xbrl formulae in practice in regulatory environments: experiences and benefits

XBRL Formulae in Practice in Regulatory Environments: Experiences and Benefits

Víctor Morilla (Bank of Spain)

Manuel Rodriguez & Moira Lorenzo (Atos Origin)

Bank of Spain XBRL Project DetailsBank of Spain XBRL Project Details

3

2003

2004

2005

2007

2008

AppraisalCompanies

Project

2006

Public Statements

Nº Participants: > 50Nº Filings/year: > 200Nº Concepts: > 950


Moving towards XBRL: Phase 1Moving towards XBRL: Phase 1

LegacyDatabase

Sender

XBRL instance

XBRL FRONT-END

Validdata

Basic XBRL validations &Calculation linkbase

Business rules validations

IT SolutionIT Solution: Phase 1: Phase 1

1 2

3

Data reported in the same XBRL statement

Against other information in database (Ex: previous periods data)

4

2003

2004

2005

2007

2008

AppraisalCompanies

Project

2006

Public Statements

SolvencyInformation

(COREP)

FinancialStatements

(FINREP)



Nº Participants: > 300Nº Filings/year: ~1000Nº Concepts (EU): ~ 950Nº Dimensions (EU): 22Add. Concepts (ES): ~ 553Add. Dimensions (ES): 8

Nº Participants: > 300Nº Concepts (EU): ~ 1.700Nº Dimensions (EU): 12

2009

2010

Moving towards XBRL : Phase 2Moving towards XBRL : Phase 2

Mutual guarantee

Exchange Offices & Appraissal companies

Nº Participants: > 200Nº Concepts (ES): ~ 550Nº Dimensions (ES): 8

Nº Participants: > 200Nº Concepts (ES): ~ 200Nº Dimensions (ES): 10

5

XBRL Formula

LegacyDatabase

Sender

XBRL instance

XBRL FRONT-END

Validdata

Basic XBRL validations Business rules validations

1

23

Data reported XBRL Formula validation

IT SolutionIT Solution: Phase 2: Phase 2

Formula Errors are Formula Errors are informedinformed

Taxonomy viewer

Now (from summer 2008 to present)


6

Against other information in database (Ex: previous periods data)

Formula linkbase developmentFormula linkbase development

Business Rules document

Documents Reference numbers

& classification

Formulae linkbaseFormulae

Linkbase + corrected

Business Rules

document Analysis

Developing Formulalinkbase

Instance generation

& testing

7

8

Starting point : Financial statements

FinancialStatements

Businessuser

Businessrules

+

Initial business rules

1. 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)

Input documents (II)Input documents (II)

9

FinancialStatements

Businessuser

Businessrules

+

Business rules

12

They think at an abstract business level

They write in technical terms(cell codes)

Business user

3

IT Analyst

IT Analyst

We infer the conceptual information from cells detail

Formularules

4 We write formula rules in abstract level

Documents in technical terms Documents in technical terms

10

- Consistency, value & existence assertion

- One single formula can solve many rules

Analysis business rules documentAnalysis business rules document

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

8 business rules 1 XBRL formula

(1) Classification

(2) Reference numbers

Reference number: 3035-sv-1

Total positions is equal to the sum of its breakdown by market risk

11

LimitationsLimitations

(Identifying future improvements)

0001>= 0001(previous quarter)

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

In this case we are detecting them and taking note for developing improvements in the future

There is only the information contained in the instance

12

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

AssertionAssertion

Label: “Operational risk capital requirements not consistent with its breakdown by method applied”

Reference: 3035-sv-1

How errors are informedHow errors are informed

13

Software – Taxonomy viewerSoftware – Taxonomy viewer

14

Software – Taxonomy viewer detailSoftware – Taxonomy viewer detail

(es) prestamos en garantía menor o igual que cartera de negociación(es) prestamos en garantía menor o igual que cartera de negociación

15

- 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 formulasmantainabilityDimensional tables designSubstitutionGroup level design

Conclusions: implicityConclusions: implicity

16

Conclusions: MaintainabilityConclusions: Maintainability

Business

rules

XBRL

Formulae%

COREP 3400 400 11,76%

FINREP 1200 120 10%

Mutual guarantee

(financial)

460 120 26,08%

Mutual guarantee

(solvency)

170 45 26,47%

Capital planning

(financial institutions)

50 9 18%

Total 5280 694 13,14%

5280

694

0

1000

2000

3000

4000

5000

Columnas 3D 1 Columnas 3D 2

Number of business rules

Number of XBRL formulas

17

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

Conclusions: Resources estimation (I)Conclusions: Resources estimation (I)

Training Debugging Effective work

IT

First project (COREP)

AnalysisDevelopmentTesting

18

40 %30 %

30 %

IT

About 100 XBRL Formula in 8 working days

(analysis & development & tests)

Conclusions: Resources estimation (II)Conclusions: Resources estimation (II)

Trainning DebuggingAnalysis DevelopmentTest

Resources distribution

Currenty (2009)

19

2 % 5 %

33 %

40 %

20 %

2008 2009

COREP developmentstarts

In production COREP

In production FINREP subset

May Sep

Development startedFINREP subset

In production Solvency for Mutual guarantee companies

Development startedMutual guarantee (solvency templates)

Development started Mutual guarantee (financial templates)

In production Capital evaluation report

Development started Financial institutions (capital planning)

In production Mutual guarantee (financial templates)

Development started Exchange Offices & Appraissal companies

Next in production Exchange Offices & Appraissal companies

Nov Jan Feb Mar Apr May Jun Sep

Conclusions:Formulas in taxonomies is a Conclusions:Formulas in taxonomies is a reality nowreality now

20

Sender

XBRL instance

XBRL FRONT-END

Validdata

Basic XBRL validations 1

2

3

Phase 3: Full business rules validation with XBRLPhase 3: Full business rules validation with XBRL

Errors are Errors are communicatedcommunicated

Taxonomy viewer


Current development

21

Against other information in database(Ex: previous periods data)

Data reported XBRL Formula validation