the internet encyclopedia volume phần 10 pdf

Kwok, Hong Kong Polytechnic University, China Wireless Technologies and Wireless Marketing 850 Major Services Are Provided by Factors Influencing Adoption of Wireless Mobile Penetration i

W IRELESS I NTERNET 848

Intersymbol interference (ISI) Distortion of the

re-ceived signal due to temporal spreading and

interfer-ence of the transmitted pulses.

Medium access control (MAC) A protocol for ensuring

that the common wireline/wireless medium is shared

nicely among many potential users.

Node A device on the network, such as a workstation or

a router.

Roaming The ability to establish and maintain wireless

connection outside the home area of the user.

Router A device that performs routing.

Routing The process of moving packets from the source

to the destination in a network.

Routing table A list in the router that matches the

des-tination IP addresses to the physical ports that lead to

the optimal path to the destination.

Short messaging service (SMS) A service available on

many cellular networks that enables near real-time

transmission of short text message among the

sub-scribers.

SIP A signaling protocol used to set up and control

in-teractive applications over the Internet.

Tunneling The process of transporting encapsulated

data packets through foreign networks that may be

us-ing different network protocols.

Voice over IP (VoIP) A service that delivers voice

com-munication over the Internet using IP.

World Wide Web (WWW) A large group of servers on

the Internet that uses HTTP to transport files and

doc-uments, often formatted using HTML.

CROSS REFERENCES

See Mobile Commerce; TCP/IP Suite; Voice over Internet

Protocol (IP); Wireless Application Protocol (WAP).

REFERENCES

3GPP TS 23.040 (2002, April) Technical realization of the

short message service (SMS), version 4.6.0.

3GPP TS 23.140 (2002, April) Multimedia messaging

service (MMS); functional description; stage 2, version

4.5.0.

Aboba, B., & Simon, D (1999, October) PPP EAP TLS

authentication protocol (RFC 2716).

Bakre, A., & Badrinath, B (1995, May) I-TCP: Indirect

TCP for mobile hosts In Proceedings of the 15th IEEE

International Conference on Distributed Computing

Sys-tems (pp 136–143) New York: IEEE.,

Balakrishnan, H., Seshan, S., & Katz, R.H (1995,

Decem-ber) Improving reliable transport and handoff

perfor-mance in cellular wireless networks ACM Wireless

Net-works, 1(4), 469–481.

Bender, P., Black, P., Grob, M., Padovani, R.,

Sind-hushayana, N., & Viterbi, A (2000, July) CDMA/HDR:

A bandwidth efficient high speed wireless data service

for nomadic users IEEE Communications Magazine,

38(7), 70–77.

Bingham, J A C (1990, May) Multicarrier modulation

for data transmission: An idea whose time has come.

IEEE Communication Magazine, 28(5), 5–14.

Black, U (1997) ISDN and SS7: Architecture for

digi-tal signaling networks Englewood Cliffs, NJ: Prentice

Hall.

Blake, S., Black, D., Carlson, M., Davies, E., Wang, Z., &

Weiss, W (1998, December) An architecture for entiated service (RFC 2475).

differ-Borisov, N., Goldberg, I., & Wagner., D (2001, July) tercepting mobile communications: The insecurity of

In-802.11 In Proceedings of the 7th International ence on Mobile Computing and Networking (pp 180–

Confer-189) New York: ACM SIGMOBILE.

Braden, R., Clark, D., & Shenker, S (1994, July) Integrated services in the Internet architecture: An overview (RFC

1633).

Brady, P T (1971, January) Effects of transmission lay on conversational behavior on echo-free telephone

de-circuits Bell Technical Journal, 50(1), 115–134.

Brewer, E A., Katz, R H., Chawathe, Y., Gribble, S D., Hodes, T., Nguyen, G., et al (1998, October) A network architecture for heterogeneous mobile computing.

IEEE Personal Communications Magazine, 5(5), 8–

24.

Brown, K., & Singh, S (1997, October) M-TCP: TCP for

mobile cellular networks ACM Computer tion Review, 27(5), 19–43.

Communica-Caceres, R., & Iftode, L (1995, June) Improving the performance of reliable transport protocols in mobile

computing environments IEEE Journal on Selected eas in Communications, 13(5), 850–857.

Ar-Cai, J., & Goodman, D J (1997, October) General packet

radio service in GSM IEEE Communications zine, 35(10), 122–131.

Maga-Deering, S., & Hinden, R (1998, December) Internet tocol, version 6 (IPv6) (RFC 2460).

pro-De Vriendt, J., Lain´e, P., Lerouge, C., & Xu, X (2002, April) Mobile network evolution: A revolution on the

move IEEE Communications Magazine, 40(4), 104–

Berners-GSM Association Retrieved April 8, 2003, from http:// www.gsworld.com

Haartsen, J (1998) Bluetooth—The universal radio

inter-face for ad hoc, wireless connectivity Ericsson Review, 75(3), 110–117.

Hedrick, C (1988, June) Routing information protocol

(RFC 1058).

Heijenk, G., Karagiannis, G., Rexhepi, V., & Westberg,

L (2001, September) DiffServ resource management

in IP-based radio access networks Paper presented at

the 4th International Symposium on Wireless Personal Multimedia Communications, Aalborg, Denmark.

Hinden, R (1993, September) Applicability statement for the implementation of classless inter-domain routing (CIDR) (RFC 1517).

Honkasalo, H., Pehkonen, K., Niemi, M T., & Leino, A T (2002, April) WCDMA and WLAN for 3G and beyond.

IEEE Wireless, 9(2), 14–18.

R EFERENCES 849

How to make money on mobile services (2002) Strand

Consult Publications Retrieved May 13, 2003, from http://www.strandreports.com/sw494.asp

Huitema, C (2000) Routing in the Internet (2nd ed.)

En-glewood Cliffs, NJ: Prentice Hall.

Instant messaging more popular than ever at work (n.d.).

Retrieved May 13, 2003, from messangers.com/site/news/im more popular than ever.

http://www.instant-htm Institute of Electrical and Electronics Engineers (1999).

Wireless LAN medium access control (MAC) and cal layer (PHY) specifications, IEEE 802.11.

physi-Institute of Electrical and Electronics Engineers (2001).

IEEE 802.1X—Port based network access control.

ITU-T Recommendation Q.1701 (1999) Framework for

IMT-2000 networks.

Jakes, W C (1993) Microwave mobile communications.

New York: IEEE Press.

Lu, W W (Ed.) (2002, March) Fourth-generation

mo-bile initiatives and technologies IEEE tions Magazine, 40(3), 104–145.

Communica-Lu, W W., & Berezdivin, R (Eds.) (2002, April)

Tech-nologies on fourth generation mobile communications

[Special Issue] IEEE Wireless Communications, 9(2).

Mahonen, P., & Polyzos, G C (2001, December)

Eu-ropean R&D on fourth-generation mobile and

wire-less IP networks IEEE Personal Communications, 8(6),

6–64.

Mathis, M., Mahdavi, J., Floyd, S., & Romanow, A (1996,

October) TCP selective acknowledgement options (RFC

Mouly, M., & Pautet, M B (1992) The GSM system for

mobile communications, Palaiseau, France: Cell & Sys.

Moy, J (1998a) OSPF anatomy of an Internet routing

pro-tocol Reading, MA: Addison-Wesley.

Moy, J (1998b, April) OSPF Version 2 (RFC 2328).

Nielsen/NetRatings First Quarter 2002 Global Internet

Trends report (2002) Retrieved May 9, 2002, from http://www.nielsen-netratings.com/pr/pr 020509 eratings.pdf

Perkins, C (1996, October) IP mobility support (RFP

2002).

Perkins, C (1997) Mobile IP: Design principles and

prac-tice Reading, MA: Addison Wesley.

Postel, J (1980, August) User datagram protocol (RFC

768).

Postel, J (1981a, September) Internet protocol (RFC 791) Postel, J (1981b, September) Transmission control proto- col (RFC 793).

Postel, J., & Reynolds, J (1985, October) File transfer tocol (FTP) (RFC 765).

pro-Raggett, D., Le Hors, A., & Jacobs, I (1999) HTML 4.01 specification, W3C recommendation.

Rekhter, Y., & Li, T (1993, September) An architecture for

IP address allocation with CIDR (RFC 1518).

Rekhter, Y., & Li, T (1994, July) A border gateway protocol

4 (BGP-4) (RFC 1654).

Rosen, E., Viswanathan, A., & Callon, R (2001, January).

Multiprotocol label switching architecture (RFC 3031).

Schulzrinne, H., Casner, S., Frederick, R., & Jacobson, V.

(1996, January) RTP: A transport protocol for real-time applications (RFC 1889).

Simpson, W (1994, July) The point-to-point protocol (PPP) (RFC 1661).

Sklower, K., Lloyd, B., McGregor, G., Carr, D., & Coradetti,

T (1996, August) The PPP multilink protocol (MP)

(RFC 1990).

Telecommunications Industries Association (1991) lular radio-telecommunications intersystem opera- tions, TIA/EIA/IS-41B.

Cel-Telecommunications Industries Association (1993) Mobile-station base station compatibility standard for dual-mode wideband spread spectrum cellular system, IS-95.

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Wireless World Research Forum (2001, December) The book of visions 2001—Visions of the wireless world, Ver- sion 1.0.

Yacoub, M D (1993) Foundations of mobile radio neering Boca Raton, FL: CRC Press.

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reserva-tion protocol IEEE Network, 7(5), 8–18.

Zorn, G (1999, January) PPP LCP internationalization configuration option (RFC 2484).

Wireless Marketing

Pamela M H Kwok, Hong Kong Polytechnic University, China

Wireless Technologies and Wireless Marketing 850

Major Services Are Provided by

Factors Influencing Adoption of Wireless

Mobile Penetration in the United States

Marketing Opportunities and Wireless

Will Wireless (or Mobile) Substitute

What Industries Benefit Most From

What Must Marketers Do to Be a Successful

Merits of Reconfiguring the Value Chain 854

Key Impact of Mobile Number Portability

(MNP) or Wireless Number Portability

Brand Community and Customers’ Loyalty 854

Consumer Decision-Making Process

Real-Time Impacts of the Wireless Internet

Wireless Marketing and Examples of

Wireless technology began its growth in the 1980s and

the rapid development of wireless products such as

mo-bile phone, pagers, and other handheld devices has

trans-formed the ways that people conduct business (Lamont,

2001) Surfing the Web or online services is another way

to get product information and order merchandise from

catalogs Firms can quickly update information at

min-imum “costs” (Boone & Kurtz, 2001, p 25).

During the mid-1990s, the Internet became the main

online direct-marketing channel that allows users to send

e-mail and access public news, product information, and

online shopping activities, among other things (Kotler &

Armstrong, 2001) Nowadays, the development of

high-speed wireless Internet, Web-enabled mobile phone

hand-sets, and other wireless technologies has further sustained

the application direct-marketing or one-to-one marketing

in the wireless business world.

WIRELESS TECHNOLOGIES AND

WIRELESS MARKETING

Advancement in wireless technology such as WAP, iMode,

GSM, GPRS, UMTS, wireless LAN, WCDMA (see Table 1

for details) has enabled marketers to develop more effective and specific marketing (or one-to-one marketing) programs tailored to the needs of individual customers.

To fully utilize these technologies, marketers must learn how to work with their customers to develop long-term mutual benefit relationships Obviously, wireless mar- keting offers new business opportunities and threats to m-marketers Marketers must understand the key dy- namic developments in the wireless world to capitalize on business opportunities at the right time and take proactive strategies to eliminate potential risks.

What Is Wireless Marketing?

Wireless is defined as “radio communications” or a “radio

receiver or transmitter” (Oxford Advanced Learner’s English–Chinese Dictionary, 4th Edition, 1994) Microsoft

Dictionary (1998, available on CD-ROM) defined wireless

as “pertaining to, or characteristics that take place out the use of interconnecting wires or cables, such as

with-by radio, microwave, or infrared.” Marketing is regarded

as “a social and managerial process whereby individuals and groups obtained what they need and want through creating and exchanging products and value with others (Kotler & Armstrong, 2001, p 6) So wireless marketing

850

M OBILE P ENETRATION IN THE U NITED S TATES AND E UROPE 851

Table 1 Summary of Key Wireless Technologies

WAP Wireless application protocol

i-Mode A wireless service launched in Japan in spring 1999 by NTT DoCoMo The

service is accessed by a wireless packet network (PDC-P), and the contents are described in a subset of the hypertext markup language.

GSM Global system for mobile communication

GPRS General packet radio service

UMTS Universal mobile telephone system (third-generation telecommunications

system based on wideband code division multiple access)

Wireless LAN Wireless local access network

WCDMA Wideband code division multiple accessSource: Nokia (http://www.nokia.com)

refers to the exchange process (i.e., buying and selling)

that is carried out by wireless means (e.g., mobile phone,

m-commerce, wireless Internet, or any handheld wireless

devices).

Major Services Are Provided by

Third-Generation Technologies

The advancement in third-generation (3G) technology

brings additional benefits to consumers Multimedia

func-tions of 3G consist of several media components which

allow wireless delivery of video clips, still images, and

music It can be “interactive and distributional” (i.e.,

users may have subscribed to certain distributional

ap-plications, and receive only those subscribed services).

The maximum speeds of GPRS can reach up to

171.2 Kbps faster data transmission speed or download

time So GPRS enables interactive visual display (i.e.,

MMS [multimedia message service]) and enhancing

com-munications quality.

Besides these benefits, 3G technologies deliver the lowing value-added wireless services as well:

fol-1 Internet access (e.g., users can download ring-tones,

music, cartoon characters, real-time events)

2 Location-based application (e.g users can send

promo-tional messages to specific groups of customers)

3 Simple games (e.g., users can play card games and

crosswords)

Factors Influencing Adoption of Wireless

(or Mobile) Internet

The decision-making process is complex, and there is no

perfect formula to explain customers’ purchase behavior.

An industry report published by the International

Tele-communication Union (ITU, 2002a) in September 2002

reported that the adoption of mobile Internet service

might be due to the following factors:

rApplication of mobile multimedia services such as video

clips or still images, video, and music through 3G nologies

tech-rAvailability of Internet-enabled handsets with affordable

in recent years In 2002, the ITU (2002b) indicated the top

20 mobile and Internet markets worldwide (Table 2).

MOBILE PENETRATION IN THE UNITED STATES AND EUROPE

e-Marketer reported the interactive survey conducted by Telephia and Harris (Figure 1) The survey indicates that Greenville had the highest mobile phone’s penetration (i.e., 71%) among 35 major U.S cities by December

2002 It is closely followed by St Louis (69%) Forrester Research study in March 2002 reported that Finland, Norway, Sweden, and Italy have highest mobile penetra- tion (Figure 2).

Marketing Opportunities and Wireless (or Mobile) Internet

An analysis of Internet usage and projections covering more than 50 countries, carried out by Computer Indus- try Almanac in March 2002, reported that there would

be 1.12 billion Internet users worldwide by the end of

2005, and wireless Internet users will reach 48% “The wireless Internet will take off when always-on service and useful content for the small displays of wireless devices are available,” predicts Dr Egil Juliussen, author of the report (Computer Industry Almanac, 2002) Access to the Internet through personal digital assistants (PDAs) with multiple functions (e.g., built-in Internet access, digital camera, music player, and scanner) is expected to increase

in developed countries.

Interestingly, these wireless devices are expected to

be considered the primary devices for Internet access in countries with low Internet penetration rates The report suggests that 41.5% of the worldwide population will use the wireless Internet by 2004 In some developing markets such as the Philippines, the penetration rate of mobile phone services was three times higher than fixed-line penetration at the end of 2001.

W IRELESS M ARKETING 852

Table 2 Top 20 Mobile and Internet Index Rankings,

Worldwide

MOBILE/INTERNET

Note: From the International Telecommunications Union

Mobile/Internet Index included in the Internet for a Mobile Generation

Report The index measures how each economy is performing in terms

of information and communication technologies (ICTs) and captures

how poised the country is to take advantage of future ICT

advancements The index covers 26 variables sorted into three groups:

infrastructure, usage, and market structure These three components

combine for a score between a low of 0 and a high of 100 The table is

taken from the Statistical Annex to the Report, which provides

comprehensive data on network and service development for more

than 200 economies c
International Telecommunications Union

(ITU), 2002 Reprinted with permission

Richter and Mar (2002, p 128) reported a recent

IDC forecast that the estimated average growth of global

spending on information technology (IT) would be about

10 to 11% between 2002 and 2005 The forecast report

showed that the Asia Pacific region has the highest growth

Figure 1: U.S cities with the highest mobile phone

penetra-tion rates, December 2002 Source: Telephia/Harris

Interac-tive, February 2003 c
2003 eMarketer, Inc.

Figure 2: Mobile phone penetration in selected countries

in Europe, fourth quarter 2001 Source: Forrester Research, March 2002 c
2002 eMarketer, Inc.

potential for IT spending (i.e., 11%) compared with other regions Moreover, according to the forecast, extraordi- nary growth of about 30% is expected in countries such

as India, China, Turkey, Egypt, and the Philippines For example, the penetration of value-added services

of short message service (SMS) is popular and ful in the Philippines Although that country has about

success-10 millions subscribers, success-100 millions SMS messages are sent every day In fact, making e-jokes through SMS has become part of Filipino culture The subscribers enjoy circulating e-jokes among themselves In addi- tion, the second-generation handsets are widely avail- able and supported by a competitive pricing strategy (about 2c/ U.S per SMS message) and a simple billing system (Ritcher & Mar, 2002) SMS is simple to adopt and adaptable for low-bandwidth services (i.e., always online).

E-entertainment (i.e., e-music, e-video, interactive

TV, e-gambling, etc.) has been regarded as the main driver behind wireless technologies The demand for e-entertainment service has led to new business oppor- tunities for hardware manufacturers (e.g., mobile phone and components suppliers), service operators, and soft- ware and network suppliers.

Another emerging market is China, where mobile phone service subscribers are expected to exceed fixed- line subscribers by March 2003 Furthermore, China’s cur- rent 5-year plan indicates that telecom service revenues will increase at twice the rate of the gross domestic product.

This implies the growing importance of wireless net services, particularly in those countries with a low In- ternet penetration rate On the other hand, marketers can make use of this opportunity to develop creative wireless

Inter-M- COMMERCE AND M ARKETING 853

marketing strategies to foster customer relationships and

cultivate new business opportunities—at the right time,

in the right place.

Will Wireless (or Mobile) Substitute

Fixed-Line Internet?

Mobile Internet will not be treated as a substitute for the

fixed-line Internet (ITU, 2002a, p 3), although 3G is

con-sidered a global wireless medium This is because mobile

Internet services can be supported by different wireless

technologies such as wireless local area networks (LANs),

short-range connectivity technologies, fixed broadband

networks, and so on From the user’s perspective, the

fol-lowing issues should be taken into considerations:

rDisplay quality is limited by the screen size of mobile

devices.

rFunctions provided by a keyboard are superior to those

of a mobile device keypad.

rFixed-line broadband has brought speedy connection

benefits at reasonable prices.

Nowadays, the majority of display screens provided

by wireless devices (e.g., PDAs and Web-enabled mobile

phones) are too small for viewing long documents such as

a contract or a book chapter In addition, more and more

consumers in developed countries have adopted fixed-line

broadband Internet access services at home For

exam-ple, going online through fixed-line broadband Internet

services at home has become part of the daily lives of

Hong Kong residents Although mobile messages through

SMS and multimedia messaging service (MMS) provide

“instant” and “interactive” benefits, they may not be able

to substitute for land-line access at this time; nonetheless,

they offer other benefits.

M-COMMERCE AND MARKETING

What Industries Benefit Most From

M-commerce?

A new market space has been created by Web-enabled

mo-bile phone services The interactive features, always-on

connections, and tailor-made contents benefit following

industries (Lamont, 2001):

rM-banking (e.g., online stock trading—making

en-quiries and money transfer transactions): M-banking offers convenient and “instant” benefits through both voice and data communications It allows customers to use their mobile phone services for online stock trading, checking balances, making money transfer, and so on anytime and anywhere Security issues have been a key obstacle for influencing consumers’ adoption of mobile- banking services.

rM-entertainment services (e.g., real-time sports, games,

live-entertainment events, entertainment on Internet and music): The unique benefit of “real-time” enables subscribers to enjoy different types of live-entertain- ment services anytime and anywhere.

M-commerce and Information Services

M-commerce is the word used to describe the tion of Internet services or the purchase of goods via a wireless link (Korhonen, 2001, p 433) M-commerce is expected to grow continuously in the coming years Fur- thermore, “everything available via the fixed Internet will also be available via the wireless Internet” (Korhonen,

consump-2001, pp 434–435) Wireless technologies allow speedy and real-time data transmission benefits As a result, information services in m-commerce may apply to the following:

1 Real-time broadcasting services (e.g., on television, radio)

2 Location-based advertisement (e.g., a list of restaurants offering special discounts in a particular location tar- geting specific customers); it is suggested that the list should cover only those restaurants located within half

a kilometer of the location of the handset

3 Purchase of consumer goods through mobile phone handsets

4 Paying for parking through SMS notices (e.g., sending reminders)

5 Conducting transactions with the parking meter ugh Bluetooth technology

thro-Database Marketing in M-commerce

Database marketing can be applied to m-commerce in the following areas (adapted from Kotler & Armstrong, 2001,

p 626):

1 Identify business prospects: Information obtained from enquiries (e.g., through counter services, the In- ternet, e-mail, or mobile phone) and business reply cards enable companies to identify potential customers

as well as business opportunities

2 Deciding which customers should receive a particular offer: Companies can tailor an offer (e.g., sending an e-coupon to a customer through mobile phone) accord- ing to the customer’s preferences and needs.

3 Deepening customer loyalty: Companies can make use

of database information to identify customers’ interest

by discovering their preferences and purchasing terns Furthermore, marketers can please customers

pat-by sending small gifts on special days For example,

a company could send an SMS birthday greeting, a birthday ring-tone download, or a discount e-voucher through mobile phone services before or on the cus- tomer’s birthday.

4 Reactivating customer purchases: A database enables marketers to stimulate sales from potential customers such as replacement of a mobile phone handset, up- grading of a service plan, or purchase of a package or

of complementary mobile phone products or services.

What Must Marketers Do to Be

a Successful M-marketer?

Lamont (2001) proposed several criteria (Table 3) for being a successful m-marketer In sum, m-commerce

W IRELESS M ARKETING 854

Table 3 Criteria for Being a Successful M-marketer

M-MARKETING

Product Introduce miniature information appliances with unique interactive content to

m-commerce customers Price Offer both commodity and higher value for money as marketing managers divide

m-commerce customers into those who do virtually everything online and those who prefer personal services from telecom, content, and financial service providers.

Promotion Provide customers with value-added intangible product attributes that are included

as part of their smart handheld devices For example, e-discount couples and free ring tone downloads

Segmentation Divide like groups of people across national frontiers into those who have the

income, are the correct age, live in the right neighborhoods, and belong to modernizing ethnic groups as candidates for the purchase of miniature information appliances, third-generation telecom services, and interactive Internet content.

Targeting Assemble smaller like groups of people who are bound together by profession,

skills, or personal tastes, habits, or values.

Positioning Match possible online Internet products with probable customers; the former offers

the latter enhanced customer relationships to try out m-commerce and the mobile Internet.

From Conquering the Wireless World—the Age of M-Commerce, by Douglas Lamont, p 279 Oxford, UK: Capstone, 2001.

c

Captsone Publishing Limited (A Wiley Company) UK, 2001 Reprinted with permission.

operators must offer unique, personalized services to their

customers that offer value for the money More important,

m-commerce requires marketers to adopt a proactive

ap-proach and be sensitive to their marketing environment to

pursue new business opportunities in the changing

wire-less world M-marketers have to recognize that the

prod-uct life cycle of portable wireless devices (e.g., PDAs and

mobile phone handsets) is much shorter than it is for other

consumer durables in technology sector.

Merits of Reconfiguring the Value Chain

The term “wireless world” implies global business

per-spectives and death of physical distance, and it offers

con-venience benefits to the services subscribers “Businesses

now have to compete on the basis that the world is a

sin-gle market Under such circumstances, the two keywords

that are expected to lead corporations to a stable growth

are “efficiency” and “creativity” (Richter & Mar, 2002,

pp.142–143) Consequently, marketers need to “create

new value through the wireless Internet services (Lamont,

2001, p 55) Lamont summarized three merits of

recon-figuring the value chain:

1 Firms can recognize and identify decision

opportuni-ties across the industrial world for wireless telecom

services.

2 Firms can create better alternatives for making good

decisions either through alliances and partnerships or

through direct investments (or both).

3 Firms can establish a set of competitive principles for

the firm as they seek to conquer the wireless world in

the age of m-commerce.

WIRELESS CONSUMER BEHAVIOR

Key Impact of Mobile Number Portability (MNP) or Wireless Number Portability (WNP) on Customer Loyalty

The policies of MNP or WNP allow subscribers to carry their existing mobile telephone numbers to other network service providers It enables subscribers to switch service provider more easily Mobile phone subscribers are price sensitive and tend to keep on seeking service packages of- fering better value for money This has had a significant impact on customer loyalty and churn rate Marketers have to put more effort into cultivating customer loyalty and building long-term customer relationship to prevent high churn rate Obviously, it costs companies more to acquire new customers than to keep their existing ones Unfortunately, MNP may disrupt subscribers’ privacy when telemarketing calls are received through mobile phones As a result, m-marketers need to consider per- mission marketing seriously and develop a strategy for pursuing consistent branding image to establish a brand community for fostering customer loyalty and reinforcing customer relationship.

Brand Community and Customers’ Loyalty

Brand community exists because “brands connect sumers to brands, and consumer to consumer” (Muniz

con-& O’Guinn (2001, p 418) These social groups have a high propensity to be reasonably stable and devoted

to the brand Furthermore, members of a brand munity tend to be “committed,” “conscientious,” and

com-“passionate” toward the brand (Gruen & Ferguson, 1994).

W IRELESS C ONSUMER B EHAVIOR 855

Consequently, it facilitates marketers to strengthen their

branding strategies because the Web enable firms to

communicate instantly with each customer.

Consumer Decision-Making

Process for Wireless

Adoption of wireless services can be divided into five

stages (Steuernagel, 1999):

1 Awareness stage—information obtained from

televi-sion advertisement, mass media, observation of users.

2 Interest stage—attention and interest are stimulated by

multiple exposures to users and ads.

3 Evaluation stage—perceived benefits (e.g., job or

lifestyle, emergency, security), making enquiries for different models of handsets.

4 Trial stage—through friends or promotional

demon-strations.

5 Adoption stage—customer adopts wireless service and

continues tracking the cost—benefit relationship of the adoption.

Segmentation Variables for Wireless

Consumer Markets

Three major segmentation variables have been identified

for wireless consumer markets (Lamont, 2001):

1 Demographic—generation (e.g., Generation Y),

in-come groups (e.g., high disposable inin-come groups who can afford to pay for the wireless services), occupation (e.g., professional athletes).

2 Psychographic—lifestyle (e.g., high mobility, enjoying

high-tech life, people who prefer to do everything line), personality (e.g., personal value).

on-3 Behavioral—benefits (e.g., seeking speed, convenient

services, etc.), loyalty (through brand community).

Permission Marketing and Customer

Relationship

Godin and Peppers (1999) indicated the merit of

per-mission marketing is that it allows both parties to

en-joy “mutually beneficial dialogue” without worrying about

the privacy and legal issues “Permission Marketing has

been around forever (or at least as long as dating), but

it takes advantage of new technology better than other

forms of marketing The Internet is the greatest direct mail

medium of all time, and the low cost of frequent

interac-tion makes it ideal for Permission Marketing” (Godin &

Peppers, p 51) Wells, Burneet, and Moriarty (2003, p 23)

documented that this concept because many advertising

messages are regarded as interruptive As a result,

per-mission marketing should be taken seriously as a means

to foster good customer relationships and “mutually

bene-ficial dialogue.” This concept includes the following three

cus-Participation Marketing and Customer Relationship

This concept goes beyond permission marketing, ing to Alan Rosenspan (2000), an expert in direct market- ing It covers the following five principles (as cited in Wells

accord-et al., 2003, p 24):

1 You really understand your customers (i.e., needs and preferences), for example, by collecting feedback from customers through marketing research, internal sales team, enquires, and customers’ complaints.

2 You provide feedback at every opportunity (i.e., to show your concern and customer care), for example, by mak- ing a call to seek subscribers’ opinions of new value- added services.

3 You involve customer and prospects as much as sible (i.e., stimulate customers’ participation to build loyal customers, e.g., inviting customers to participate into charity events or public relations activities.

pos-4 You market on customers’ schedules, for example, by making promotional offers, such as sending coupons

or e-gifts (e.g., free download services) on customers’ birthdays.

5 You make customers feel vested in your success.

Ethical and Privacy Issues in Wireless Marketing

Similar to wired marketing (i.e marketing activities ducted through fixed telephone lines), wireless marketing can annoy and interrupt customer’s privacy Ethical and privacy issues (e.g., irritation, fraud, invasion of personal privacy) should be taken into consideration when develop- ing the marketing strategies to foster long-term customer relationships Some examples of ethical and privacy issues that can arise in the mobile environment are as follows:

con-1 Irritation—sending out too many, too long SMS tional or advertising messages to potential customers for pursuing location marketing strategies.

promo-2 Fraud—making false claims such as “today is the last day for the special offer” when it actually isn’t, over- charging customers on their bills, giving “misleading”

W IRELESS M ARKETING 856

or “unclear” product information to potential

cus-tomers.

3 Invasion of personal privacy—conducting

telemarket-ing activities too early in the morntelemarket-ing or too late at

night, disclosing personal data to a third party for

com-mercial or fundraising purposes.

Consequently, the concept of permission marketing

should be encouraged and cultivated throughout the

or-ganization In fact, companies need to set good practices

and an effective system to monitor these consumer issues.

Consumer Protection

Wireless technologies have gone through a significant

development period; however, the legal protection for

m-commerce is still in its infancy From an e-commerce

perspective, OECD’s (Organization for Economic

Co-operation and Development) Consumer Protection

Guide-lines for e-Consumers (December, 1999) has indicated

clearly about the possible consumer legal protection for

e-commerce The guidelines attempt to draw government,

business bodies and consumer groups’ attention for

devel-oping national and global awareness of consumer

protec-tion laws.

An ITU report (2002a), published in September 2002,

proposed the creation of special legal protection for

mobile consumers for the following reasons (OECD’s

guidelines can be regarded as a foundation for the legal

protection of m-commerce):

1 Mobile devices are classified as high-speed terminals.

2 Users of mobile devices are numerous and always have

limited usage experience.

3 Users usually have limited technical and legal

knowl-edge of m-commerce.

4 The display screen for display on mobile devices is

limited (it is difficult to display contract details).

5 Mobile devices have limited keypad functions (e.g.,

absence of “cancel” or “undo” keys) for making

cor-rections.

MARKETING MIX FOR WIRELESS

Product

Product Characteristics

Lamont (2001) suggested that marketers should make use

of brand name to differentiate themselves from their

com-petitors He also has identified the following product or

service characteristics for wireless industry:

rEffective mobile devices should have interactive and

instant features with unique content through wireless

Internet This content should be created for a particular

mobile device (e.g., PDA or mobile phone).

rSMS (the “killer application” for mobile phones), MMS

services, m-sports, m-commerce, m-entertainment, and

m-banking are expected to be the major value-added

services for mobile devices.

rNew products develop on mini handsets and handheld

mobile devices such as Web-based phones, WCDMA,

and GPRS (“always on connection”).

New Product Attributes in M-commerce

Dynamic wireless technology has changed the ways that people conducting their business, it also influences con- sumers’ daily lives and their consumption behavior The following summary of new product attributes for the wire- less products and services is adapted from Lamont (2001,

p 48–49) Wireless devices can or soon will be able to

rfind a parking space for your car,

rsearch for the best bargains for your family (e.g., where

to eat and shop),

rtransfer medical records to your physician,

rpermit mothers to breast-feed their babies on time and

at work,

rscan inventory and close a sale,

rdownload music recommended by your friends,

rchat with your friends,

rread your e-mail,

rpay bills while you commute to the city,

rtransfer funds from your checking to your savings account,

rarrange travel and other services,

rconduct banking services (e.g., enquiries, transfer ment),

pay-rwatch entertainment programs (e.g., sports),

rtake photos, and

rlisten to the radio.

Price

In the early days of widespread Internet use, an initial pricing strategy for the fixed-lined Internet was charged according to time spent online Later, flat-rate schemes

or plans for different user groups were offered Pricing for mobile (or wireless) Internet use is expected to follow the pattern of the fixed-line Internet (ITU, 2002a) Today subscribers are charged according to their rate of con- sumption (i.e., per minute) to browse the wireless Inter- net Unfortunately, the wireless industry is competitive, and marketers cannot control their prices Customers play

a more active role in influencing the pricing strategies of wireless industry because of a high level of transparency

in the wireless business world.

Pricing 3G

There are different types of services provided by 3G bile devices, such as data services and real-time Internet game applications, so the billing system is more complex than it was 2G devices It is expected that different tariffs will be adopted because some wireless services such as e-mail can accept delay, but other services such as Inter- net game applications cannot As a result, managers need

mo-to consider what happens if a real-time Internet game plication suffers from lower service quality because of net congestion, for example A billing system must be able

ap-to solve this kind of problem auap-tomatically (Korhonen, 2001) Above all, Lamont (2001) indicated that customers needed to be educated about the merits of the wireless Internet (e.g., anytime, anywhere, voice and data com- munications) to ensure that potential customers of 3G are

M ARKETING M IX FOR W IRELESS 857

willing to pay for different service rates and a smart billing

systems is developed to solve some basic technical

prob-lems of Internet surfing (e.g net congestion).

Prepaid Versus Postpaid

A prepaid concept is defined as customers who do not

have subscriptions with a mobile operator but buy

air-time for their SIM (Subscriber Identity Module) cards in

advance and then use the phone as long as there is credit

in their accounts When their airtime runs out, they

pur-chase more (Korhornen, 2001) SIM card is a small chip

card kept inside a mobile phone It serves as a network

ac-cess card and it is similar to a tiny computer It provides

storing capacity for phone numbers, text messages, and

value-added services The advantages of prepaid service

for the provider are as follows:

rThere is no need to carry out a credit check on new

customers.

rCustomers with imperfect credit information can adopt

mobile phone service under the prepaid scheme.

rThere is no need to bill prepaid customers.

rCustomers may never uses the services they pay for.

The advantages of prepaid service for users are as follows:

rUsers remain anonymous in prepaid (hardware and

soft-ware operators).

rUsers have more freedom to decide where to buy a

hand-set and SIM.

rThere is no contract arrangement, and customers have

more freedom to switch network operators.

rThere is no monthly subscription charge, so light users

can be attracted (e.g., keeping a mobile device for gency purpose only).

emer-rIt is an efficient way for customers to control costs

(automatically limits their phone service usage).

Disadvantages of prepaid service for the provider are the

following:

rFrom the operators’ perspective, there are security

prob-lems, because it is difficult to identify fraudulent users.

rThe anonymous nature of prepaid service does not allow

marketers to employ data mining or database marketing techniques (cannot identify their needs and characteris- tics).

The disadvantages of prepaid service for the customer are

the following:

rPrepaid calls are more expensive than postpaid SIMs.

rPrepaid service may have an expiration date (unused

airtime cannot be carried forwarded).

In Finland, the network usage is relatively sive, and thus the prepaid with no monthly fee would not

inexpen-offer any particular benefit Consequently, the demand

for the prepaid is limited in that country In Italy and

Portugal, however, some operators have more than 80 prepaid scheme customers.

Distribution or Sale Channels

As discussed earlier, the wireless Internet is not going to replace fixed-line Internet in the immediate future, so the wireless distribution channel is regarded as a supplemen- tary to existing sales channels (e.g., it could be applied

to internal direct sales force, dealers, retailers, and direct marketing, etc.) Direct marketing is covered in more de- tail in the Promotion section.

Internal Sales Force—Telemarketing

The internal sales team of service providers can pursue telemarketing to individual potential customers Suffi- cient training and retraining programs must be provided

to all sales people to carry out effective telemarketing tivities, however In addition, motivation programs (e.g., incentives, commission, or bonus schemes) for rewarding outstanding salespeople and employees should be consid- ered and integrated into the company’s policies.

ac-Middleman (e.g., Dealer, Retailers)

Service providers use middleman to attain a wider age of the marketplace The middlemen play an important role in facilitating business transactions for both business and consumer markets.

cover-Good channel relationship management is a key sue for pursuing success in channel management To eliminate channel conflicts, however, the m-channel (mo- bile channel) should only be considered a supplementary mode to the traditional channel of distribution Generally speaking, the channel of distribution can be divided into intensive, exclusive, and selective distribution Because mobile phone service is perceived as a commodity, inten- sive distribution (i.e., as many outlets as possible; Kotler

is-& Armstrong, 2001) should be considered.

Promotion

There are several promotional mix tools used in marketing strategy With respect to m-commerce, advertising, public relations, and direct marketing are recommended.

SMS Advertising

SMS refers to the short message services provided by mobile network providers SMS allows m-marketers to send electronic coupons and customized promotional messages to individual customers Advisor.com (2002, Document No 09546) reported a recent global study by HPI Research Group (marketing specialists) on the be- half of Nokia showing that a majority (88%) of customers like this mobile advertising method (i.e., sending advertis- ing messages or e-coupons via SMS) The study covered

11 countries including Brazil, Denmark, Germany, Italy, Japan, Korea, Singapore, Spain, Sweden, the United Kingdom, and the United States.

Public Relations

Service providers can use public relations to build brand

or corporate image Public relations is defined as ing good relations with the company’s various publics

“build-W IRELESS M ARKETING 858

Table 4 Real-Time Impact of Wireless Internet on the 4 Ps of Marketing

PRODUCT Real-time wireless Internet transactions force products to become commodities,

core assets to become peripheral, and valuable assets to become loss leaders.

Recognize that goods and services from wireless content providers tend to be the same in the minds of the buyers Marketers must create competitive transparency to succeed.

PRICE Real-time m-commerce transactions base prices on demand at the time of sale, and

these prices change continuously Deliver the lowest possible prices and minimum transactions costs for goods and services from content providers.

Users demand this competitive pricing structure in return for maximum purchases Marketers must establish financial nakedness to succeed.

PLACE Real-time wireless Internet transactions give all sellers power in the channel of

distribution Provide the maximum number of suppliers and minimum inventory levels Customers insist on success in fulfillment or the delivery of accurate orders Marketers must put in place distribution exposure.

PROMOTION Real-time m-commerce transactions push well-established brands out of the

market and into the dead brands society Increase marketing openness as the norm for customers who want promotion and advertising to provide information rather than new entry barriers Marketers must convert traditional push

advertising to pull promotions that are targeted to specific individuals through permission marketing.

From: Conquering the Wireless World—the age of m-commerce, by Douglas Lamont, 2001, p 28 Oxford, UK: Capstone.

c

Captsone Publishing Limited (A Wiley Company), UK, 2001 Reprinted with permission.

by obtaining favorable publicity, building up a good

cor-porate image, and handling rumors, stories, and events”

(Kotler & Armstrong, 2001, p 512).

Public relations consists of different types of

promo-tional activities such as press releases for launching new

products or services and holding charity events, seminars,

or conference activities Customers tend to believe news

from public relations’ events or activities more than they

believe advertising messages As a result, an effective

pub-lic relations program enables a company to build a good

corporate image in a cost-effective manner Obviously, it

also allows marketers to strengthen customer

relation-ships through interactions with existing and potential

cus-tomers.

Direct Marketing

There are five major tools in direct marketing: (a) direct

mail, (b) catalogs, (c) telemarketing, (d) direct-response

advertising (Wells et al., 2003, p 407), and now (e) the

Internet The wireless technologies help marketers to

col-lect more detailed information about their customers’

needs and buying behavior Thus, it enables marketing

to tailor-made direct marketing strategies based on

cus-tomers’ individual’s needs Direct marketing tools include

the following:

1 Direct mail—SMS and MMS through mobile phones.

2 Catalogs—e-catalogs provided in Web pages, SMS, or

m-coupons of promotional offers sent through mobile

phones.

3 Telemarketing (message must be simple)—call

cus-tomers directly through mobile phone for information

promotional offers.

4 Direct-response advertising (to obtain action-oriented

objectives)—interactive advertising messages hosted in

m-commerce or the wireless Internet, which are sent directly to customers through mobile phone.

In addition, service providers may apply either push or pull promotion strategies for to pursue their promotional objectives (e.g., to create a level of awareness) Kotler and Armstrong (2001, p 531) defined the two strategies as follows:

Push strategy is a promotion strategy that calls for using the sales forces and trade promotion to push the prod- uct through channels.

Pull strategy is a promotion strategy that calls for ing a lot on advertising and consumer promotion to build up consumer demand, which pulls the product through the channels.

spend-Real-Time Impacts of the Wireless Internet

on the Four Ps of Marketing

Lamont (2001) summarized the “real-time” impact of wireless Internet on the Four Ps of marketing (product, price, place, promotion) as detailed in Table 4.

Wireless Marketing and Examples

of Business Models

Companies adopt different business models based on their strengths and their market situations The follow- ings are some examples of business models for wireless marketing:

1 Focus on every opportunity for generating revenues from wireless portal InfoSpace is considered as a very successful wireless portal It generates revenues

(b) Merchants are required to pay for a percentage (about 2–25%) for each business transaction gen- erated from the wireless portal.

(c) Wireless providers are obliged to pay a subscriber, per month fee.

per-2 Keep brand identity in wireless portal The service

provider is free to negotiate with content providers and merchants who are shown on its portal as long as they agree to carry the brand name in their contents Cur- rently, Rupp (2002) reported that BT (British Telecom) has adopted this business model, and it seems to be successful in terms of reducing churn rate (the rate at which subscribers stop using the service) and enhanc- ing ARPU (average revenue per user).

3 Charging for contents “The business model based

on paid content is simple and transparent—content providers know what they want and what revenues they will get,” said Eden Zoller, the Senior Analyst of Ovum (Fricke, 2001) This is because subscribers are expected

to pay for the content, which has perceived value, personalized and suitable for the reception by their mobile devices such as PDAs or Web-enabled mobile phones.

1 Traffic levels within the network (traffic load on the

radio interface and the utility of resources within the network nodes).

2 Verification of the network configuration (verifications

are based on fact findings).

3 Resource-access measurements (at regular time

inter-vals across the network).

4 Quality of service (QoS; attributes as experienced by

subscribers).

5 Resource availability (availability of the chosen

re-sources at different phases of the life cycle of the system).

The performance-measurement reports are expected to produce at a particular frequency known as the granular-

ity period Measurement samples are collected during the

granularity period The results can be kept in the local

net-work entity as files or sent to the concerned parties all at

once The network manager can access these files

when-ever he or she wants to Finally, data must be presented

to the configuration-management application.

In addition, it is necessary to have a strong system of fraud management for detecting and preventing fraud in

mobile telecommunication networks (Korhonen, 2001)

to ensure that quality wireless services are provided to customers.

Marketing Effectiveness and Efficiency Measures

Steuernagel (1999, p 106) defined the effectiveness and efficiency as follows:

1 “Effectiveness is the degree to which the marketing process—advertising, sales channels” converts poten- tial targets into customers There are many way to mea- sure it, such as

(a) revenue versus sales expense, (b) customer gain versus sales expense, (c) revenue versus marketing expense, (d) customer gain versus marketing expense, (e) store traffic or lead generation versus advertising expense,

(f) customer satisfaction (e.g., overall satisfaction, monthly statement clarity, missed or error calls over the past 30 days, etc.), and

(g) customer churn.

2 “Efficiency is a measure of long-term revenue versus the total cost to get and keep the customer—the ra- tio of unit output to input.” It may cover the following measures:

(a) increase in revenue, (b) gross sales per salesperson (vs peers in the same channel),

(c) leads and sales generated by promotional paigns, and

cam-(d) expected revenue per customer divided by the sales and marketing.

LOOKING AT FUTURE

The following represent future challenges for wireless marketers:

rCustomer churn rate,

rWireless consumer applications,

rBilling challenges for GPRS, and

rThe rise of the application service provider (ASP), which offers cost savings.

To be successful in the dynamic wireless business, it

is necessary for marketers to “work closely with other company departments to form an effective value chain that serves the customer” (Kotler & Armstrong, 2001,

p 677) A value chain involves commitments from various departments of an organization—for example, product design, production, marketing, logistics, and delivery—to

W IRELESS M ARKETING 860

perform value-creating activities The success of a

com-pany’s value chain depends on the performance of various

departments and how well these activities are coordinated

(Kotler & Armstrong, p 677).

In summary, customers are always the center of all

marketing activities in m-commerce A firm’s capabilities

and its adaptation for value creation based on customer

information are vital to sustaining long-term success.

“Customers become data Then data become customers.

Finally, both customers and data migrate to real time”

(Lamont, 2001, p 58) Marketers must carefully examine

the best ways to work with their customers; they must

know how to use the collected data better than their

com-petitors to create more value for customers.

GLOSSARY

Always-on service A 24-hour service supported by

GRPS that allows wireless subscribers access to

value-added services anytime and anywhere.

Anonymous Nondisclosure of personally identifiable

information

Brand community A group whose members have a

par-ticular brand preference and are grouped together to

form a brand community Members of this social group

are committed to the brand and are willing to share and

exchange information.

Churn rate A measure for the percentage of subscribers

who switch from one mobile phone service provider to

an alternative provider.

Consumer market The business environment in which

individual end users purchase goods or services for

their personal or household use.

Customer needs Human needs (e.g., basic needs for

food and shelter) that are not conceived by marketers.

Customer loyalty A factor used to describe a

con-sumer’s faithfulness in a particular brand or store A

loyal customer is one who has a preference for a

par-ticular brand or store without considering the

alterna-tives Marketers differ on how this loyalty can be

mea-sured.

Data mining A method for discovering patterns and

meaningful relationships of customers’ buying

behav-ior from a data bank

Database marketing A process that involves

establish-ing and updatestablish-ing customer information into a data

bank Marketers use the information provided to

de-cide how and when to contact the consumer for

mar-keting activities, such as a sales promotion.

Direct marketing A method of distribution in which

sellers contact potential buyers through direct

commu-nication channels (e.g., e-mail) seeking customers’

re-sponses (e.g., seeking more information, making a trial

purchase).

E-tailing (electronic retailing, e-retailing) A form of

di-rect marketing in which all business transactions are

arranged through electronic means such as the

Inter-net and cellular phones.

Lifestyle The ways that a consumer spends his or her

time and money.

One-to-one (1:1) marketing Designing and

im-plementing the marketing mix (product, price,

distribution, and promotion) for the individual buyer It relies on extensive information about each purchaser’s buying needs and behaviors.

Push promotion A traditional promotional method in business-to-business market Manufacturers offer dis- counts or incentives to a wholesaler or retailer to push their products to end users (or final consumers).

Pull promotion Manufacturers focus all their tional efforts (e.g., promotional discounts or compli- mentary gifts) to attract end users or final consumers who buy their products Under this structure, final cus- tomers would request the products from retailers Re- tailers will order the products from the manufacturers

promo-to meet expressed consumer demand.

Segmentation An important concept in marketing Market segmentation divides the market into small, mutually exclusive groups Each segment consists of customers with similar needs, characteristics, and buy- ing behavior Different marketing strategies (i.e., prod- uct, price, place [or distribution], and promotion) are required for targeting different segments because their needs are different Firms can select one or more seg- ments to target based on their strength and resources.

Supplementary channel An additional channel to isting distribution or sales outlets for selling products

ex-to cusex-tomers or end user.

Telemarketing A kind of direct marketing method in which sellers use telephone calls to sell a product or service to an individual customer.

Value chain A management tool to identify methods for generating more customer value.

CROSS REFERENCES

See Consumer Behavior; Marketing Communication Strategies; Personalization and Customization Technolo- gies; Value Chain Analysis.

REFERENCES

Advisor.com (2002, April 2) Mobile marketing: sumers say, “Bring it on!” (Marketing Advisor zone, Doc No 09546) Retrieved November 20, 2002, from http://advisor.com

Con-Boone, L E., & Kurtz D L (2001) Contemporary ing (10th ed.) Forth Worth, TX: Harcourt College.

market-Computer Industry Almanac (2002, March 21) Internet users will top 1 billion in 2005, wireless Internet users will reach 48% in 2005 (press release) Retrieved November 22, 2002, from http://www.c-i-a com/pr032102.htm

e-Marketer (2003) Mobile penetration in the US and Europe Retrieved February 13, 2003, from http://www emarketer.com/news/article.php

Fletcher, J (2000, August 14) InfoSpace looks to wireless

for exponential growth eCommerce Business, p 14.

Fricke, P (2001, August 22) Study: charging for

con-tent lead to wireless success CommWeb.com Retrieved

October 18, 2002, from http://www.commweb.com/ article/COM20010822S0003

Godin, S., & Peppers, D (1999) Permission ing: Turning strangers into friends, and friends into customers New York: Simon & Schuster.

market-F URTHER R EADING 861

Gruen, T., & Ferguson, J M (1994) Using

member-ship as a marketing tool: Issues and applications In

N Jagdish & A Parvatoyar, Relationship marketing:

Theory, method, and application (pp 60–64) Atlanta,

GA: Center for Relationship Marketing, Roberto C.

Goizueta Business School, Emory University.

International Telecommunication Union (2002a,

Septem-ber) ITU Internet report: Internet for a mobile generation—executive summary Retrieved October

28, 2002, from http://www.itu.int/osg/spu/publications/

sales/mobileinternet/execsumFinal.pdf International Telecommunications Union (2002b) Hong

Kong (China) and Denmark top ITU Mobile/Internet Index (press release) Retrieved February 8, 2003, from http://www.itu.int/newsarchive/press releases/2002/20.

html

Korhonen, J (2001) Introduction to 3G mobile

communi-cations Boston: Artech House.

Kotler, P., & Armstrong, G (2001) Principles of marketing

(9th ed.) Upper Saddle River, NJ: Prentice Hall.

Lamont, D (2001) Conquering the wireless world—the age

of m-commerce Oxford, UK: Capstone.

Muniz, A M., Jr., & O’Guinn, T C (2001) Brand

commu-nity Journal of Consumer Research, 27,412–432.

OECD (1999) The guidelines for consumer protection in

the context of electronic commerce Retrieved April 18,

2003, from http://www.oecd.org/pdf/M00000000/

M00000363.pdf

Oxford Advanced Learner’s English-Chinese Dictionary (4th

ed.) (1994) Oxford, UK: Oxford University Press.

Richter, F.-J., & Mar, P C M (2002) Recreating Asia—

vision for a new century In World Economic Forum— committed to improving the states of the world Singa-

pore: Wiley.

Rosenspan, A (2000, June) Participation marketing.

Direct Marketing, pp 54–55.

Rupp, W T (2002, July–August) Mobile commerce: New

revenue machine or black hole? Business Horizon,

International Telecommunications Union (2002c, cember 9) Telecom Asia 2002 Show Special adver-

De-tising section Business Week (Asian ed.) pp 36–

52 Lamont, D (1997) Salmon day: The end of the beginning for global business Oxford, UK: Capstone.

Shama A (2001, September–October) E-coms and their marketing strategies Business Horizons, pp 14–20.

862

XBRL (Extensible Business Reporting Language):

Business Reporting with XML

XBRL (Extensible Business Reporting Language):

Business Reporting with XML

J Efrim Boritz, University of Waterloo, Canada Won Gyun No, University of Waterloo, Canada

XML: A New Paradigm for Internet Documents 863

SGML (Standard Generalized Markup

Appendix B: For More Information Related

Since Pacioli defined the double-entry bookkeeping

sys-tem in his 1494 book, Summa de Arithmetica,

Geome-tria, Proportioni et Proportionalita, there have been many

new developments in accounting, and these continue

to-day in response to the demands of business and other

organizations, and users Accounting has contributed

to economic prosperity and will continue do so in the

future Indeed, with the explosion of interest in

communi-cating business information over the Internet, the recent

initiative to create and implement an XBRL (Extensible

Business Reporting Language) promises to dramatically

enhance the speed and ease of information exchange for

enhanced analysis and decision making In this chapter,

we trace the development of XBRL, from its conceptual

origins in SGML and XML, providing examples of its

ap-plication to financial information, including illustrations

of the steps involved in creating an XBRL document An

appendix provides a detailed illustration of the steps

in-volved in creating an XBRL document We conclude with

a summary of the benefits and limitations of XBRL.

XML: A NEW PARADIGM FOR

INTERNET DOCUMENTS

Today, most B2B (business-to-business) and B2C

(business-to-commerce), and many P2P

(person-to-person), interactions involve the exchange of

informa-tion over the Internet In fact, the empowerment of

information providers to easily and cheaply distribute

electronic documents via the Internet has fueled the tonishing growth of the World Wide Web (henceforth, the Web) Today, most documents on the Web are stored and transmitted in HTML (HyperText Markup Language), the Web’s lingua franca HTML is a simple language that was developed to provide hypertext and multimedia functions for the Internet However, as documents on the Web have grown larger and more complex, information providers have begun to encounter limitations in the functionality

as-of HTML attributable to its lack as-of extensibility, ture, and data checking These limitations prevent HTML from being a universal information exchange method HTML is based on SGML (Standard Generalized Markup Language), the international standard for defining de- scriptions of the structure and formatting of different types of electronic documents SGML is complex, dif- ficult, and costly to use To overcome these limitations and to extend Web technology, XML (Extensible Markup Language) was developed, started by John Bosak in

struc-1996, and established by the W3C (World Wide Web Consortium) as a standard in 1998 W3C was created

in October 1994 to lead the World Wide Web to its full potential by developing common protocols that promote its evolution and ensure its interoperability W3C has around 500 member organizations from all over the world and has earned international recognition for its contributions to the growth of the Web.

In contrast to HTML, which was designed to display data and to focus on its appearance, XML was designed

to provide structure and to validate the content of ments XML not only removes the limitations of HTML, it

docu-863

XBRL (E XTENSIBLE B USINESS R EPORTING L ANGUAGE ): B USINESS R EPORTING WITH XML 864

also facilitates more precise declarations of content, more

effective and efficient information exchange, and more

meaningful search results XML includes self-explanatory

data within a document; thus, it can be used for

univer-sal information exchange over the Internet This section

outlines the similarities and differences between SGML,

HTML, and XML, concluding with a summary of the

ben-efits of XML and setting the stage for the subsequent

dis-cussion of XBRL.

SGML (Standard Generalized

Markup Language)

GML (General Markup Language) was developed at IBM

in 1969 by Charles F Goldfarb, Ed Mosher, and Ray Lorie.

Markup refers to the sequence of characters or other

sym-bols that are inserted at certain places in a text or word

processing file to indicate how the file should look when it

is printed or displayed, or to describe the document’s

logi-cal structure The markup indicators are often logi-called tags.

GML was not merely an alternative to procedural markup

but the logical representation that motivated all

process-ing Publishing companies implemented it because they

needed a means of tagging the contents of a document

so that text could be presented in a number of different

ways This approach combined two traditions, one then

about 25 years old and the other around 500 years old.

(A third tradition, the computer programmer’s strategy of

tying markup to specific interpreters, which went back

to the first versions of ROFF at MIT in about 1962,

was intentionally set aside as violating the independence

of structural information from presentation processing.)

The 500-year-old printing and publishing industry

tradi-tion started when the first editor needed to give

unam-biguous instructions to more than one typesetter and

de-veloped his own markup language to do it According to

Smith (1996, pp 75–92), this goes back at least to Anton

Koberger’s printing of the Wurzburg Pslater in 1486.

Most of these instructions had the common

charac-teristic of using instructional tags in a format, such as

<start bold>some text<end bold>, to communicate

dis-play formatting instructions to typesetters and other

ar-tisans as clearly and unambiguously as possible The

25-year-old computing tradition was reflected in early text

processing applications, such as DIALOG and COLEX,

de-veloped in the 1960s These applications generally tagged

data by type at the time of data entry to make it easy to

ap-ply Boolean logic in text searches on files prepared using

tape-to-tape sorts Thus, a file entry would contain both

data and labeling information about the meaning and role

of that data, such as in the following example:

PUBDATE: JULY 26, 1959

LIB: 105DWC/PEMBROOK

PUB: RS, NY

AUTH: JOHN SCARNOUGH, BRANSTON GRECHI

TITLE: LOAD CONDITIONS FOR POLYHEDRAL RISERS

ABSTRACT: REVIEW OF STRUCTURAL INTEGRITY

FAILURE CONDITIONS FOR MECHANICAL

RISERS IN INTERVAL SUPPORT STRUCTURES.

In the mid-1980s, SGML was established by the

International Organization for Standardization (ISO

8879:1986) as an international standard for defining and using document structure and content ISO, founded in

1947, is a worldwide federation of national standards bodies from some 100 countries, one from each country Among the standards it fosters is OSI (Open Systems In- terconnection), a universal reference model for communi- cation protocols Many countries have national standards organizations, such as the American National Standards Institute (ANSI), that participate in and contribute to ISO standards SGML incorporates both data labeling and data presentation information but leaves procedural is- sues entirely to the rendering application.

Because SGML is a generalized theoretical cation, actual use requires selection of a specific DTD (Document Type Definition) A DTD defines the tags the document type will use, what they mean, and whether, and if so to what extent, individual tags can be nested For example, HTML is a SGML DTD SGML also requires use of an application that will correctly interpret the DTD

specifi-in combspecifi-ination with the document text to output either data for use by another application or instructions for a rendering engine SGML also requires a data processing application or a rendering application that will output the document on a specific display device, such as a screen or printer Web browsers like Netscape or Internet Explorer contain a rendering tool, such as a compiler or document handler, that combines text with HTML markup to create displayed pages using a set of internal rules known as style sheets For example <TITLE>text</TITLE> is interpreted

as labeling information giving the document title as “text”;

<P> as an instruction to begin a left-justified paragraph within the current text block, and <H1>text</H1> as an instruction to display “text” on a line (or lines) by itself using the font type and color set in the enclosing block but at about 3.1 times the user’s global default font size SGML was intended to be a language that would ac- count for every possible document format and presen- tation Thus, it enables users to create tags, to define document formats, and to exchange data among vari- ous applications Because SGML is system and platform independent and can save and validate a document’s structure, it can be used in various ways, such as for searching and exchanging data However, SGML is com- plex and contains many optional features that are not needed by many Internet applications Furthermore, it

is costly to develop software that supports SGML As a result, there are few SGML applications for the Inter- net Two examples are Xmetal and Wordperfect Figure 1 shows an SGML document that describes customer e-mail information.

HTML (HyperText Markup Language)

As mentioned earlier, HTML, the basic language for ating a Web page, is based on SGML HTML consists of

cre-a set of mcre-arkup symbols inserted in cre-a file intended for display on a Web browser The markup tags tell the Web browser how to display a Web page’s words and images for the user Each individual markup tag is referred to as

an element HTML uses predefined tags, and the ing of these tags is well understood; for example, <p> means a paragraph, </p> means end of a paragraph, and

mean-<table> means a table Thus, the text “Current Assets, Cash

XML: A N EW P ARADIGM FOR I NTERNET D OCUMENTS 865

Figure 1: SGML example.

and Cash equivalents, $12,345” can be marked up using

HTML as

<table border="1" cellpadding="0"

cellspacing="0" width="70%" align="Center">

<tr>

<td width="70%"><p align="left">Current Assets</p></td>

<td width="30%"></td>

</tr>

<tr>

<td width="70%"><p align="left">Cash and Cash Equivalents</p></td>

<td width="30%"><p align="center">

$12,345</p></td>

</tr>

</table>

This markup produces the table below when rendered

on a display using the postscript language However, the

result can be unpredictably different when rendered using

another combination of Web browser, graphics processor,

desktop settings, and screen.

Current Assets

HTML also adds hyperlink functions to simple uments using tags A hyperlink function enables a user

doc-to jump from document location doc-to document location

within the same document or documents at physically

dis-tant locations connected by the Internet Hypertext is the

organization of information units into connected

associa-tions that a user can choose to make An instance of such

an association is called a link or hypertext link

Hyper-text was the main concept that led to the invention of the

Web, which consists of information content connected by

hypertext links.

HTML is easy to learn and use Its simplicity and venience have aided the explosion of interest in the Inter-

con-net Figure 2 contains an example of an HTML document

and Figure 3 shows the HTML example from Figure 2 as it would appear in a Web browser such as Internet Explorer.

As mentioned previously, HTML has some tal limitations It merely facilitates access to text and multimedia It does not allow intelligent search, data ex- change, and non-HTML forms such as spreadsheets and databases Although HTML tags generally indicate only how the content should appear, XML tags indicate what the content is For example, a financial statement pre- pared using HTML displays the financial statement itself but cannot communicate information about the classifica- tion of numbers within categories or subtotals like current assets or cash and cash equivalents In contrast, XML can give information about the meaning of the numbers in the financial statement as well as displaying them Content, therefore, becomes more readily accessible through XML.

fundamen-As e-commerce grows, it becomes important to exchange data, use more meaningful search, manipulate data, and generate multiple views of the data As a result, HTML’s limitations and XML’s virtues are becoming increasingly noticeable.

XML Document

XML stands for Extensible Markup Language It is extensible because the language can be extended by anyone who wants to create additional tags for new and unforeseen purposes It is a markup language be- cause XML is a method of tagging information using accepted rules and formats to give definition to text and symbols XML was invented by adopting the key functions of SGML while excluding the less essential ones In fact, SGML can be used without modification and can be converted to XML (Further information may be found at http://www.w3.org/TR/NOTE-sgml-xml- 971215.html, Clark, n.d.) Furthermore, existing HTML can continue to be used, but more complicated and more highly structured documents can be created using XML The basic structure of XML is similar to HTML in many respects XML documents consist of XML ele- ments Basically, these elements involve a start tag such

as <TITLE>, an end tag such as </TITLE>, and the

XBRL (E XTENSIBLE B USINESS R EPORTING L ANGUAGE ): B USINESS R EPORTING WITH XML 866

Figure 2: HTML example.

content between the two tags Figure 4 shows an XML

document that contains customer information The code

for this example and all the other examples and

tax-onomies described in this paper is available in full online

at http://arts.uwaterloo.ca/ ∼jeboritz/XBRL/

Figure 3: HTML example in Internet Explorer.

Unlike HTML, XML tags indicate what each item

of data means; for example, tags such as <DATE>,

<ADDRESS>, and <PROFILE> convey meaning In the example in Figure 4, the data defined by the <PROFILE> tag indicates that the data represents customer profile.

XML: A N EW P ARADIGM FOR I NTERNET D OCUMENTS 867

Figure 4: XML example.

Therefore, recipients of this document can decode the

XML data and use it for their own purposes For instance,

a customer manager might use it to find customers who

live in the Waterloo area (<CITY>Waterloo</CITY>).

Because HTML tags are predefined and understood

by Web browsers, the Web browsers can display

HTML-tagged documents In contrast, because XML enables

users to create any tags they need, the meaning of these

tags will not necessarily be understood by a Web browser

unless they are the preexisting HTML commands There

is no way for a generic Web browser to anticipate all

possible tags and contain all the necessary rules for

dis-playing them Thus, to display XML documents in a Web

browser, it is necessary to have a mechanism to describe

how the document should be displayed This is done by

means of a style sheet A style sheet is prepared using style

sheet language Two of the most popular style sheet

languages are CSS (Cascading Style Sheets) and XSLT

(Extensible Stylesheet Language Transformations) CSS

provides procedural control by putting the additional

presentation control information needed to force a

browser to override its internal style sheet inside the

HTML file Thus, the following command overrides the

browser’s internal style sheet to turn text between <H1>

and </H1> blue while forcing it to a 12-point font size

regardless of user settings.

style sheet to HTML: external style sheet, internal style

sheet, and inline styles An external style sheet can be

cre-ated with any text editor, and a CSS style sheet should

be saved with a “css” extension Figure 5 shows an ample of an external style sheet An internal style sheet should be used when a document has a unique style The internal style sheet is defined in the head section

ex-by using the <style> tag The example shows an nal style sheet Finally, inline styles can be used with the style attribute in the relevant tag The style attribute can contain any CSS property (Further information may

inter-be found at html.html, Web Design Group, n.d.)

http://www.htmlhelp.com/reference/css/style-Figure 5 contains the CSS code used to represent the XML example in Figure 4, so that it can be displayed by

a Web browser exactly like Figure 3 There are several tools available to create the CSS code (e.g., Microsoft FrontPage).

After a XML document and a style sheet for that ument are prepared, the XML document can be shown

doc-in the Web browser by doc-includdoc-ing an doc-instruction doc-in the XML document specifying the style sheet to be used,

as in Figure 4: <?xml-stylesheet type = “text/css” href =

“customer.css”?> Of course, an HTML document is but one way of presenting an XML document Because XML separates content from presentation format, through the use of style sheets and other programmatic methods, the content in XML can be presented in several ways, such as

an HTML document, text document, and spreadsheet.

is a consortium led by not-for-profit entities Thus, XML creates a universal way for both formatting and presenting data and enables putting structured data

XBRL (E XTENSIBLE B USINESS R EPORTING L ANGUAGE ): B USINESS R EPORTING WITH XML 868

Figure 5: CSS example.

in a text file Because data in XML are coded with

tags that describe content and structure, the data

pre-sented in a XML format can be parsed, edited, and

manipulated Searches can produce more accurate and

relevant outputs Data can be exchanged and processed

without modification on any software and any hardware

platform because XML-based data are self-describing.

These capabilities have potential application to B2B

communications, transaction processing, and data

trans-fers between various systems and platforms Once an

XML file has been delivered to users, they can view it in

different ways Because XML is extensible, it also allows

users to create their own validation tools, including DTDs

and XML schema, effectively creating extensible tag sets

that can be used for multiple applications.

As mentioned previously, a DTD is a specific definition

that follows the rules of the SGML It defines elements,

el-ement attributes, and values and describes specifications

about which elements can be contained in others A DTD

accompanies a document and can be used as a validation

tool.

An XML schema is an XML-based alternative to a DTD.

It is developed to provide XML with flexibilities that a DTD

does not possess to meet users’ needs For example, with

a DTD it is difficult to validate the correctness of data, to

work with data from a database, and to describe

permissi-ble document content because a DTD does not have

sup-port for data types In addition, a DTD is not an XML

doc-ument; therefore, users have to learn another language.

In contrast, an XML schema describes the structure,

con-tent, and semantics of an XML document Thus, an XML

schema provides a means for expressing shared

vocabu-laries and allows machines to carry out rules made by

de-velopers (Further information may be found at the XML

schema Web site, http://www.w3.org/XML/Schema.html,

W3C, n.d.b.) Also, users do not have to learn another

lan-guage to create an XML schema because it is written in

XML.

XML is being extended with several additional

stan-dards that add styles (XSLT), linking (XLink), and

referencing ability to the core XML set of capabilities.

XML linking language (XLink) is a method of creating

and describing hyperlinks that support both

tradi-tional HTML and extended links, which provide more

functionality than traditional HTML links (Further mation may be found at the XLink Web site, http://www w3.org/TR/xlink/, W3C, n.d.a.)

infor-XBRL (EXTENSIBLE BUSINESS REPORTING LANGUAGE)

XBRL (Extensible Business Reporting Language), merly code-named XFRML (XML-based Financial Re- porting Markup Language), is the financial profession’s adaptation of XML for financial reporting A joint industry and government consortium was established for this pur- pose in the fall of 1999, including the American Institute

for-of Certified Public Accountants (AICPA), six information technology companies, and the five largest accounting and professional services firms (Information on XBRL member organizations is available at the XBRL Web site, http://www.xbrl.org/.) The consortium developed an XML- based specification for the preparation and exchange of financial reports and data This freely available and open specification provides a method by which financial profes- sionals can prepare, extract, analyze, and exchange busi- ness reports, like financial statements, and the informa- tion they contain.

The main objective of financial reporting is to provide useful information to users for their decision making pur- poses By providing financial information to intranet, ex- tranet, and corporate Web sites, entities can help users obtain more easily and on a more timely basis the infor- mation they need However, because there are no com- mon, generally accepted formats for describing business reporting data, it is difficult to generate reporting formats tailored to different users’ needs and to exchange data among applications Thus, users seeking to work with data posted on Web sites must reenter or cut and paste the data into their documents or spreadsheets This is clearly inefficient.

XBRL was created to help address these issues by ating a set of tags recognizable to XML-enabled Web browsers or other applications, such as spreadsheet and database software Using XBRL, tags are attached to all financial statement data to identify them as asset, cur- rent asset, liability, capital, profit, and so forth There- fore, information users can use a Web browser to visit

cre-XBRL (E XTENSIBLE B USINESS R EPORTING L ANGUAGE ) 869

companies’ Web sites, find the data with the tags (e.g.,

CashAndCashEquivalents), extract the data, and analyze

the data with analytical applications.

XBRL is different from other XML-based tions, such as FpML, FIX, FinXml, OFX, ebXML, and

specifica-XML/EDI.

rFpML (Financial Products Markup Language) is an

XML-based industry-standard protocol for swaps, derivatives and structured products (Further informa- tion may be found at the FpML Web site, http://www.

fpml.org, FpML, n.d.)

rFIX (Financial Information Eschange) defines specific

kinds of electronic messages for communicating rities transactions between two parties (Further infor- mation may be found at the FIX Web site, http://www.

secu-fixprotocol.org, FIX, n.d.)

rFinXML is an XML-based standard for financial

insti-tutions to exchange financial data and to communicate the details of highly structured financial transactions.

(Further information may be found at the FinXML Web site, http://www.finxml.org, FinXML, n.d.)

rOFX (Open Financial Exchange) is a specification for

the electronic exchange of financial data between cial institutions, businesses, and consumers via the In- ternet (Further information may be found at the OFX Web site, http://www.ofx.net, Open Financial Exchange, n.d.)

finan-rebXML (Electronic Business using XML) is a suite of

specifications that enables enterprises to conduct ness over the Internet ebXML provides a standard method for exchanging business messages, conducting trading relationships, communicating data in common terms, and defining and registering business processes.

busi-(Further information may be found at the ebXML Web site, http://www.ebxml.org, ebXML, n.d.)

rXML/EDI (Extensible Markup Language/Electronic Data Interchange) provides a standard framework to ex- change various types of data—for example an invoice, healthcare claim, or project status—can be searched, decoded, manipulated, and displayed consistently and correctly by first implementing EDI dictionaries and ex- tending vocabulary via online repositories to include business language, rules, and objects This framework

is intended to apply to a variety of information sources: transactions, exchanges via an API (Application Pro- gram Interface), Web automation, database portal, cat- alog, workflow document, or message (Further in- formation may be found at the XML/EDI web site, http://www.xmledi-group.org, XMLEDI, n.d.)

In contrast with these transaction-oriented tions, XBRL is reporting oriented As such, XBRL enables individual investors and financial professionals to search through and extract data from financial statements, then place them in their own applications, simplifying one

specifica-of the key phases specifica-of financial statement analysis XBRL does not establish new accounting standards (although XBRL.org has a process for approving taxonomies) but

is intended to enhance the value or usability of existing standards Also, it does not require providing additional financial information to outside users.

How XBRL Works

Figure 6 depicts how XBRL would be used Suppose that a public company, Toronto Inc., wishes to provide financial statements to analysts.

After the company prepares its financial information using its internal accounting system, an XBRL document

is created by mapping the financial information to

Toronto Inc.

Database

Application such as Accounting System

XBRL Taxonomy Other Taxonomies

Internet

XBRL Document

Application Software

HTML

PDF

Application Data

Other Formats Style Sheet

-Prepare XBRL Document -User’s Request -Obtain XBRL Document via the Internet -Translate XBRL Document into Other Formats

Third Party Style Sheet

Figure 6: How XBRL works.

XBRL (E XTENSIBLE B USINESS R EPORTING L ANGUAGE ): B USINESS R EPORTING WITH XML 870

XBRL taxonomy elements A number of new software

packages can do this automatically The created XBRL

document is automatically checked to ensure it is proper

XBRL There are several XBRL document validation

programs One is available from XBRL Solutions Inc., at

http://www.xbrlsolutions.com Then, the validated XBRL

document is placed on the company’s Web site or FTP

server.

When users need the information contained in the

XBRL document for their analysis, they obtain it on the

Internet Users use the XBRL document for their

analy-sis If they want to translate the document into HTML, a

spreadsheet, or database, they can do so with

appropri-ate style sheets developed by them or by outside software

developers Of course, an XBRL document would not

nec-essarily be viewed by a person in its raw form

XML-enabled software could automatically parse and

trans-form the content of the XBRL document and then transfer

it to another system for further processing.

XBRL Taxonomy and XBRL

Instance Document

A XBRL document is created by mapping financial

information to an XBRL taxonomy that describes

financial “facts” and the relationships between them A taxonomy is a dictionary of the financial terms used

in preparing financial statements or other business ports and the corresponding XBRL tags A XBRL tax- onomy can be regarded as an extension of an XML schema that defines elements corresponding to concepts that can be referenced in XBRL documents; for ex- ample, the element with the name “nonCurrentAssets propertyPlantAndEquipmentNet” represents such a con- cept A XBRL document has a hierarchical structure that

re-is defined by the taxonomy Figure 7 contains a cal illustration of the hierarchical structure of an XBRL document and a taxonomy as seen through a “taxonomy viewer.”

graphi-A XBRL instance document is an XML document containing XBRL elements In other words, a company’s financial statements, created by using XBRL, are an in- stance document in which various XBRL elements are embedded based on a specific taxonomy A common tax- onomy enables users to compare several firms’ finan- cial statements (assuming they use the same accounting guidelines) Because the same tags are used by all “pub- lishers” of XBRL documents, who rely on the same tax- onomy, all users of those documents will recognize the tagged data the same way For example, the tag <group

Figure 7: XBRL taxonomy as seen through a taxonomy viewer.

XBRL (E XTENSIBLE B USINESS R EPORTING L ANGUAGE ) 871

Figure 8: XBRL example.

type = “ci:balanceSheet.assets”> indicates that the data

after the tag relates to assets on the balance sheet Figure 8

shows an example of an XBRL instance document (Please

note that all the examples used in this chapter are based

on version 1.0 of XBRL The XBRL specification version

2.0 was publicly announced on Dec 14, 2001 This

specifi-cation is to be used to create XBRL taxonomies However,

at the time this chapter was prepared no XBRL taxonomy

based on version 2.0 was available Version 2.0 is

signif-icantly different from version 1.0, but the key concepts

described in this chapter are still applicable.)

The sample XBRL document in Figure 8 is based on the XBRL taxonomy for business reporting of commercial

and industrial companies, under U.S Generally Accepted

Accounting Principles (US GAAP), dated 2000-07-31

Fig-ure 9 shows a part of this taxonomy (A new version of this

taxonomy was nearing completion at the time this chapter

was written The new version will have significant

differ-ences from the version illustrated in this chapter; however,

the key concepts discussed here still apply.)

A XBRL taxonomy has several advantages First, it makes it possible to bring the semantics of financial infor-

mation to the surface, making it more transparent

Sec-ond, an XBRL taxonomy can make it easier to analyze how

similar companies applied various accounting rules or

methods Third, an XBRL taxonomy provides contextual

information that can enhance information search using

XBRL-based search engines to obtain more complete and

more accurate search results Finally, an XBRL taxonomy

can be used for converting an XBRL document based on one country’s generally accepted accounting principles (GAAP) to an XBRL document based on another coun- try’s GAAP For example, an XBRL document prepared

by using a U.S taxonomy can be converted to an XBRL document based on International Accounting Standards (IAS) taxonomy This may become an important function because hundreds of national and industry taxonomies are being developed.

At present, several taxonomies have been developed such as US GAAP CI, the XBRL taxonomy for busi- ness reporting of commercial and industrial companies under US GAAP, the XBRL GL (General Ledger) tax- onomy, and the IAS GAAP CI taxonomy Also, several national taxonomies are under development: Canadian GAAP CI, German GAAP CI, Australian GAAP CI, New Zealand GAAP CI, and Singapore GAAP CI Also, sev- eral prominent organizations have announced commit- ments to XBRL, including the Australian Prudential Reg- ulatory Authority, UK Inland Revenue, U.S FDIC, NAS- DAQ, Microsoft, Bank of America, Morgan Stanley, and Reuters Information about XBRL taxonomies may be found at http://www.xbrl.org, XBRL Home Page (2000) Information about the Australian Prudential Regula- tory Authority may be found at http://www.apra.gov.au, APRA (n.d.) Information related to Microsoft’s com- mitment to XBRL may be found at Microsoft’s web site, http://www.microsoft.com/msft, Microsoft (n.d.) Information on companies and organizations that

Figure 9: Taxonomy for business reporting of commercial and industrial companies, US

GAAP.

Figure 10: Customized taxonomy example.

872

XBRL (E XTENSIBLE B USINESS R EPORTING L ANGUAGE ) 873

provide XBRL statements may be found at the XBRL

ex-press web site, http://www.edgar-online.com/xbrl.

Extensibility

Because XBRL is an application of XML, it is

extensi-ble Therefore, if a taxonomy does not contain tags that

meet the users’ needs, the users can create their own tags.

An example of a customized taxonomy is shown in

Fig-ure 10 The customized taxonomy contains added

ele-ments to describe statement information, statement title,

and company name.

Style Sheets

Although XBRL documents can be easily handled by

soft-ware applications, they are not easily readable by

peo-ple However, XBRL documents can be transformed into

user-understandable formats, such Web pages, text

documents, and other XBRL documents, with the help

of style sheets As mentioned previously, Web browsers

such as Internet Explorer do not have built-in

seman-tics that enable them to process a labeling tag such as

<Assets.CurrentAssets> Thus, for an XBRL document to

be displayed by a browser, it must first be transformed

into a document the browser can render.

As mentioned previously, CSS (Cascading Style Sheets) and XSLT (Extensible Stylesheet Language Transforma-

Figure 11: XSLT example.

tions) are the two most popular style sheet languages CSS and XSLT overlap to some extent CSS is more broadly supported than XSLT Most Web browsers sup- port CSS, but only a few accept XSLT Thus, it is likely most of CSS (CSS1 and some of CSS2) to be well sup- ported by popular Web browsers, such as Netscape and Internet Explorer CSS1 (Cascading Style Sheets level 1)

is a W3C recommendation It describes the CSS language

as well as a basic formatting model CSS 2 (Cascading Style Sheets level 2), which is also a W3C recommen- dation, builds on CSS1 It includes media-specific style sheets (e.g., printers and aural devices), and element positioning and tables Although many HTML users and developers are familiar with CSS, it only provides for formatting of contents It does not allow users to change

or reorder contents (Further information may be found

at http://www.w3c.org/Style/CSS, W3C, n.d.c.) Although XSLT is more complicated than CSS and is not well supported, it is a more powerful and flexible style sheet language than CSS XSLT is currently the only style sheet language designed specifically for use with XML XSLT can transform XML into other documents, such as HTML or database, filter and sort XML data, and format XML data XSLT has evolved from the early XSL stan- dard XSL consists of a language for transforming XML documents and a language for formatting XML doc- uments The XSL formatting language, often called

XBRL (E XTENSIBLE B USINESS R EPORTING L ANGUAGE ): B USINESS R EPORTING WITH XML 874

Figure 12: XBRL example in Internet Explorer.

XSL-FO (Extensible Stylesheet Language Formatting

Objects), provides means to display data in some format

and/or media XSL transformations language, known as

XSLT, provides a means of parsing an XML documents

into a tree of nodes, and then converting the source tree

into a result tree XSLT was proposed and later accepted

as a separate standard for XML data transformation only.

XSL is now generally referred to as XSL-FO (XSL

For-matting Objects), to distinguish it from XSLT XSLT can

transform selected XML elements into HTML elements.

In addition, XSLT can add new elements into the

out-put file, or it can remove elements It can also rearrange

and sort the elements Figure 11 shows an XSLT

docu-ment that is applied to the XBRL example in Figure 8.

Further information may be found at the XSL Web site,

http://www.w3.org/TR/xsl, W3C, n.d.d.)

A XBRL document can be shown in a Web browser

by including an instruction in the XBRL document to

specify the XSLT style sheet to be used (<?xml-stylesheet

type = “text/xsl” href = “XBRL-example.xsl”?>) To plify the example, the style sheet is applied to the XML document by embedding the stylesheet command in the document However, it should be noted that embedding the stylesheet command in an XML document is only one way of displaying an XML document Another method of handling an XML document is to use XSLT to transform

sim-an XBRL or XML document into other formats, such as HTML, text, spreadsheet, and database formats Figure

12 shows the XBRL example in Internet Explorer Users might want to move data in and out of special applications, such as database and spreadsheet software For example, users might want to view, update, and re- view the data in a spreadsheet as an intermediate step

in the context of a larger business process Currently, most major office suite software supports the storage and manipulation of XML documents Microsoft Office XP, for instance, supports XML document files Therefore, with XML support built into Excel, users can load data

S UMMARY OF A DVANTAGES AND L IMITATIONS OF XBRL 875

Figure 13: XBRL example in Excel.

from an XBRL document into Excel and apply their own

analytic procedures on the data Figure 13 shows an

XBRL example document that is loaded into Microsoft

XBRL provides a number of important benefits It is

tech-nology independent; thus, XBRL is relevant for all users

of financial information, regardless of system or platform

used Second, XBRL tags describe content and structure.

Therefore, by searching tagged information, users can obtain more reliable results more efficiently Third, be- cause XBRL documents are prepared using a taxonomy, data can be exchanged and processed without modifi- cation This permits interchangeability of data and cuts down on data manipulation costs Fourth, XBRL docu- ments can be transformed to several formats, such as a Web page and a data file for spreadsheet and database software Consequently, data in XBRL may be displayed

in a Web browser, sent to a database, sent to a printer, and used to create other XBRL documents Fifth, because XBRL facilitates paperless financial reporting, the cost

of producing financial and regulatory information can be substantially reduced Finally, XBRL enhances the analy- sis of multiple company financial information; users can obtain and analyze several companies’ financial data si- multaneously (assuming they follow the same generally accepted accounting principles).

XBRL (E XTENSIBLE B USINESS R EPORTING L ANGUAGE ): B USINESS R EPORTING WITH XML 876

Limitations of XBRL

Although XBRL provides a number of important

bene-fits, it also has limitations First, it is important to note

that XBRL provides tags for conventional financial

state-ments and does not address other methods of displaying

financial data, such as formulas, graphs, and charts In

fact, XBRL is not primarily designed for easy rendering

of information for human consumption—its primary

ob-jective is to enhance efficiency of data transfer and

archiv-ing Many accounting professionals and users have

sug-gested that current financial statements do not fully live

up to users’ expectations because the conventional

finan-cial statement reporting format may not meet the needs

of users who prefer various types of multimedia formats

or multidimensional numerical and graphical

presenta-tions XBRL does not provide a standardized format for

such displays, focusing instead on conventional financial

statement content Second, XBRL does not currently

ad-dress the quality of information, for example whether

data coded in XBRL are reliable A number of XBRL

tax-onomies are being developed, raising the possibility of

errors in selecting and applying XBRL taxonomies and

codes/tags Also, information on the Web can be easily

created and revised, and its source can be disguised,

rais-ing questions about the trustworthiness of information

disseminated via the Internet, including information in

XBRL format Third, XBRL currently views the

accoun-tant’s report as part and parcel of the financial statement

package as a whole It does not provide for an assurance

report on an individual financial statement or an

individ-ual item in a financial statement, or on the internal

con-trols underlying the financial reports We deal with these

issues in some depth in Boritz and No (2002).

CONCLUSION

Many companies are attempting to disseminate financial

information over the Internet They have set up Intranets,

connected the Intranets to the Internet, and have created

corporate Web sites to provide employees, investors,

fi-nancial analysts, and other users with the information

they need on a timely basis However, data must often

be reentered or cut and pasted by users seeking to

ana-lyze it because there are no common, generally accepted

formats for describing business reporting data.

XBRL was created to help address these problems.

XBRL is a markup language for documents containing

structured financial information It provides a ized method to prepare, publish, and exchange financial reports and the information they contain without modifi- cation Thus, XBRL offers technology independence, full interoperability, efficient preparation of financial state- ments, and efficient extraction of financial information for analysis purposes.

standard-APPENDIX A: CREATING AN XBRL DOCUMENT

Here, we briefly describe how to create an XBRL ment and an XSLT style sheet Please note that this exam- ple is based on version 1.0 of XBRL The XBRL specifica- tion version 2.0 was publicly announced on Dec 14, 2001 However, at the time this article was prepared, the XBRL taxonomy version 2.0 was not yet available Version 2.0 is significantly different from version 1.0, but the key con- cepts described in this article are still applicable Suppose Waterloo Inc wishes to prepare its financial statements and distribute them to creditors, investors, analysts, and regulatory parties over the Internet in XBRL format Table A1 shows the simple balance sheet of Waterloo Inc.

docu-An XBRL document is a collection of elements and tributes that describe financial information and data The XBRL document can be created by using a text editor (a software application that enables a user to create and modify text files), such as WordPad, or an XML editor or

at-an XBRL instat-ance creation tool The XBRL document for the balance sheet of Waterloo Inc is shown below.

Table A1 Balance Sheet

A PPENDIX A: C REATING AN XBRL D OCUMENT 877

The first line is the XML declaration: <?xml version =

“1.0” encoding = “utf-8”?> It is an example of an XML

processing instruction The XML processing instruction

starts with “<?” and ends with “?>” and the first word

af-ter “<?” is the name of the processing instruction Usually,

an XML document starts with the XML declaration that

specifies the version of XML being used Thus version =

“1.0” indicates that the document conforms to XML 1.0.

The XML declaration may also have several attributes.

In the above example, the “encoding” attribute specifies

which character encoding is being used UTF-8 is used

for the example document UTF stands for UCS (Universal

Character Set) transformation formats It is a compressed

form of unicode that leaves pure ASCII text unchanged.

Therefore, XBRL documents that contain nothing but the

common ASCII characters can be edited with applications

that do not deal with multibyte character sets like

Uni-code.

Line 2 contains the processing instruction required to display the XBRL document in the Web browser The processing instruction, <?xml-stylesheet?>, has two at- tributes, “type” and “href.” The type attribute specifies the style sheet language used, and the href attribute specifies

a URL where the style sheet is located In our example, the type is “text/xsl” and the href is “Appendix.xsl.” These are further explained and illustrated later.

XBRL documents are created by using one or more onomies A taxonomy is a dictionary of the financial terms used in preparing business reports, such as financial state- ments The taxonomy can be a commonly accepted taxon- omy, such as the CI (Commercial and Industrial) taxon- omy created by XBRL.ORG, or other taxonomies created

tax-by users for their specific requirements Lines 4 through

12 indicate the XML namespace for the taxonomy used to create the example document, namely the CI taxonomy (us-gaap-ci-2000-07-31.xsd) XML namespaces provide a

XBRL (E XTENSIBLE B USINESS R EPORTING L ANGUAGE ): B USINESS R EPORTING WITH XML 878

Figure A1: XBRL “Cash and Cash Equivalents” element in a taxonomy viewer application.

simple method for qualifying element and attribute names

used in XML documents by associating them with

names-paces identified by URL references Thus, they uniquely

identify a set of names so that there is no ambiguity when

objects having different origins but the same names are

mixed together In an XML document, any element type

or attribute name can thus have a two-part name,

con-sisting of the name of its namespace and then its local

(functional) name (Further information may be found at

the W3C Web site, http://www.w3.org.)

The main task in creating an XBRL document is

map-ping the company’s financial information to XBRL

finan-cial terms contained in the taxonomy This involves

find-ing the XBRL elements that correspond to the company’s

financial information For example, lines 15 and 46 show

the XBRL elements for the balance sheet The <group

type = “ci:statements.balanceSheet”> is a start tag, and

</group> is an end tag The XBRL elements between the

two tags describe each balance sheet item.

Because XBRL taxonomy files are XML files, users can

find XBRL elements that correspond to their financial

in-formation by using a text editor, as illustrated in Figure 9.

Although it is possible for users to view taxonomy

infor-mation with any text editor, a taxonomy viewer

appli-cation can help users obtain a better and faster

under-standing of the structure of this information Therefore,

with a taxonomy viewer application, users can easily pare XBRL documents by mapping XBRL elements in various taxonomies to their financial information For instance, lines 16 through 20 illustrate the XBRL ele- ments for the cash and cash equivalents item Using the taxonomy viewer application, users obtain the XBRL el- ement name for their cash and cash equivalents item.

pre-A screen shot of the XBRL “Cash and Cash lents” element in a taxonomy viewer application is shown

Equiva-in Figure A1 The taxonomy viewer application used Equiva-in Appendix I is available from XBRL Solutions Inc., at http://www.xbrlsolutions.com.

The name of the XBRL taxonomy element for cash and cash equivalents is “cashCashEquivalentsAndShortTerm- Investments.cashAndCashEquivalents.” Thus, the start tag for the cash and cash equivalents item is <group type =

AndCashEquivalents”>, and the end tag is </group> The XBRL elements between the start and end tags de- scribe “label” and “item” information Line 17 shows the label of the cash and cash equivalents item, and lines 18 and 19 illustrate the amount of cash and cash equivalents for the years 2000 and 1999, respectively.

“ci:cashCashEquivalentsAndShortTermInvestments.cash-By following the same steps, the rest of the balance sheet items in the balance sheet of Waterloo Inc can be mapped to XBRL elements Lines 21 through 25 show the

A PPENDIX A: C REATING AN XBRL D OCUMENT 879

Figure A2: Screen shot of the Internet-based XBRL validation service provided by XBRL

Solutions Inc.

XBRL elements for the accounts receivable item, and the

XBRL elements for the accounts payable item are shown

in lines 31 through 35 Finally, lines 36 though 40 contain

the XBRL elements for the common stock item.

Once the XBRL document is created, it is important to check whether the created document is a valid XBRL doc-

ument The validation can be performed by using

valida-tion software or an Internet-based service A screen shot

of the Internet-based XBRL validation service provided

by XBRL Solutions Inc (http://www.xbrlsolutions.com/)

is shown in Figure A2.

An XBRL document provides contextual information, but it does not define how the information should be dis-

played To display an XBRL document in a Web browser,

users need to write a style sheet (prepared with a style sheet language) for the XBRL document to specify how the document should be displayed A style sheet can be shared between different documents and different users,

as well as integrated with other style sheets With the appropriate style sheets, users can transform the XBRL document into an HTML document, text document, word processing document, spreadsheet, database file, or an- other XBRL document The two most popular style sheet languages are CSS and XSLT XSLT is currently the only style sheet language designed specifically for use with XML Thus, for our XBRL example, we will create an XSLT style sheet to transform XBRL into HTML The cor- responding XSLT style sheet example is shown below.

09: <P ALIGN="CENTER"><B><FONT SIZE="6">Balance Sheet</FONT></B></P>

10: <P ALIGN="CENTER"><I><B><FONT SIZE="3">Waterloo Inc.</FONT></B></I></P>

11: <TABLE BORDER="0" CELLPADDING="5" CELLSPACING="0" WIDTH="100%">

XBRL (E XTENSIBLE B USINESS R EPORTING L ANGUAGE ): B USINESS R EPORTING WITH XML 880

19: <TD WIDTH="25%" STYLE="border-bottom-style: solid; border-bottom-width: 3"

Because XSLT uses XML to describe templates, rules,

and patterns, an XSLT style sheet starts with the XML

dec-laration <?xml version = “1.0”?> The XSLT document

it-self is an “xsl:stylesheet” element Thus, line 2 of the XSLT

style sheet example describes the start of the XSLT

pro-cess with the XSLT propro-cessing instruction: <xsl:stylesheet

xmlns:xsl = “http://www.w3.org/1999/XSL/Transform”

version = “1.0”>

Line 52 indicates the end of the XSLT process:

</xsl:stylesheet> The XSLT processing instruction

indi-cates the XSLT name space—the location of the XML

el-ements that comprise XSLT instructions XSLT

instruc-tions are identified by the “xsl:” prefix on the element.

Line 4 specifies the overall method used for outputting

the result.

As you can see from the example, an XBRL document

has a hierarchical structure whereby the root element is

connected to its child elements, each of which may

con-nect to zero or more children of its own, and so forth.

Figure A3 displays each element of the XBRL example as

a tree structure.

XSLT accepts an XBRL document as input and duces another document as output An XSLT style sheet consists of a list of templates and instructions A template has a pattern that specifies the elements it applies to an XBRL document Thus, when the pattern is matched, in- structions contained in the template are applied In other words, when an XSLT style sheet is applied to an XBRL document, XSLT recognizes the root element of the XBRL document and looks through each child element in turn.

pro-As each element in the XBRL document is read, XSLT compares it with the pattern of each template in the style sheet When XSLT finds an element that matches a tem- plate’s pattern, it creates outputs by applying the instruc- tions contained in the template.

Each template is represented by using a “xsl:template” processing instruction The template instruction starts with <xsl:template match = “ ”> and ends with </xsl: template> Lines 5 and 51 show an example of a template instruction Line 5 indicates the template of the root el- ement: <xsl:template match = “/”> Each “xsl:template” instruction has a “match” attribute that specifies which

A PPENDIX A: C REATING AN XBRL D OCUMENT 881

Root

Assets

Liabilities and Stockholders Equity

Liabilities Stockholders

Equity Cash and

Cash Equivalents

Accounts Receivable

Accounts Payable Common Stock Balance Sheet

Figure A3: Elements of the XBRL example displayed as a tree

structure.

element of the template is instantiated To specify the root

element in the template, the value “/” is given its match

attribute.

There are three useful XSLT processing instructions for transforming the value of an element in the XBRL

document into an element in the output document First,

the “xsl:value-of” instruction copies the value of an

ele-ment in the XBRL docuele-ment into the output docuele-ment.

Each “xsl:value-of” instruction has a “select” attribute that

specifies which element’s value is being taken For

exam-ple, suppose you want to copy the content of the cash

and cash equivalents element, specifically the value of its

item You can obtain the value with <xsl:value-of select

= “item”/> The “xsl:value-of” instruction should only be

used in contexts where it is unambiguous as to which

el-ement’s value is being taken, because if there are multiple

possible elements that could be selected, only the first one

will be chosen.

There are several ways of processing multiple elements

in turn One option is the “xsl:for-each” instruction The

“xsl:for-each” instruction processes each element chosen

by its selected attribute in turn Lines 23 and 47 show

an example of the “xsl:for-each” instruction Both lines

illustrate the processing of the child elements of the

“group” element Line 19 shows a start tag <xsl:for-each select = “group/group/group”> and line 54 indicates an end tag </xsl:for-each> Each “xsl:for-each” instruction has a “select” attribute that specifies which element’s value

is being taken To specify the child elements, the value “/”

is given its selected attribute For example, “group/group” indicates that all group elements within a group element should be processed.

Finally, XSLT provides instructions that enable users

to process child elements based on the input One option

is the “xsl:choose” instruction It provides multiple ditional testing in conjunction with the “xsl:when” and

con-“xsl:otherwise” elements Lines 25 through 45 show an ample of the “xsl:choose” instruction The “test” attribute

ex-of “xsl:when” contains a select expression that evaluates

to a boolean Therefore, if the expression is true, the tents of the “xsl:when” instruction are processed Other- wise, the contents of the “xsl:otherwise” instruction are processed.

con-Line 25 shows the start tag of the “xsl:choose” struction: <xsl:choose> Line 53 shows the end tag: </xsl: choose> This instruction states that if the “type” at- tribute of the current element is equal to “ci:statements balanceSheet” or “ci:balanceSheet.liabilitiesAndStock holdersEquity,” then the XSLT instructions between lines

in-27 and 35 are processed Otherwise, the XSLT instructions between lines 38 and 43 are processed.

When the XSLT style sheet example is applied to the XBRL document example, the following actions occur.

Lines 1 and 2: These indicate the start of the XSLT process.

Line 4: This XSLT instruction indicates that the results are transformed as HTML.

Line 5: The root element is compared with the pattern of each template in the style sheet It matches the first one.

Lines 6–22: The following HTML tags are written out.

<HTML>

<TITLE>XBRL Example</TITLE>

<BODY>

<P ALIGN="CENTER"><B><FONT SIZE="6"> Balance Sheet</FONT></B></P>

<P ALIGN="CENTER"><I><B><FONT SIZE="3">Waterloo Inc.</FONT></B></I></P>

<TABLE BORDER="0" CELLPADDING="5" CELLSPACING="0" WIDTH="100%">

XBRL (E XTENSIBLE B USINESS R EPORTING L ANGUAGE ): B USINESS R EPORTING WITH XML 882

Lines 23–47: The “xsl:for-each” instruction processes each

child element of the “group/group/group” element.

Line 24: The HTML tag, <TR>, is written out.

Lines 25–45: The XSLT instruction “xsl:choose” is

pro-cessed.

Lines 26–36: If the attribute of the current element is equal

to “ci:statements.balanceSheet” or “ci:balanceSheet.

liabilitiesAndStockholdersEquity,” then instructions

between lines 27 and 35 are processed These lines

show the XSLT instructions that write out total assets

and total liabilities and stockholders’ equity.

Line 27: The HTML tag, <TD WIDTH = “50%” STYLE =

“border-top: 2px solid #000000; border-bottom: 5px

double #000000”>, is written out.

Line 28: The value of the current element’s label is written

out with HTML tags Example: <B><FONT SIZE = “3”>

Total assets </FONT></B>

Line 29: The HTML tag, </TD>, is written out.

Line 30: The “xsl:for-each” instruction processes each

“item” element.

Lines 31–32: The <TD WIDTH = “25%” STYLE =

“border-top: 2px solid #000000; border-bottom: 5px double

#000000”> and <FONT SIZE = “3”><P ALIGN =

“RIGHT”> tags are written out.

Line 33: The value of the current element is converted to

a formatted number Example: 30,000.

Line 34: The </P></FONT></TD> tags are written out.

Lines 37–44: Otherwise, instructions between lines 38 and

43 are processed These lines show the XSLT

instruc-tions that write out balance sheet items.

Line 38: The value of the current element’s label is

written out with HTML tags Example: <TD WIDTH =

Figure A4: XBRL example.

“50%”><FONT SIZE = “3”> Cash and cash equivalents

Line 41: The value of the current element is converted to

a formatted number Example: 18,000.

Line 42: The </P></FONT></TD> tags are written out Line 46: The </TR> tag is written out.

Lines 48–50: The following HTML tags are written out.

“Appendix.xsl”?> Currently, the processing instruction

<?xml -stylesheet?> is included in the XBRL document

to specify the style sheet to be used However, in the long term, there will be a number of different ways to do it, including browser-server negotiation via HTTP headers,

G LOSSARY 883

naming conventions, and browser-side defaults Figure A4

shows the XBRL example in the Web browser.

Microsoft Internet Explorer 6.0 is recommended for this example Internet Explorer 5.0 and 5.5 include the

Microsoft XML parser (MSXML), which includes an

implementation of XSL, which is based on a working

draft of the XSLT specification The XSLT specification

was finalized on November 19, 1999 The MSXML

parser installed in Internet Explorer 5.0 and 5.5 does

not support the most current XSLT specification Thus,

a reader of this article who uses Internet Explorer 5.0

or 5.5 must install MSXML 3.0 or a higher version

from http://MSDN.microsoft.com/xml Unfortunately,

Netscape 6.2 does not support the XSLT specification.

Therefore, the example will not work in Netscape.

In this appendix, we have explained how to create an XBRL document and an XSLT style sheet However, in

practice, XBRL documents will be created by a software

package that automatically creates an XBRL document

by mapping a company’s financial statements prepared

by its internal accounting system to XBRL taxonomy

ele-ments and validates the resulting XBRL code In addition,

XSLT style sheets would be created automatically by using

a style sheet generating software package The validated

XBRL document can then be made available to users, such

as creditors, investors, and analysts, on the company’s

Web site Users can analyze the data in the XBRL

doc-ument by loading it into software, such as spreadsheet

and database software, on their own computers.

APPENDIX B: FOR MORE

XBRL Information xbrlinfo.htm

Oracle http://technet.oracle.com/tech/xmlPricewaterhouseCoopers http://www.pwcglobal.com

xbrl-publicXBRL Solutions, Inc http://www.xbrlsolutions.comXBRL Tools http://www.xbrl.org/resource

ex-CSS Cascading Style Sheets It is a means of ing the presentation from the structural markup Cas- cading Style Sheets level 1 (CSS1) is a W3C recom- mendation It describes the CSS language as well as a basic formatting model Cascading Style Sheets level 2 (CSS2), which is also a W3C recommendation, builds

separat-on CSS1 It includes media-specific style sheets (e.g., printers and aural devices), and element positioning and tables.

DTD Document Type Definition A DTD defines the tags the document type will use, what they mean, and whether, and to what extent, individual tags can be nested For example, HTML is a SGML DTD.

Element A concept described by a taxonomy For ample, the element with the name “nonCurrentAssets propertyPlantAndEquipmentNet” is a concept.

ex-HTML HyperText Markup Language, the basic guage for creating a Web page HTML consists of a set of markup symbols inserted into a file intended for display on a Web browser page The markup tags tell the Web browser how to display a Web page’s words and images for the user.

lan-Instance An XML document containing XBRL ments that together constitute one or more statements The financial statements of a specific company, ex- pressed in XBRL, would be an instance.

ele-Item A fact reported within a given period of time about

a given business entity Corresponds to an abstract XML element “item” in XBRL.

Markup The sequence of characters or other symbols that are inserted at certain places in a text or word processing file to indicate how the file should look when it is printed or displayed or to describe the doc- ument’s logical structure The markup indicators are often called tags.

SGML Standard Generalized Markup Language, an ternational standard for defining and using document structure and content SGML incorporates both data labeling and data presentation information but leaves procedural issues entirely to the rendering applica- tion.

in-Style Sheet A mechanism to describe how a document should be displayed A style sheet is prepared with a style sheet language Two of the most popular style sheet languages are CSS and XSLT.

Taxonomy A dictionary of the financial terms used in preparing financial statements or other business re- ports and the corresponding XBRL tags.

XBRL Extensible Business Reporting Language XBRL

is the financial profession’s adaptation of XML for nancial reporting A joint industry and government consortium, including the American Institute of Certi- fied Public Accountants (AICPA), six information tech- nology companies, and the five largest accounting and professional services firms, was established for this purpose in the fall of 1999.

fi-XBRL (E XTENSIBLE B USINESS R EPORTING L ANGUAGE ): B USINESS R EPORTING WITH XML 884

XML Extensible Markup Language XML was invented

by adopting the key functions of SGML while

exclud-ing the less essential ones It is extensible because the

language can be extended by anyone who wants to

cre-ate additional tags for new and unforeseen purposes.

It is a markup language because XML is a method of

tagging information using accepted rules and formats

to give definition to text and symbols.

XML Schema An XML-based alternative to a DTD to

de-scribe the structure, content and semantics of an XML

document.

XSLT Extensible Stylesheet Language Transformations,

a style sheet language designed specifically for use

with XML XSLT can transform XML into other

doc-uments, such as HTML or database, filter and sort

XML data, format XML data, add or remove elements

into/from the output file, and rearrange and sort the

element.

CROSS REFERENCES

See Cascading Style Sheets (CSS); Extensible Markup

Language (XML); Extensible Stylesheet Language (XSL);

HTML/XHTML (HyperText Markup Language/Extensible

HyperText Markup Language); Public Accounting Firms.

REFERENCES

APRA (n.d.) Retrieved April 29, 2003, from http://www.

apra.gov.au/

Boritz, J E., & No, W G (2002) Assurance reporting with

XML: XARL (extensible assurance reporting language).

Manuscript, University of Waterloo, Center for

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Clark, J (n.d.) Comparison of SGML and XML Retrieved

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from http://www.fpml.org/

Microsoft (n.d.) MSFT investor relations Retrieved

April 29, 2003, from http://www.microsoft.com/msft/

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Smith, M (1996) Complex typography: How an early

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com/reference/css/style-html.html

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ver-XBRL Home Page (2000) Retrieved August, 2001, from http://www.xbrl.org/

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FURTHER READING

Bosak, J (1997) XML, Java, and the future of the Web.

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Bosak, J., & Bray, T (1999) XML and the second generation Web Retrieved January, 2002, from http://www.sciam.

com / article.cfm ? articleID = B4A8809EC588EEDF

0008C786-91DB-1CD6-Floyd, M (1998) A Conversation with Charles F Goldfarb Retrieved January, 2002, from http://www.

webtechniques.com/archives/1998/11/beyo/

Halfhill, T R (1999) XML: the next big thing Retrieved

February, 2002, from http:// http://domino.research ibm.com/comm/wwwrthinkresearch.nsf/pages/xml199 html

Harold, E R (2001) XML Bible 2nd Edition New York:

John Wiley & Sons.

Hoffman, C., Kurt, C., & Koreto, R J (1999) The XML files Retrieved January, 2002, from http://www.aicpa.

MSDN online Web Workshop (2001) XML (extensible markup language) Retrieved April, 2002, from http://

msdn.microsoft.com/xml/general/index.htm

The CoverPages (1999) AICPA, Information ogy Companies, and Five Largest Accounting and Professional Service Firms Join Forces in Developing XML-Based Financial Reporting Language Retrieved

Technol-February 18, 2002, from http://xml.coverpages.org/ xfrmlAnn.html

Schatz, B R (1997) Information retrieval in digital

libraries: Bringing search to the net Science, 275, 327–334 Retrieved March 11, 2003, from http://www.

canis.uiuc.edu/archive/papers/science-irdl-journal.pdf

Schmidt, W C., & Cohen, E E (1999) A better language for utilizing the Web Retrieved February, 2002, from

http://www.nysscpa.org/cpajournal/f201199m.html Watson, L A., McGuire, B L., & Cohen, E E (2000).

Looking at business reports through XBRL-tinted glasses Retrieved April, 2002, from http://www.

strategicfinancemag.com/2000/09g.htm

W3C (1999) XML in 10 points Retrieved February,

2002, from points.html

http://www.w3.org/XML/1999/XML-in-10-XBRL Home Page (2000) Overview/facts sheet Retrieved

August, 2001, from http://www.xbrl.org/Faq.htm

XBRL Home Page (2000) Financial reporting for mercial and industrial gompanies, US GAAP Retrieved

com-F URTHER R EADING 885

August, 2001, from http://www.xbrl.org/us/gaap/ci/

2000-07-31/us-gaap-ci-2000-07-31.htm

XBRL Home Page (2000) Extensible business

report-ing language (XBRL) specification Retrieved August,

2001, from 2000-07-31.htm

http://www.xbrl.org/TR/2000-07-31/XBRL-XBRL Resource Center (2001) http://www.xbrl.org/TR/2000-07-31/XBRL-XBRL educational resource section Retrieved November, 2001, from http://web.

bryant.edu/ ∼xbrl/index.html Zarowin, S., & Harding, W E (2000) Finally, business

talks the same language Journal of Accountancy,

Au-gust, 24–30.

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Carlisle M Adams Senior

Cryptographer, Entrust, Inc

E Scott Adler University of Colorado,

Boulder

Fred J Aebli Penn State University

Van B Afes New York University

Ilieva Ilizastigui Ageenko Wachovia

Jim Allan Texas School for the Blind

and Visually Impaired

Kathleen Allen University of Southern

California

Marcus T Allen Florida Atlantic

University

Sheri Alpert University of Notre Dame

Patrick Alphonso Swamiware LLC

Maria Dolores Alvarez Bo ˘gaziçi

Fedor Andrianov The University of

California, Los Angeles

Marios C Angelides Brunel University,

Alfred W Arsenault Diversinet Corp.

Angelo Artale University of California,

Berkeley

Robert C Ash University Southeast

Okechukwu B Asobie University of

at Little Rock

Annelise J Bazar West Valley College Michael D Beavers Lake Land College Greg Becker University of Maryland Andrew Beckerman-Rodau Suffolk

University

Barton Beebe Yeshiva University Salvatore Belardo State University of

New York, at Albany

Colleen Bell University of Oregon Mary Ann Bell Sam Houston State

University

Thomas W Bennet Mississippi College Robert Berezdivin George Mason

University

Anthony K Betrus State University of

New York at Potsdam

B Bhagyavati Columbus State

Chico

Alex Bordetsky Naval Postgraduate

School, Monterey, California

Polly D Boruff-Jones Indiana

University Purdue UniversityIndianapolis

William H Bowers Penn State

Berks-Lehigh Valley College

Paul Bracke Arizona Health Sciences

New York at Buffalo

Stephen T Brower Raritan Valley

Anglia, United Kingdom

Gary Burnett Florida State University Ray Cafolla Florida Atlantic University Xiaomei Cai University of Delaware Metin Çakanyildirim University of

Texas at Dallas

Dean S Caldwell University of

Maryland, University College

Dale W Callahan University of

Heidi Campbell University of

Edinburgh, United Kingdom

Kim Sydow Campbell University of