XBRL For Banks - Use Cases and Corresponding Demonstration Projects 8 th XBRL International Conference Financial Services & Regulatory Reporting Special interest Day November 5, 2003 Paul Penler, Principal, Ernst & Young XBRL US Steering Committee - Vice Chair

 Purpose and Approach  Investor Reporting (External Financial)  Demonstration Project – 10 Banks Financial Statements  Borrower Reporting (Credit Analysis)  Demonstration Project – 3 Banks, 25 Borrowers  Internal Reporting  Demonstration Project – 1 Bank Agenda

 Investor Reporting – Investors/Lenders  Internal Financial Reporting  Borrower Reporting – Credit Analysis  Regulatory Reporting XBRL and Bank Use Cases

Investor Reporting

Investor Reporting Demonstration Project

 Scope:  Development of External Financial Statements of 10 Banks  Process Followed  Deliverables:  Custom Taxonomy Extension  Instance Document (ID)  Rendering/Viewing of ID  Consumption of ID (Separate and Comparison)  Results  Demonstration

Example of Bank’s Financial Statements in XBRL

Borrower Reporting

Moody’s

Borrower Reporting Demonstration Project  Scope:  Analysis of Borrower Financial Statements in XBRL  Process Followed  Deliverables:  Instance Document (ID)  Rendering/Viewing of ID  Consumption of ID (Separate and Comparison)  Results  Demonstration

XBRL Demonstration Project 3 Accountants 25 Private Company SME’s 3 Banks

Summary of Demonstration Project Three banks was successful in uploading and automatically populating its financial spreading database with XBRL statements. After this upload was complete, the banks were able to start the financial analysis within immediately without having to perform any manual data entry. However, being that this was a focused test effort, there were very little unknowns. As issues surfaced, they were able to rectify them. Nevertheless, the banks did run into some issues during the exercise but were none were considered major.

Borrower Reporting - The Process Accountant generates and provided the Banks XBRL Instance Document. The banks consumed the XBRL instance documents – one did it through a Web Portal (Borrowers would upload the Instance Document in a non-test environment). If a mapping does not occur automatically, an analyst manually mapped it. A database houses the mapping (between the US GAAP V2 Taxonomy and the credit software chart of accounts). An application parsed and maps the XBRL Instance Document to the credit software chart of accounts. Data Base Credit Analysis Application

What we Learned – Summary Observations  It works! Ability exists today.  Forecasted Benefits/Value propositions appear reasonable – however, level of effort/costs need to decrease before they is a significant ‘net benefit’  Identified/confirmed specific issues and obstacles,  Ambiguous terminology within the US GAAP Taxonomy compared to MFA. For example, “Notes Receivable" does not classify whether it should be considered current or non-current.  Blended terminology within the US GAAP Taxonomy. For example, “LoanShortTermLongTerm” combines both the current and non-current value into one XBRL tag. There are two areas of concern with this issue. One, our XBRL application does not know whether this needs to be mapped to current or long term. Two, from an analytical standpoint, we may want to have a portion mapped to current and the rest to non-current. We are unable to do this currently for this specific XBRL tag.

Breakthrough Process Improvements With XBRL? Mechanics More Time for Analysis => Better Analysis => Less Risk Value-added Analysis and Decision-making? <10% Average Time for Updating Financial Information—11 days 90% + time spent on Mechanics Mechanics Analysis Mechanics Analysis Mechanics Analysis Mechanics Analysis Or Process more loans in the same amount of time

Internal Reporting

SAP

Internal Reporting Demonstration Project  Scope:  Conversion of several months data in XBRL  Process Followed  Deliverables:  XBRL Data Development  Interactive Displays of the Data  Intranet Web Site  Results  Demonstration

Questions and More Information Paul Penler, Principal, Ernst & Young XBRL US Steering Committee - Vice Chair, AICPA XBRL Implementation Task Force – Chair