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Enhancing Financial Analysis with XBRL Data Pooling at Deutsche Bundesbank

Learn how Deutsche Bundesbank leverages XBRL in a joint project with German financial institutes to create a pool of financial statements. Explore benefits, challenges, and the role of XBRL in improving data quality and analysis for over 70,000 groups annually.

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Enhancing Financial Analysis with XBRL Data Pooling at Deutsche Bundesbank

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  1. Adopting XBRL in theFinancial Statements Data Poolof Deutsche Bundesbank Dominik Elgg Deutsche BundesbankStatistics Department

  2. Contents • I. The Financial Statements Data Pool • 1. The project • 2. Benefits from pool • 3. Considered data and benchmark statistics • 4. Participation and status • II. XBRL as data format • 1. Information chain • 2. Issues and problems - Solution through XBRL • 3. Special requirements and examples • 4. Status and outlook • III. Advantages and challenges from a technical and programming perspective.

  3. I. Financial Statements Data PoolThe project • Joint project of Bundesbank and German financial institutes • Idea: Pool of financial statements which is filled by several contributors • Project rests upon the principles: • Voluntary participation • Reciprocity • Data protection (anonymous data) • Low costs for participants.

  4. Benefits from pool • Participants: extensive benchmark statistics (ratios) • Advantage of enlarged dataset • Bundesbank: continuation and extension of corporate financial statements statistics • Dataset is basis for micro- and macroeconomic analyses • Providing information (statistics) to the public • Compensation for reduction of Bundesbank‘s own dataset.

  5. Considered data • Financial statements of German companies: • Only individual accounts (no consolidated accounts so far) • Basically data on income statement and balance sheet • Non-financial companies • Only based on German Commercial Code.

  6. Benchmark statistics (financial ratios and differentiation) • More than 180 ratios • Preparation by sector, size, legal form, region and year • Differentiation as far as data protection allows • Quartiles as statistical parameters • Quarterly update of the statistic • Calculation of ratios for nearly 70.000 groups per year.

  7. Example

  8. Participation • Banks • Credit insurers • Datev • Other institutes with considerable datasets • Bundesbank • Current participation: 9.

  9. Current status • Database started 4th quarter 2003 • 125.000 financial statements per year (gross) • Deduction of duplicates • Deduction of deficient data • More than 85.000 financial statements per year (net) • Shipment of 4 benchmark statistics so far.

  10. II. XBRL as data format • Two different possibilities for sending data to Bundesbank: • XBRL • Alternative: plain text format.

  11. XBRL Information chain • Partner • Banks • Credit insurers • etc. Bundesbank Statistics • Ratios • Cash Flow • Profitability • Leverage • ... • ... by legal form • ... by sector • ... by size • ... by region • ...by year POOL Financial statement Financial statement Financial statement Financial statement Financial statement Database Financial statements of German non-financial companies

  12. Issues and problems • Participating institutes have different recording systems • Partners have different guidelines for keying data into the recording system • Bias in the data • Problems in the identification process of duplicates.

  13. Why XBRL? • Standardised, non-proprietary format for exchanging financial statements data • Data which comes directly from companies is qualitatively better than data that is manually keyed in into the recording system • In the long-term XBRL might lead to the same data scheme and guidelines, as a basis for analysing financial statements. • Scheme of pool dataset (relational database) is based on German taxonomy.

  14. The issue of data quality - examples • Several data sources with different data quality • Strict quality checks • About 10% loss of data in historic data due to big errors, maximum of 5% in actual data • Thousands of minor errors • With the XBRL test data we received so far: 0 errors.

  15. Specific requirements on data format • Anonymous data (data protection) • Separation of characteristics (e.g. legal form) from accounting entries (data protection) • Add-on items not represented in taxonomy • Creation of an extended XML/XBRL framework while keeping the advantages of XBRL.

  16. Example XBRL Instance Document <?xml version="1.0" encoding="iso-8859-1" standalone="no"?> <xbrlxmlns="http://www.xbrl.org/2001/instance" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" xmlns:t="http://www.xbrl.org/german/ap/ci/2002-02-15" xsi:schemaLocation="http://www.xbrl.org/german/ap/ci/2002-02-15 german_ap.xsd"> <numericContextid=“nc1“ precision=“5"cwa="false"> <entity> <identifierscheme="www.dax.de">ABC S.A</identifier> </entity> <period> <startDate>2000-01-01</startDate> <endDate>2000-12-31</endDate> </period> <unit> <measure>ISO4217:EUR</measure> </unit> </numericContext> <t:bs.assnumericContext=" nc1">11000000</t:bs.ass><!-- Total Assets--> <t:bs.ass.fixAssnumericContext=" nc1">8000000</t:bs.ass.fixAss><!-- Non current assets --> <t:bs.ass.currAssnumericContext=" nc1">2000000</t:bs.ass.currAss> <!-- Current assets--> ... <!-- ... --> <t:bs.eqLiabnumericContext=" nc1">11000000</t:bs.eqLiab><!-- Total equity & liabilities --> <t:bs.eqLiab.equitynumericContext=" nc1">3000000</t:bs.eqLiab.equity> <!-- Equity --> <t:bs.eqLiab.liabnumericContext=" nc1">7000000</t:bs.eqLiab.liab><!-- Liabilities --> ... <!-- ... --> </xbrl>

  17. Accounting entries <?xml version="1.0" encoding="iso-8859-1" standalone="no"?> <xbrlxmlns="http://www.xbrl.org/2001/instance" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" xmlns:t="http://www.xbrl.org/german/ap/ci/2002-02-15" xsi:schemaLocation="http://www.xbrl.org/german/ap/ci/2002-02-15 german_ap.xsd"> <numericContextid=“nc1“ precision=“5"cwa="false"> <entity> <identifierscheme="www.dax.de">ABC AG</identifier> </entity> <period> <startDate>2000-01-01</startDate> <endDate>2000-12-31</endDate> </period> <unit> <measure>ISO4217:EUR</measure> </unit> </numericContext> <t:bs.assnumericContext=" nc1">11000000</t:bs.ass><!-- Total Assets --> <t:bs.ass.fixAssnumericContext=" nc1">8000000</t:bs.ass.fixAss><!-- Non current assets --> <t:bs.ass.currAssnumericContext=" nc1">2000000</t:bs.ass.currAss> <!-- Current assets --> ... <!-- ... --> <t:bs.eqLiabnumericContext=" nc1">11000000</t:bs.eqLiab><!-- Total equity & liabilities --> <t:bs.eqLiab.equitynumericContext=" nc1">3000000</t:bs.eqLiab.equity> <!-- Equity --> <t:bs.eqLiab.liabnumericContext=" nc1">7000000</t:bs.eqLiab.liab><!-- Liabilities --> ... <!-- ... --> </xbrl>

  18. Context <?xml version="1.0" encoding="iso-8859-1" standalone="no"?> <xbrlxmlns="http://www.xbrl.org/2001/instance" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" xmlns:t="http://www.xbrl.org/german/ap/ci/2002-02-15" xsi:schemaLocation="http://www.xbrl.org/german/ap/ci/2002-02-15 german_ap.xsd"> <numericContextid=“nc1“ precision=“5"cwa="false"> <entity> <identifierscheme="www.dax.de">ABC AG</identifier> </entity> <period> <startDate>2000-01-01</startDate> <endDate>2000-12-31</endDate> </period> <unit> <measure>ISO4217:EUR</measure> </unit> </numericContext> <t:bs.assnumericContext=" nc1">11000000</t:bs.ass><!-- Total Assets --> <t:bs.ass.fixAssnumericContext=" nc1">8000000</t:bs.ass.fixAss><!-- Non current assets --> <t:bs.ass.currAssnumericContext=" nc1">2000000</t:bs.ass.currAss> <!-- Current assets --> ... <!-- ... --> <t:bs.eqLiabnumericContext=" nc1">11000000</t:bs.eqLiab><!-- Total equity & liabilities --> <t:bs.eqLiab.equitynumericContext=" nc1">3000000</t:bs.eqLiab.equity> <!-- Equity --> <t:bs.eqLiab.liabnumericContext=" nc1">7000000</t:bs.eqLiab.liab><!-- Liabilities --> ... <!-- ... --> </xbrl>

  19. Extended XML/XBRL framework(accounting entries) <?xml version="1.0" encoding="ISO-8859-1" ?> - <financialStatementDelivery xmlns="http://www.bundesbank.de/spool/datenlieferung/2003-01-01" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" xmlns:xbrli="http://www.xbrl.org/2001/instance" xmlns:t="http://www.xbrl.org/german/ap/ci/2002-02-15" xmlns:ISO4217="http://www.iso.org/4217" xsi:schemaLocation="http://www.bundesbank.de/spool/datenlieferung/2003-01-01 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>DEM</currency> - <xbrli:xbrl> - <xbrli:numericContext id="nc1" precision="8" cwa="false"> - <xbrli:entity> <xbrli:identifier scheme="urn:www.partner.de/">3,1/3</xbrli:identifier> </xbrli:entity> - <xbrli:period> <xbrli:startDate>2000-01-01</xbrli:startDate> <xbrli:endDate>2000-12-31</xbrli:endDate> </xbrli:period> - <xbrli:unit> <xbrli:measure>ISO4217:DEM</xbrli:measure> </xbrli:unit> </xbrli:numericContext> <t:bs.ass numericContext="nc1">1338066</t:bs.ass> <t:bs.ass.accountingConvenience numericContext="nc1">0</t:bs.ass.accountingConvenience> <t:bs.ass.accountingConvenience.changeDem2Eur numericContext="nc1">0</t:bs.ass.accountingConvenience.changeDem2Eur> <t:bs.ass.accountingConvenience.startUpCost numericContext="nc1">0</t:bs.ass.accountingConvenience.startUpCost> <t:bs.ass.currAss numericContext="nc1">749385</t:bs.ass.currAss> <t:bs.ass.currAss.cashEquiv numericContext="nc1">259760</t:bs.ass.currAss.cashEquiv>

  20. Status of XBRL project in data pool • Implementation completed • Successful tests with test data and authentic data • As the first partner, Datev will send XBRL data from this quarter on.

  21. III. Advantages and challenges Pros and Cons from a programming perspective: • Possible validation on sender side • Flexibility of XML • Lower effort of programming • Minor error rate • XBRL as non-proprietary format • Current ‘Hybrid‘ format • Some familiarisation with XBRL/XML • Dependency on external XBRL-specification • File size.

  22. Advantages from an accounting perspective • Structured data instead of paper or PDF’s • Non-proprietary standard • Separation of content from presentation • Flexibility: taxonomies can be created individually • Independent of information type (e.g. accounting standard) • XML as basis is rather easy to understand • Knowledge transfer: taxonomies can be created together (e.g. 1001 working groups filled by auditors, data receivers, software companies).

  23. Challenges from an accounting perspective • Dependency on an independent organisation (e.g. enduring specification) • [Dependency on software (companies)] • Sender has to be convinced of using XBRL.

  24. Outlook • Integration of IFRS financial statements: • Relevant for individual accounts from 2005 on (2006). • Potential integration of consolidated accounts • Use of IFRS (and SME-IFRS) taxonomy • Use of results of III WG on IFRS impact and CBSO databases (group of Manuel Ortega - Banco de España) • Use of potential extensions of German jurisdiction.

  25. Vision for the next 5 to 10 years • XBRL is used by all participants: sending and receiving • 10.000 to 20.000 financial statements of German companies based on SME-IFRS that can be compared to their European counterpart.

  26. ??? Questions & Answers !!!

  27. Contact information Dominik Elgg DEUTSCHE BUNDESBANK Financial Statements Data Pool Statistics Department Tel. +49 69 9566 8589 Email: dominik.elgg@bundesbank.de

  28. <end> Thank you very much! </end>

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