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XBRL Formulae in Practice in Regulatory Environments: Experiences and Benefits

19 th XBRL International Conference “Reducing regulatory burden with XBRL: a catalyst for better reporting” June 22-25, 2009 Paris, France. XBRL Formulae in Practice in Regulatory Environments: Experiences and Benefits. Víctor Morilla (Bank of Spain)

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XBRL Formulae in Practice in Regulatory Environments: Experiences and Benefits

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  1. 19th XBRL International Conference“Reducing regulatory burden with XBRL: a catalyst for better reporting”June 22-25, 2009Paris, France XBRL Formulae in Practice in Regulatory Environments: Experiences and Benefits Víctor Morilla (Bank of Spain) Manuel Rodriguez & Moira Lorenzo (Atos Origin)

  2. Bank of Spain XBRL Project Details

  3. 2003 2004 2005 2007 2008 2006 Movingtowards XBRL: Phase 1 Nº Participants: > 300 Nº Filings/year: > 7000 Nº Concepts: > 650 Nº Participants: > 50 Nº Filings/year: > 200 Nº Concepts: > 950 Public Statements Appraisal Companies Project

  4. Sender IT Solution: Phase 1 Valid data Legacy Database XBRL instance XBRL FRONT-END • Business rules validations 1 • Basic XBRL validations & • Calculation linkbase Data reported in the same XBRL statement 2 3 • Against other information in database • (Ex: previous periods data)

  5. 2003 2004 2005 2007 2008 2006 2010 2009 Moving towards XBRL : Phase 2 Nº Participants: > 300 Nº Concepts (EU): ~ 1.700 Nº Dimensions (EU): 12 Nº Participants: > 300 Nº Filings/year: ~1000 Nº Concepts (EU): ~ 950 Nº Dimensions (EU): 22 Add. Concepts (ES): ~ 553 Add. Dimensions (ES): 8 Nº Participants: > 200 Nº Concepts (ES): ~ 200 Nº Dimensions (ES): 10 Financial Statements (FINREP) Exchange Offices & Appraissal companies Solvency Information (COREP) Nº Participants: > 300 Nº Filings/year: > 7000 Nº Concepts: > 650 Mutual guarantee Nº Participants: > 50 Nº Filings/year: > 200 Nº Concepts: > 950 Public Statements Nº Participants: > 200 Nº Concepts (ES): ~ 550 Nº Dimensions (ES): 8 XBRL Formula Appraisal Companies Project 5

  6. Sender IT Solution: Phase 2 Now (from summer 2008 to present) Valid data Legacy Database XBRL instance XBRL FRONT-END Taxonomy viewer 1 • Basic XBRL validations • Business rules validations Formula Errors are informed Data reported XBRL Formula validation • Against other information in database • (Ex: previous periods data) • Business rules validations 3 2

  7. Formula linkbasedevelopment Business Rules document Analysis Business Rules document Documents Reference numbers & classification Developing Formula linkbase Instance generation & testing Formulae linkbase Formulae Linkbase + corrected

  8. Input documents (I) Financial Statements Business rules Business user + Starting point : Financial statements

  9. Input documents (II) Financial Statements Business rules Business user Initial business rules + • Amounts: • 0001=0005+0010+0015+0018+0019 • 0005=0006+0007 • 0010=0011+0012 • 0021=0025+0030+0035+0036+0037+0038+0039 • 0025=0026+0027 • 0030=0031+0032 • 0041=0045+0050+0057 • 0061=0066+0070+0077 • 2. Other internal relationship • At least one of the keys 0001 and 0021 must be different from 0 • 0041<=0061 • 0045<=0065 • 0060<=0070 • 0001>= 0001(previous quarter)

  10. Documents in technical terms Business user They write in technical terms (cell codes) 2 1 Business rules They think at an abstract business level IT Analyst Formula rules We infer the conceptual information from cells detail 3 We write formula rules in abstract level 4 IT Analyst

  11. Analysis business rules document • Consistency, value & existence assertion • One single formula can solve many rules (1) Classification (2) Reference numbers Business rules (legacy system): 0001=0005+0010+0015+0018+0019 0005=0006+0007 0010=0011+0012 0021=0025+0030+0035+0036+0037+0038+0039 0025=0026+0027 0030=0031+0032 0041=0045+0050+0057 0061=0066+0070+0077 Reference number: 3035-sv-1 Total positions is equal to the sum of its breakdown by market risk 1 XBRL formula 8 business rules

  12. Limitations There is only the information contained in the instance (Identifying future improvements) • Sometimes the business rules refer to concepts not included in the same XBRL instance (even not in XBRL format – for instance, another information stored in database -): • - Concepts related to other taxonomies • - Previous period information • Non-XBRL data 0001>= 0001(previous quarter) In this case we are detecting them and taking note for developing improvements in the future

  13. Howerrors are informed Assertion • Each assertion has: • - A reference number • - A label that describes the error • When an assertion is not satisfied the following information is sent to the user: • - The reference number • - The label describing the error • - The expression that failed • - The value of each input variable • - In the case of consistency assertion: • The calculated value • The reported value Reference: 3035-sv-1 Label: “Operational risk capital requirements not consistent with its breakdown by method applied”

  14. Software – Taxonomyviewer

  15. (es) prestamos en garantía menor o igual que cartera de negociación Software – Taxonomyviewerdetail

  16. Conclusions: implicity • 85% of formulas follow very simple patterns: Arithmetic expressions (A = B + C) Comparison expressions (A < B + C) Conditional expressions (if A > B then C = D + E) • A good taxonomy design (a good data model) improves the formulasmantainability Dimensional tables design SubstitutionGroup level design

  17. Conclusions: Maintainability Number of business rules Number of XBRL formulas

  18. Conclusions: Resourcesestimation (I) First project (COREP) IT About 400 XBRL Formula for 3.400 business rules About 120 working days = 5,5 months/ one person (2 months with 4 people part time) Resources distribution 30 % 40 % 30 % Analysis Development Testing

  19. Conclusions: Resourcesestimation (II) Currenty (2009) IT About 100 XBRL Formula in 8 working days (analysis & development & tests) Resources distribution 2 % 5 % 20 % 33 % 40 %

  20. Conclusions:Formulas in taxonomiesis a realitynow 2008 2009 May Sep Nov Jan Feb Mar Apr May Jun Sep In production FINREP subset In production COREP In production Mutual guarantee (financial templates) Development started Mutual guarantee (solvency templates) COREP development starts Development started FINREP subset Next in production Exchange Offices & Appraissal companies In production Solvency for Mutual guarantee companies Development started Financial institutions (capital planning) Development started Mutual guarantee (financial templates) In production Capital evaluation report Development started Exchange Offices & Appraissal companies

  21. Sender Phase 3: Full business rules validationwith XBRL Current development Valid data XBRL instance XBRL FRONT-END Taxonomy viewer 1 • Basic XBRL validations Errors are communicated • Business rules validations Data reported XBRL Formula validation 2 3 • Against other information in database • (Ex: previous periods data)

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