Connecting with XBRL

1
XBRL For Banks - Use Cases and Corresponding
Demonstration Projects
8th XBRL International Conference Financial
Services Regulatory Reporting Special interest
Day November 5, 2003 Paul Penler, Principal,
Ernst YoungXBRL US Steering Committee - Vice
Chair
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Agenda

• Purpose and Approach
• Investor Reporting (External Financial)
• Demonstration Project 10 Banks Financial
  Statements
• Borrower Reporting (Credit Analysis)
• Demonstration Project 3 Banks, 25 Borrowers
• Internal Reporting
• Demonstration Project 1 Bank

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XBRL and Bank Use Cases

• Investor Reporting Investors/Lenders
• Internal Financial Reporting
• Borrower Reporting Credit Analysis
• Regulatory Reporting

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Investor Reporting
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(No Transcript)
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(No Transcript)
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Investor Reporting Demonstration Project
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Investor Reporting Demonstration Project

• Scope
• Development of External Financial Statements of
  10 Banks
• Process Followed
• Deliverables
• Custom Taxonomy Extension
• Instance Document (ID)
• Rendering/Viewing of ID
• Consumption of ID (Separate and Comparison)
• Results
• Demonstration

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Example of Banks Financial Statements in XBRL
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Borrower Reporting
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(No Transcript)
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Moodys
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Borrower Reporting Demonstration Project

• Scope
• Analysis of Borrower Financial Statements in XBRL
  
• Process Followed
• Deliverables
• Instance Document (ID)
• Rendering/Viewing of ID
• Consumption of ID (Separate and Comparison)
• Results
• Demonstration

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XBRL Demonstration Project
3 Accountants
3 Banks
25 Private Company SMEs
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Summary of Demonstration Project

• Three banks was successful in uploading and
  automatically populating its financial spreading
  database with XBRL statements. After this upload
  was complete, the banks were able to start the
  financial analysis within immediately without
  having to perform any manual data entry.
  However, being that this was a focused test
  effort, there were very little unknowns. As
  issues surfaced, they were able to rectify them.
  Nevertheless, the banks did run into some issues
  during the exercise but were none were considered
  major.   

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Borrower Reporting - The Process
Accountant generates and provided the Banks XBRL
Instance Document.
The banks consumed the XBRL instance documents
one did it through a Web Portal (Borrowers would
upload the Instance Document in a non-test
environment).
If a mapping does not occur automatically, an
analyst manually mapped it.
An application parsed and maps the XBRL Instance
Document to the credit software chart of accounts.
A database houses the mapping (between the US
GAAP V2 Taxonomy and the credit software chart of
accounts).
Credit Analysis Application
Data Base
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What we Learned Summary Observations

• It works! Ability exists today.
• Forecasted Benefits/Value propositions appear
  reasonable however, level of effort/costs need
  to decrease before they is a significant net
  benefit
• Identified/confirmed specific issues and
  obstacles,
• Ambiguous terminology within the US GAAP Taxonomy
  compared to MFA. For example, Notes Receivable"
  does not classify whether it should be considered
  current or non-current.
• Blended terminology within the US GAAP Taxonomy.
  For example, LoanShortTermLongTerm combines
  both the current and non-current value into one
  XBRL tag. There are two areas of concern with
  this issue. One, our XBRL application does not
  know whether this needs to be mapped to current
  or long term. Two, from an analytical
  standpoint, we may want to have a portion mapped
  to current and the rest to non-current. We are
  unable to do this currently for this specific
  XBRL tag.

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Breakthrough Process Improvements
Average Time for Updating Financial
Information11 days
Value-added Analysis and Decision-making?
90 time spent on Mechanics
With XBRL?
More Time for Analysis gt Better Analysis gt Less
Risk
Or
Mechanics
Analysis
Mechanics
Analysis
Mechanics
Analysis
Mechanics
Analysis
Process more loans in the same amount of time
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Internal Reporting
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SAP
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Internal Reporting Demonstration Project

• Scope
• Conversion of several months data in XBRL
• Process Followed
• Deliverables
• XBRL Data Development
• Interactive Displays of the Data
• Intranet Web Site
• Results
• Demonstration

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Questions andMore Information
Paul Penler, Principal, Ernst YoungXBRL US
Steering Committee - Vice Chair, AICPA XBRL
Implementation Task Force Chair paul.penler_at_ey.
com www.XBRLforBanks.com