Financial Report Based on XBRL” (2009BAH45B04), which is the sub project of “National Technology Support Program (2009 BAH45B00)”. Based on the application of XBRL in CEAIR, the authors discussed how to combine the theory and practice when applying XBRL, the extension of general XBRL taxonomy to specific industry taxonomy, as well as the obstacles encountered and the results achieved during the implementation of project, which brought in a deeper understanding of applying XBRL in enterprise.
2. The Implementation of the XBRL Project in China Eastern Airlines
2.1. The Status and Difficulties in the CEAIR XBRL Implementation
The organizational structure of CEAIR is very special (as shown in Figure 1). The headquarters contain a lot of branch offices and subsidiaries, which are also divided into a lot of the business departments. Meanwhile, the company also set up a number of departments, centers, as well as overseas offices. Because CEAIR has a large complex structure, it is hard to make the data format unified for facilitating the submission and delivery of data. The reason for this problem is that different objects have different sizes and informationization levels. For example, some objects have a complete data processing and aggregation, while others are still in the initial stage of manual processing. But the overall company must realize the whole data collection and presentation in order to achieve the data unification. Therefore, it can be imagined that it is so difficult to realize XBRL in such a large and complex system. Once the enterprise information system is unable to load the XBRL data, the entire system will break down or collapse.
CEAIR is a corporation listed in the three markets. Its governance structure is very complex. It is difficult to translate the data in the ERP system to the format of XBRL due to the complex structure of CEAIR. Although the ERP data can be automatically transformed to XBRL data through data interface, it does not work in some of the business department and subsidiaries since they are not applied to ERP software. Thus it requires a large amount of manual input because of the poor readability of these unstructured financial data.
2.2. The Concrete Implementation Plan and Steps of the Application of XBRL in CEAIR
In general, there are three modes to achieve XBRL financial reporting.The first is using corporate information system such as ERP systems in which the direct output is printed document or PDF file which cannot be directly converted and used. Instead, manual input is required to form XBRL files in accordance with the formation of the XBRL documents when converting. Manual inputting in this mode also increases the risk of data errors. The risk of errors and high cost caused by manual entry will deteriorated the actual application value in this mode [3].
The second mode is to form a variety of financial statements by the enterprise information system itself such as ERP system. And these financial statements can be stored in the form of electronic documents such as Excel or Word. When the XBRL statements are required by the relevant securities institutions or banks, they can be converted by XBRL format converter in accordance with the corresponding taxonomies and the instance document requirements. Although this mode is currently the main application one in the practical application, it is only a transitional stage for the future development of data. XBRL will be the future data form in enterprise, thus all valuable data (including general ledger data) will be transformed into XBRL form [4].
In the third mode, the enterprise’s own ERP system is integrated with XBRL adapter. Therefore, the financial report processing can be completed during information processing in accordance with XBRL standard.
Figure 1. The organizational structure of the CEAIR.
Meantime, the XBRL documents can be output in real time.
The application of such mode requires a new version of ERP software with an embedded XBRL adapter developed by the original ERP system vendors. In the new ERP system, extraction and conversion to XBRL metadata are completed in all aspects of the business processing, and the standard XBRL documents will be generated timely according to the XBRL taxonomy, for instance, the financial statements requirements. Among all modes, the third one is the best mode for the application of XBRL financial reporting, but also the most difficult one to be achieved [5]. Compared with others, this third mode can exert the advantage of XBRL to the most extent, can quickly and efficiently provide various kinds of real-time financial information which is convenient to be exchanged.
This project adopted the third mode, in which XBRL is completely embedded in the new ERP system to realize the standardization and intelligentization of all data.
First of all, CEAIR identified specific objectives on the implementation of XBRL:
1) Extend the CEAIR’s CAS taxonomy;
2) Dock the interface between the Oracle ERP system data and the audit report, and extract the part of data automatically;
3) Expand the taxonomy of branch companies and subsidiaries on the basis of CAS, and make the audit report classified by using the technology of XBRL;
4) Conbine the data of branch companies and subsidiary companies, and produce the financial statement data for disclosure to public;
5) Achieve intelligent analysis of financial data for management and help their effective decision-making.
Secondly, the group of CEAIR XBRL project proposed the effective solution on difficulties and obstacles on XBRL research. Following is the specific steps of CEAIR XBRL implementation (as shown in Figure 2).
Figure 2 is the implementation scheme of XBRL in CEAIR. Because of the complex structure of the corporation, there are three different ways in storing data, including ERP system Excel and manual entry. The data in the ERP can be automatically converted into the module of the audit report filling, while some business departments and the subsidiaries who have no ERP system rely on Excel data or manual entry data. After the completion of filling module, it is the step of parsing data and generating XBRL data, and then next step is the module of consolidated financial statements, in which procedure can automatically identify mutual data and summarize them based on XBRL Taxonomy and XBRL extended Taxonomy. For example, procedure can automatically identify the data with the label “Profit for the year” and summarize that data from holding corporation and