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German Financial Services Industry Focussing on XBRL. Norbert Flickinger XBRL Deutschland e.V. Member, Steering Committee XBRL International – November 2005. German Financial Services Industry Focussing on XBRL.

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German Financial Services Industry Focussing on XBRL

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    1. German Financial ServicesIndustry Focussing on XBRL Norbert Flickinger XBRL Deutschland e.V.Member, Steering Committee XBRL International – November 2005

    2. German Financial Services Industry Focussing on XBRL • Increasingly, the German Financial Services sector is making use of XBRL • Three typical examples • Deutsche Bundesbank (the German Central Bank):Data feed into an information pool for statistical assessments – supply chain with DATEV • Deutsche Börse (the Frankfurt Stock Exchange):Publicly accessible web based system for data collection, distribution, and assessment • Deutsche Bank (Germany's leading private bank): Data import into their credit risk analysis system

    3. Some Background Information • XBRL Taxonomies mainly to be considered • IFRSListed companies have to report their consolidated financials using IFRS, others may do so – this concerns up to 1000 entities • German GAAP (German Commercial Code) Every company has to apply German GAAP with non-consolidated figures, e.g. for tax filing – this concerns far more than 2 million entities • US-GAAPSome companies apply US-GAAP – global players, but a very low number

    4. Some Background Information • IFRS Taxonomy is available • Prepared by XBRL workgroup under the lead of IASCF • XBRL Germany, in cooperation with the workgroup, is in charge of adapting it to the use in the German market (extensions, translations, education) • German GAAP Taxonomy is available • A spec 2.0 version exists since 2002 developed by XBRL Germany • Enhanced version complying with spec 2.1 is close to completion

    5. Some Background Information • Software Vendors and Service Providers active in the German market • Besides global players including SAP, Software AG, Microsoft, Fujitsu, Hitachi ... • Also German companies focussing on the local market such as • DATEV, Nuremberg – www.datev.deSoftware & IT services, ERP system including data pool for financials of 2.4 mn businesses • S&N AG, Paderborn – www.s-und-n.deStandardised and tailor made solutions for banks, etc.

    6. Three typical examples • Deutsche Bundesbank's Project • Deutsche Börse's Project • Deutsche Bank's Project

    7. Deutsche Bundesbank's Project • Project summary • Data pool to collect financial statement data of German companies • Bundesbank has maintained such data pool for a long time • Phase of general technical reconstruction including XBRL functionality completed • The data pool is basis for micro- and macro-economic analyses • In addition, the results are fed back to the suppliers, aggregated information is shared with the public

    8. Deutsche Bundesbank's Project • Highlights of the data pool project • Cooperation with several partners (banks, etc.) delivering data on a voluntary basis • Processing of about 125,000 data sets a year • Main focus on balance sheet & income statement figures • Calculation of 180+ ratios per data set • Results grouped by industry, size, legal form, region, year (hypercube of about 70,000 cells) • Benchmark data delivered back to contributors

    9. Partner • Banks • Credit insurers • etc. Statistics Bundesbank XBRL • Ratios • Cash Flow • Profitability • Leverage • ... • ... by legal form • ... by sector • ... by size • ... by region • ... by year POOL Database Financial statements of German non-financial companies Deutsche Bundesbank's Project Graphic: Deutsche Bundesbank

    10. Deutsche Bundesbank's Project • Challenges • Harmonisation of data format (each contributor used to have its own) • Getting rid of manual data capturing (question of time & cost consumption, information quality) • Shortening the time to market period (quarterly update of statistics) • Filtering out duplicates (data are delivered in anonymous form, i.e. without IDs or names)

    11. Non-XBRL header XBRL spec 2.0 Deutsche Bundesbank's Project <?xml version="1.0" encoding="ISO-8859-1" ?> <financialStatementDelivery xmlns="" xmlns:xsi="" xmlns:xbrli="" xmlns:t="" xmlns:ISO4217="" xsi:schemaLocation=" spool.xsd" partnerName="Testpartner" partnerId=“0000000" creationDate="2003-01-01" deliveryId="1"> <financialStatement companyId="1" yearMonth="2000-12"> <reportType>h</reportType> <reportStatus>e</reportStatus> <incomeStatementType>g</incomeStatementType> <currency>EUR</currency> <xbrli:xbrl> <xbrli:numericContext id="nc1" precision="8" cwa="false"> <xbrli:entity> <xbrli:identifier scheme="">3,1/3</xbrli:identifier> </xbrli:entity><xbrli:period> <xbrli:startDate>2004-01-01</xbrli:startDate><xbrli:endDate>2004-12-31</xbrli:endDate> </xbrli:period><xbrli:unit> <xbrli:measure>ISO4217:EUR</xbrli:measure> </xbrli:unit> </xbrli:numericContext> <t:bs.ass numericContext="nc1">1338066</t:bs.ass> <t:bs.ass.currAss numericContext="nc1">749385</t:bs.ass.currAss> <t:bs.ass.currAss.cashEquiv numericContext="nc1">259760</t:bs.ass.currAss.cashEquiv> … Source: Deutsche Bundesbank

    12. Benchmark information delivered by Bundesbank Group Equity ratio Sector Size Legal form Year Quartile 1 Quartile 2 Quartile 3 Sales > €25mn Car supplier Corporation 2003 11,00% 20,0% 36,0% and < €50mn Own analysis of a consumer of benchmark information Company Equity ratio Assessment Car supplier 1 23,0% Equity funding above average Car supplier 2 17,0% Equity funding below average Car supplier 3 41,0% Excellent equity funding Deutsche Bundesbank's Project • Example result Source: Deutsche Bundesbank

    13. Deutsche Bundesbank's Project • Harvested benefits from implementing XBRL • Embedding in an extended XML framework • Concentration on just one technical and logical format • Support of strict quality checks • Significant enhancement of data quality • Ability to validate data at the sender's side • Less waste • And, of course, all other benefits XBRL does provide • In particular: Reduction of manual workload

    14. Deutsche Bundesbank's Project • Status of the project • XBRL supply chain with DATEV as a supplier is working • Next steps • Building supply chains with other suppliers • Extension to IFRS Taxonomy • Vision • Up to 20,000 statements of German companies based on SME-IFRS can be compared with their European peers

    15. Three typical examples • Deutsche Bundesbank's Project • Deutsche Börse's Project • Deutsche Bank's Project

    16. Deutsche Börse's Project • Motivation • Increasing transparency trough greater comparability • Breaking the impasse: no investor use / no issuers provide • Lead enables key determining influence and gains meaningful experience • Initiative supported by reputated partners • Potential for increased small and mid cap coverage

    17. Deutsche Börse's Project • Project summary • Web based data pool • Import of XBRL Instance Documents via Exchange Reporting System (ERS) – secure data transfer • Taxonomy derived from IFRS – high aggregation level, adaptation to the German market • Results publicly and free available • Pre-defined reports including peer group analysis • View/export as XBRL, HTML, Excel, PDF • Phase 1, processing quarterly reports: running • Extended version for annual reports: in preparation

    18. Deutsche Börse's Project

    19. Deutsche Börse's Project

    20. Peer group analysis Multiple reports Various export formats Deutsche Börse's Project

    21. Deutsche Börse's Project • Wider benefits for the German capital market • Provide a central database for listed company financial reports • Simplified access improves data quality and confidence • Enhanced coverage through electronic access • Cost and time efficient data processing • Data comparison / transparency

    22. Three typical examples • Deutsche Bundesbank's Project • Deutsche Börse's Project • Deutsche Bank's Project

    23. Deutsche Bank's Project • Deutsche Bank, like other banks, is affected by XBRL in several instances • XBRL as a format to collect borrowers' data (Credit Risk Management) • Own disclosures to shareholders and the public • Reporting to regulators • Reporting within the group for internal controlling including consolidation of data for external and regulatory reporting • "Lowest hanging fruit": data collection for CRM

    24. Deutsche Bank's Project • Some figures about Deutsche Bank's Credit Risk Management • About 3,000 employees in 20 countries around the globe ... • Process about 100,000 financial statements a year ... • Use one unique model covering all accounting standards to analyse financials as a core module in a comprehensive rating system – whereas ... • Information is held in one unique database communicating with many other systems in the bank's IT environment

    25. Deutsche Bank's Project • Motivation • Facilitate data exchange with customers, data providers, and own addressees • Targets • Replace today’s very heterogeneous landscape of data formats by a global common standard • Use potential for streamlining and enhancing financial analysis of customer data • Shift focus from input workload to analysis tasks • Allow for a paperless process in future

    26. Deutsche Bank's Project • Challenges • Workflow mix for a certain period: electronic data feed and manual capturing • Necessity to edit also electronically imported data for handling of technical and logical errors XBRL Instance Documents Paper based report Data Capturing & Transformation Engine Also: DOC, RTF, XLS, HTML, TXT, PDF, … Target Database

    27. Multi- Nationals (ICC) IFRS dominant MidCap Europe diversity of accounting standards number of customers Mix of IFRS and local GAAPs Private & Business Clients(PBC) Germany, Spain, Italy, Belgium, Poland Local GAAPs prevailing Deutsche Bank's Project • Challenges • Dealing with differing standards even XBRL based Graphic: Deutsche Bank

    28. Deutsche Bank's Project • Deutsche Bank's model can be seen as a private taxonomy • Rule-based transformation between taxonomies Deutsche Bank Accounting Model 400 T EUR 150 T EUR 400 T EUR 550 T EUR German AP Taxonomy (HGB) Graphic: Deutsche Bank

    29. Deutsche Bank's Project • Project status • Work ongoing, completion in 2006 scheduled • Main focus in the start phase • GermanAP v2 (German GAAP taxonomy, based on spec 2.1) • Selected suppliers • Dependencies • Availability of spec 2.1 compliant taxonomies • Sufficient number of XBRL Instance Documents available

    30. Questions? For further information on XBRL please refer to the web sites www.XBRL.orgInternational www.XBRL.deGerman