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Index. Good practices and considerations Problems Future challenges. Good practices and considerations. Taxonomy driven model. XBRL taxonomies define: Business concepts Relations between business concepts Relations between business concepts and other resources - PowerPoint PPT Presentation
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Information Systems and Processes
XBRL at the Bank of Spain
Experiences, problems and challenges
Ángeles Lozano
Víctor Morilla
1st Technical Meeting of European XBRL implemented projects
MADRID
5/10/2006
2INFORMATION SYSTEMS AND PROCESSES
Index
Good practices and considerations
Problems
Future challenges
3INFORMATION SYSTEMS AND PROCESSES
Good practices and considerations
4INFORMATION SYSTEMS AND PROCESSES
Taxonomy driven model
XBRL taxonomies define:–Business concepts–Relations between business concepts–Relations between business concepts and other resources
XBRL is a comprehensive language to express business metadata
Changes in the taxonomy should not impact on the system
Taxonomies as an input
5INFORMATION SYSTEMS AND PROCESSES
Taxonomy driven model example
XBRLDocume
nt
HTMLDocume
nt
XSLTProcess
or
XSLT XSLTProducer
Taxonomy
6INFORMATION SYSTEMS AND PROCESSES
Taxonomy driven model
Benefits:–More flexible design–Reduce errors–Only structural changes need development
Let the taxonomy be your guide !
7INFORMATION SYSTEMS AND PROCESSES
Taxonomies and data models
Avoid designing taxonomies based on specific views of the dataAnalysts should see the data model behind
8INFORMATION SYSTEMS AND PROCESSES
Taxonomies and data models
Total incomes by country should be equal to total incomes by product
–We need one rule:•TotalIncomes = IncomesByProduct
Calculate total benefits and benefits by country–We need four new formulas:
•TotalBenefits = TotalIncomes – TotalExpenses•BenefitsInSpain = TotalIncomesSpain – ExpensesInSpain•...
Add 3 new countries:–We need 9 new concepts–We need 3 new calculation rules
9INFORMATION SYSTEMS AND PROCESSES
Taxonomies and data models
With a good design:–Two items:
•Incomes•Expenses
–Two dimensiones:•Country dimension (Spain, Italy, France...)•Product dimension (TVs, Radios, Fridges...)
items
countries
products
10INFORMATION SYSTEMS AND PROCESSES
Taxonomies and data models
Total incomes by country should be equal to total incomes by product
–This rule is implicit to the modelCalculate total benefits and benefits by country
–We need to add one formula:•Benefits = Incomes –Expenses
Add 3 new countries:–We just need to add 3 new countries
11INFORMATION SYSTEMS AND PROCESSES
Taxonomies based on data models
Benefits–Reduce redundancy–Improve consistency–Improve maintainability–Improve flexibility
The team that develops a taxonomy needs:–Business analysts–IT analysts
12INFORMATION SYSTEMS AND PROCESSES
Reporting process
The reporting process is defined by:–Communication channel–XBRL Taxonomy–Instance documents–Additional data
13INFORMATION SYSTEMS AND PROCESSES
Reporting process: taxonomy entry points
Every instance document must refer to:–At least, one schema file–Any number of linkbase files
High number of possible combinations !Taxonomy entry points constrain the number of combinationsEmpty schemas that refer to predefined combinations of taxonomy files
14INFORMATION SYSTEMS AND PROCESSES
Reporting process: taxonomy entry points
COREP and FINREP define a multidimensional data model:
–A set of primary items–A set of dimensions (and its members)–The set of possible combinations of primary items and dimensions (facts)
COREP templates define subsets of the whole data modelSome COREP templates overlap COREP
multidimensionaldata model
15INFORMATION SYSTEMS AND PROCESSES
Reporting process: taxonomy entry points
Entry points reduce redundancy on instance documents:–XBRL representation of data does not depend on the template–Information does not have to be filed twice
Entry points reduce complexity of the reporting process
Entry points help improving the consistency of data–Entry points join together highly coupled templates
16INFORMATION SYSTEMS AND PROCESSES
Reporting process: constrains on instance documents
Monetary unitPrecisionNumber of entities and time periods reported in one single instance document
Bank of Spain:–Monetary unit must be Euro–Precision must be of at least thousands–One entity and one period per instance document
17INFORMATION SYSTEMS AND PROCESSES
Reporting process: additional data
Taxonomies define business dataReporting process need additional data
–Who is the sender of the information?–When the information was extracted?
It is important to differentiate process data from business data
Spanish project will use a taxonomy, common to every entry point, for this data:
–Sender of the information–Time period reported–Entity reported–List of templates submitted–List of templates not submitted because don’t apply
We have avoided to include this information as part of the context
18INFORMATION SYSTEMS AND PROCESSES
Reporting process: group and individual information
Holdings of company groups report information:
–Individual: as a single company–Consolidated: as a group of companies
Two alternatives:–Including one additional dimension: individual / consolidated–Considering the group as a different entity
•Single company has code 0456•The group has code 0-0456
ACME Corp
ACME Electronics ACME pharmacs ACME books
19INFORMATION SYSTEMS AND PROCESSES
General project considerations
XBRL as the only format available to file data?
–XBRL scares people–Several choices:
•Allow more than one format–Easiest for financial entities–Two formats must be maintained
National Bank
Financialentity Financial
entity
Financialentity
xml xbrlxbrl
20INFORMATION SYSTEMS AND PROCESSES
General project considerations
XBRL as the only format available to file data?
–XBRL scares people–Several choices:
•Allow more than one format•Only XBRL
–Key: establish a fluent relationship with bank’s software providers
National Bank
Financialentity Financial
entity
Financialentity
xbrl xbrlxbrl
21INFORMATION SYSTEMS AND PROCESSES
General project considerations
XBRL as the only format available to file data?
–XBRL scares people–Several choices:
•Allow more than one format•Only XBRL•XBRL is the only format allowed, but providing a translation tool
–Very similar to German solution–Entities to consider providing XBRL directly–Translation tool must be maintained
National Bank
Financialentity
Financialentity
Financialentity
xbrl xbrlxbrl
txt
22INFORMATION SYSTEMS AND PROCESSES
General project considerations
Error management–Expect information with errors–Design carefully how errors and exceptions are handled
•Don’t impose constrains that are not needed•Notify errors with clear user messages and suggested corrections•Budget support resources•Use log files to store errors and warnings
23INFORMATION SYSTEMS AND PROCESSES
General project considerations
Providing helper services– Instance validation tool– Instance visualizing tool–Taxonomy dictionary–Taxonomy browser
Or relying on third parties to provide this services
24INFORMATION SYSTEMS AND PROCESSES
General project considerations
Software platform: –Validation–Visualization–Instance creation (e-forms)–ETL
XBRL market tools vs. in-house development
Spanish COREP:–Commercial XBRL engine for validation–Visualization and ETL based on XSLT, but using the API of the XBRL engine
25INFORMATION SYSTEMS AND PROCESSES
General project considerations
Project deployment–Communication plan
•Appoint meetings with financial entities•Appoint meeting with software providers
–Real data for testing•System implementation•Taxonomy implementation•Adequacy of business rules•Performance
–Support•Budget support resources
26INFORMATION SYSTEMS AND PROCESSES
Problems
27INFORMATION SYSTEMS AND PROCESSES
Closed and open reporting models
The closed model constrains the data to be filed:–What MUST be filed–What CAN be filed–Any other information cannot be filed–Regulators following a closed reporting model don’t allow extra information to be sent
The open model just establishes a set of guidelines–Entities can extend the information
28INFORMATION SYSTEMS AND PROCESSES
Closed and open reporting models
XBRL does not support some basic constrains required by a closed reporting model:
–Data that must be filed•An empty instance document is valid
It will be possible to express these constrains with the future formula linkbase:
–Possible = adequate ?
29INFORMATION SYSTEMS AND PROCESSES
Calculation linkbase not enough
Calculation linkbase allows definitions of summation items networks
Other basic arithmetic operations are not allowedWith formula linkbase will be possible
Summation across dimension members is not possibleWith formula linkbase will be possible
–Possible = adequate ?–Calculation linkbases are extensible–Formulas linkbases will be–But individual formulas won’t
30INFORMATION SYSTEMS AND PROCESSES
Calculation linkbase not enough
Summation checks are run when an instance document contains at least one value for each part of the equation:
–A = B + C + D
–A=10–B=5–C=2
–D=3
OK
–A=10–B=5–C=0
–D=0
Wrong!
–A=10–B=5
Wrong!
31INFORMATION SYSTEMS AND PROCESSES
Modularization
Modularization should make easier reusing available taxonomiesInstead of importing the whole taxonomy, you just import a partIt is the author of the extended taxonomy the one that decides the criteria to split the taxonomy
COREP modular design:–One taxonomy per dimension (14)–One primary items taxonomy per business template (18)–Some common primary items taxonomies (3)–One template taxonomy per business template (18)
32INFORMATION SYSTEMS AND PROCESSES
COREP dependencies graph of t-mi template
33INFORMATION SYSTEMS AND PROCESSES
COREP dependencies graph of t-mi template Spanish extension
34INFORMATION SYSTEMS AND PROCESSES
Modularization
Is modularization something users should be really care?
Should this “modularization” issue be solved by XBRL technology instead of taxonomy designers?
Have a look at the presentation “Large Taxonomies, Small Footprint” by the Fraunhofer Institute at the Madrid XBRL International Congress
35INFORMATION SYSTEMS AND PROCESSES
Challenges
36INFORMATION SYSTEMS AND PROCESSES
Evolution of the SIIF project
Financial entities Bank of Spain
SIIF (XBRL) FIN (Mainframe)
Financial statements (flat files)Complex
validations
<2005
2005Basic
validationsBasic
validations
Other statements (flat files)
Public statements (XBRL) Complex
validations
2007 Complexvalidations
Complexvalidations
Other statements (flat files)
PE, Basel II (XBRL)Complex
validations
200? Complexvalidations
Complexvalidations
Financial statements(XBRL)
Complex validations
20??Complex
validationsComplex
validationsFinancial statements
(XBRL)
Otherapplications
37INFORMATION SYSTEMS AND PROCESSES
Evolution of the SIIF project
Improve the quality of data–Validation at the origin–Accurate definition of data
Flexibility (taxonomy driven model)Better data model: better analytical capabilities
38INFORMATION SYSTEMS AND PROCESSES
Inter-instance validation
Validations between different time periodsValidations between different statementsValidations with data from other systemsCurrent calculation and formula linkbases work on instance document levelInter-instance validation is not considered
39INFORMATION SYSTEMS AND PROCESSES
Inter-instance validation
One possible solution:–Produce auxiliary instance documents that put together information from different time periods, statements, ...–Run validation on these instance documents–These instance documents would be defined by “internal taxonomies”
Performance?Maintainability?
Financial entities
XBRL
Instancebuilder
Single instancevalidation
XBRL
PublicTaxonomy
PrivateTaxonomy
Inter-instancevalidation
XBRL
40INFORMATION SYSTEMS AND PROCESSES
Inter-instance validation
Validation engine with storage integrated solutionsTaxonomy designers defines rulesXBRL engine knows where to get proper instance documentsState of the art of technology?
41INFORMATION SYSTEMS AND PROCESSES
XBRL Storage and operation
Which is the best solution to store XBRL data?Relational databases?XML databases?Mixed solutions?
42INFORMATION SYSTEMS AND PROCESSES
Versioning
How to minimize the impact of new versions on our systems?How to deal with new versions of taxonomies imported by our taxonomies?How to compare data defined by different versions of the same taxonomy?
43INFORMATION SYSTEMS AND PROCESSES
Link role registry
XBRL taxonomies define:Business conceptsRelations between concepts
There is a set of standard relations:Calculation linkbaseReference linkbasePresentation linkbase ...
But XBRL allows user-defined arc-roles: user-defined relationsXBRL International’s Link Role Registry to include user-defined arc-rolesEfficient way to extend XBRL without touching core specification
Should we promote to the link role registry arc-roles that cover our common needs?
Information Systems and Processes
Thanks for your attention !Ángeles Lozano, Víctor Morilla
45INFORMATION SYSTEMS AND PROCESSES
Design stage: business rules
Current XBRL specification has limited validation capabilitiesXBRL Formula will not be available in short timePossible solutions:
–Define our own implementation of formulas•XBRL allows user defined arc roles and attributes•Flexible, but expensive solution
–Use a propietary formula implementation•State of the art of formula and dimensions ?
–Develop specific code to solve your current needs
46INFORMATION SYSTEMS AND PROCESSES
Design stage: taxonomy driven model
XBRL taxonomies define:–Business concepts–Relations between business concepts–Relations between business concepts and other resources
XBRL is a comprehensive language to express metadata
Changes in the taxonomy should not impact on the systemTaxonomies as an input:
–More flexible–Reduce errors–Only structural changes need development
Let the taxonomy be your guide !
47INFORMATION SYSTEMS AND PROCESSES
Design stage: cache issues
High number of documents in short timeXBRL validation can be a heavy processBut, loading XBRL taxonomies is the more expensive oneCache mechanismsEntry points simplify the problem
Nu
mb
er
of
docu
men
tsre
ceiv
ed
Due data Due data
Submission period Submission period
48INFORMATION SYSTEMS AND PROCESSES
Reporting process
COREP defines a closed reporting model:
–COREP templates reject facts not expected–But XBRL (using standard arc roles) cannot check data that MUST be sent.
49INFORMATION SYSTEMS AND PROCESSES
General project considerations
XBRL as the only format available to file data?
–XBRL scares people–Several choices:
•Allow more than one format–Easiest for financial entities–Two formats must be maintained
National Bank
Financialentity Financial
entity
Financialentity
xml xbrlxbrl
50INFORMATION SYSTEMS AND PROCESSES
General project considerations
XBRL as the only format available to file data?
–XBRL scares people–Several choices:
•Allow more than one format•Only XBRL
–Key: establish a fluent relationship with bank’s software providers
National Bank
Financialentity Financial
entity
Financialentity
xbrl xbrlxbrl
51INFORMATION SYSTEMS AND PROCESSES
General project considerations
XBRL as the only format available to file data?
–XBRL scares people–Several choices:
•Allow more than one format•Only XBRL•XBRL is the only format allowed, but providing a translation tool
–Very similar to German solution–Entities to consider providing XBRL directly–Translation tool must be maintained
National Bank
Financialentity
Financialentity
Financialentity
xbrl xbrlxbrl
txt
52INFORMATION SYSTEMS AND PROCESSES
Design stage: visualization service example
Front-end
Financialentity
XBRL HTML
XBRL HTML
XBRL Services
XBRL engineAPI
Taxonomy
53INFORMATION SYSTEMS AND PROCESSES
COMPILE TIME
RUN TIME
Design stage: visualization service example
Front-end
Financialentity
XBRL HTML
XBRL engineAPI
XSLTXSLTProcessor
Taxonmy
XSLT
54INFORMATION SYSTEMS AND PROCESSES
Financial Entity
Design stage: visualization service example
Front-end
XSLT
XSLT
Javascript
Javascript
XSLTProcessorXBRL XSLT
HTML
55INFORMATION SYSTEMS AND PROCESSES
Reporting process: extending the European taxonomy