XBRL For Banks - Use Cases and Corresponding

Demonstration Projects

8th XBRL International Conference

Financial Services & Regulatory Reporting Special interest Day

November 5, 2003

Paul Penler, Principal, Ernst & YoungXBRL 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

AgendaAgenda

Investor Reporting – Investors/Lenders Internal Financial Reporting Borrower Reporting – Credit Analysis Regulatory Reporting

XBRL and Bank Use CasesXBRL and Bank Use Cases

Investor Reporting

Investor Reporting Demonstration Project

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 ProcessAccountant 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 andMore Information

Paul Penler, Principal, Ernst & YoungXBRL US Steering Committee - Vice

Chair, AICPA XBRL Implementation Task Force – Chair

paul.penler@ey.com

www.XBRLforBanks.com