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  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

Some Background Information  XBRL Taxonomies mainly to be considered  IFRS Listed 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-GAAP Some companies apply US-GAAP – global players, but a very low number

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

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 – Software & IT services, ERP system including data pool for financials of 2.4 mn businesseswww.datev.de  S&N AG, Paderborn – Standardised and tailor made solutions for banks, etc.

Three typical examples  Deutsche Bundesbank's Project  Deutsche Börse's Project  Deutsche Bank's Project

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

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

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

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)

h e g EUR 3,1/ ISO4217:EUR … h e g EUR 3,1/ ISO4217:EUR … Non-XBRL headerXBRL spec 2.0 Deutsche Bundesbank's Project Source: Deutsche Bundesbank

Deutsche Bundesbank's Project Benchmark information delivered by Bundesbank SectorSizeLegal formYearQuartile 1Quartile 2Quartile 3 Car supplier Sales > €25mn and < €50mn Corporation200311,00%20,0%36,0% Own analysis of a consumer of benchmark information CompanyEquity ratio Car supplier 123,0% Car supplier 217,0% Car supplier 341,0% Equity funding below average Excellent equity funding Equity ratioGroup Equity funding above average Assessment  Example result Source: Deutsche Bundesbank

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

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

 Deutsche Bundesbank's Project  Deutsche Börse's Project  Deutsche Bank's Project Three typical examples

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

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

Deutsche Börse's Project

Deutsche Börse's Project

Deutsche Börse's Project Various export formatsPeer group analysisMultiple reports

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

 Deutsche Bundesbank's Project  Deutsche Börse's Project  Deutsche Bank's Project Three typical examples

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

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

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

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 Data Capturing & Transformation Engine Target Database Target Database XBRL Instance Documents XBRL Instance Documents Paper based report Also: DOC, RTF, XLS, HTML, TXT, PDF, …

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

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

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

Questions? International German For further information on XBRL please refer to the web sites