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Reducing reporting burden on non financial corporations: Combining XBRL and IFRS in European Central Balance Sheet Data

Reducing reporting burden on non financial corporations: Combining XBRL and IFRS in European Central Balance Sheet Data Offices. Manuel Ortega. Head of the Central Balance Sheet Data Office of Banco de España / III WG of the ECCBSO Chair / Strategy Committee of XBRL Spain Chair

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Reducing reporting burden on non financial corporations: Combining XBRL and IFRS in European Central Balance Sheet Data

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  1. Reducing reporting burden on non financial corporations: Combining XBRL and IFRS in European Central Balance Sheet Data Offices • Manuel Ortega. Head of the Central Balance Sheet Data Office of Banco de España / III WG of the ECCBSO Chair / Strategy Committee of XBRL Spain Chair • Josef Macdonald. IASC Foundation XBRL Practice Fellow / IFRS Taxonomy Working Group Chair / IASB IT Discussion Group Chair

  2. AGENDA • Background • ECCBSO and III WG • Standard Formats • ECCBSO/IASCF Joint XBRL Project • Annex: CBSO of Europe

  3. THE OPPORTUNITY TO COMBINE STANDARDS Corporations face the workload of external reporting • Different demanders: • Tax authorities • Mercantile registers • Statistical units • Commercial banks • Shareholders • University researches • Local and central government • Different levels of detail • Different timing • Different “computer languages”

  4. THE OBLIGATION FOR COMBINING STANDARDS IN EUROPE Brussels European Summit, 20th-23th March, 2003: • Reduction of reporting burden on companies Directive 2003/58/EC: • Elimination of paper before 2007 Corporation data, subject to this Directive, to be presented/demanded in public registers: • Can be presented in electronic formats by companies • Can be demanded in electronic formats by users

  5. THE NEED TO COMBINE STANDARDS XBRL, only for large listed corporations? NO: also necessary for SMEs, millions of corporations affected in Europe • Data available for Denmark, Finland, Italy, Luxemburg, Norway, Portugal, Spain, Sweden and United Kingdom. • Data not available for United Kingdom • Source: Eurostat and European Securities Exchange Statistics

  6. WHY XBRL TAXONOMIES? • Good for users, CBSO among others, that: • Profit from comparability • Need to reduce costs and make access to data easier • But also for companies, that: • Want to know their obligations • Especially when an accounting change is coming

  7. AGENDA • Background • ECCBSO and III WG • Standard Formats • ECCBSO/IASCF Joint XBRL Project • Annex: CBSO in Europe

  8. EUROPEAN COMMITTEE OF CENTRAL BALANCE SHEET DATA OFFICES (ECCBSO) • Informal group of CBSO‘s belonging to NIS and NCB • Experience using accounting data for several purposes: • Risk assessment • Economic analysis • Statistics • Common tool: corporation's annual accounts • Different goals, different questionnaires • 5 working groups: Risk assessment, BACH database, ESD database, Study WG, IFRS impact and CBSO databases (III WG)

  9. III WG OF THE ECCBSO Targets: • Monitor and report to the ECCBSO on IFRS implementation process, new projects and its impacts on CBSO • XBRL and CBSO • Creation of an IFRS-based format and its taxonomy extension. Use of real examples

  10. AGENDA • Background • ECCBSO and III WG • Standard Formats • ECCBSO/IASCF Joint XBRL Project • Annex: CBSO in Europe

  11. IFRS-based standard format: strategic plan • Use of IFRS-GP XBRL taxonomy • Monitoring with real examples (11 listed groups in 2005; over 200 in 2006) • Creation of an extended version • Definition of “essential information”, and creation of a common and reduced format • Creation of a taxonomy: work in collaboration with IASCF-XBRL Team • Creation of instance documents from real cases • Database with 200 European groups; analysis

  12. Contents of the extended format (R): also in reduced format • General characteristics (R) • Options IAS • Business combinations (R) • Consolidation (R) • Employment (not required by any IFRS) (R) • Balance sheet (R) • Income statement (by function or by nature) (R) • Statement of changes in equity (R) • Cash-flow statement (direct, indirect or indirect alternative) (R) • Notes

  13. There is a note for each of the following items: Property, plant and equipment (R) Borrowings and payables Investment property (R) Borrowings movements Intangible assets (R) Income tax Biological assets Defined benefit post-employment plans Financial assets (R) Equity Current assets Related parties Provisions and grants (R) Segment reporting Hedging instruments and risk Assets held for sale

  14. ECCBSO Standard Format (B/S):

  15. ECCBSO Standard Format (I/C):

  16. AGENDA • Background • ECCBSO and III WG • Standard Formats • ECCBSO/IASCF Joint XBRL Project • Annex: CBSO in Europe

  17. XBRL SHOWCASE

  18. AGENDA • Background • ECCBSO and III WG • Standard Formats • ECCBSO/IASCF Joint XBRL Project • Annex: CBSO in Europe

  19. III WG: CBSO of Austria Targets: • In-house credit risk assessment, collateral within Eurosystem • Statistical analysis Information available: • 2,500 (individual and consolidated) XBRL plans: • Foreseeable use for COREP

  20. III WG: CBSO of Belgium Targets: • Legal mission: collect and process annual accounts of non-financial corporations Information available: • 275,000: 100% coverage XBRL works and plans: • Filing annual accounts in 2007, with XBRL: 300,000 corporations involved • Final version of Belgium taxonomy by end of 2005

  21. III WG: CBSO of France Targets: • Macro and microeconomic analysis • Banking supervision and individual diagnosis • Risk assessment and portfolio analysis Information available: • Several databases: CBSO (30,000), FIBEN (188,000), Consolidated database (3,500 groups) XBRL plans: • Coordination with banking supervision for new reporting documents (Capital Requirements, others)

  22. III WG: CBSO of Germany Targets: • Risk assessment • Statistical information • Economic analysis Information available: • Several databases: anonymous & individual (105,000, 75% coverage), individual & consolidated (25,000) XBRL works and plans: • Use of XBRL in data pool of Statistics Department • Membership of banking supervision department in COREP

  23. III WG: CBSO of Italy Targets: • Collection and reprocessing of financial statements • Development of methods for corporate analysis Information available: • Several databases: individual (45,000), consolidated (800 groups). 47% coverage XBRL plans: • Follow developments in Italy

  24. III WG: CBSO of Portugal Targets: • Statistical information • Economic analysis Information available: • Several databases: annual (18,000 / 58% coverage) and quarterly (3,300 / 41% coverage) XBRL plans: • Follow developments in Portugal

  25. III WG: CBSO of Spain Targets: • Statistical information • Economic analysis Information available: • Several databases: annual (8,500 / 35%), annual from mercantile registers (450,000 / 12%) and quarterly (1,000 / 15%) XBRL works and plans: • Creation of taxonomy for CBSO • Other, at Banco de España: • currently receiving data with XBRL from Appraisal companies and commercial banks • COREP project / Anti laundering commission

  26. THANK YOU FOR YOUR ATTENTION Manuel Ortega/Josef Macdonald

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