XBRL for regulatory reporting Belgian projects

Agenda  XBRL projects by Belgian regulators  National Bank of Belgium  Banking, finance and insurance commission  Federal Public Service Finance  Agenda  The current situation  Why XBRL  Project steps

XBRL for regulatory reporting The National Bank of Belgium Camille DÜMM Central Balance Sheet Office

The CBSO at a glance  Legal changes in 1975 and 1976  Most Belgian companies must legally publish their annual accounts  Standardization of annual accounts Set up of the CBSO on 17 April 1978 :  to ensure speedy and efficient circulation of information available in annual accounts  to arrange the statistical processing of the information gathered

The CBSO at a glance 1993 Introducing filing of annual accounts on floppy disk (text file) 2000Spreading on microfilm abandoned in favor of images-CD (PDF file) 2002Supplying copies of filed annual accounts through the Internet 2004Filing annual accounts through the Internet

The CBSO at a glance - data  In 2003 :  companies  annual accounts  pages

Current processing of annual accounts Electronic Paper Images database Quality Check Scanning Validation Data entry Accounting data Data loading Images CD PDF file Text file Output Paper Image CD Internet Figures Studies Statistics

The XBRL Project - Justification  Why to change for XBRL ?  Current processing system rigidity  Future implementation of IAS/IFRS  Purposes of the XBRL project  Introduce flexibility in our process  Make the maintenance easier  Harmonization of the data format and exchange with other regulators  Prepare the electronic filing of annual accounts drawn up according to IAS/IFRS

The XBRL project - Process

The XBRL Project - Steps  2005  Development of a taxonomy based on the Belgian GAAP  Publication of the taxonomy on the website and contact with software companies  2006  Internal filing process adaptation  Development of a application allowing the companies to fill in their annual accounts on Internet in XBRL  2007  Filing normalized annual accounts in XBRL

Financial reporting for supervisory purposes : the CBFA project. Giancarlo PELLIZZARI Banking, finance and insurance commission Prudential policy

Agenda  Current situation  New European accounting context and its implications  Financial reporting : the Belgian and European packages  XBRL within the CBFA  Planning use of XBRL

Current situation  Scheme B : market financial reporting (B/S – P&L – limited notes)  Scheme A : prudential reporting consisting of :  prudential reporting (Capital regulation – banking risks)  statistical data (e.g. European Central Bank, National Bank of Belgium, etc.)  financial reporting (analysis of financial market information and banking risks)

Current situation  Scheme A covers :  statutory basis (59 banks)  territorial basis (58 banks)  consolidated basis (24 banks)  More than data to be delivered on :  monthly basis  quarterly basis  bi-annual basis  annual basis

Current situation  Information is processed to obtain the Bank Performance Report, allowing individual and group analysis :  rotations  comparisons between banks  Peer Group analysis  outlyer analysis  vertical and horizontal analysis  Bank Performance Report is an XML based tool

New European context and its implications  Starting January 2005, all European listed companies must use IAS/IFRSs for consolidated financial statements.  All Belgian banks and investment firms that must present consolidated accounts will report to the supervisor according to a standardised IAS/IFRSs scheme A (Royal decree not yet approved).  Difference between BE GAAP and IAS/IFRS :  BE GAAP  fixed layout  IAS/IFRSs  free layout

New European context and its implications  Standardized reporting scheme A for IAS/IFRS consolidated financial statements will enhance :  comparability  level playing field.

Financial reporting : The Belgian and European packages  Limited to IAS/IFRS financial reporting.  Consolidated basis.  Based on Word and Excel tables, with extensive references to IAS/IFRSs having an XBRL taxonomy in mind.  Belgian scheme : published for consultation until end of October  European scheme : project within Committee of European Banking Supervisors (CEBS).

XBRL Within the CBFA  The sector asked to consider using XBRL as reporting standard.  After evaluation of different possibilities, XBRL was considered as the best solution in a IAS/IFRS environment because :  XBRL handles non standardized financial reporting formats  taxonomies will become available  easily extendable to meet specific Belgian supervisory needs.  From an IT perspective, the migration to XBRL is logical as the current reporting standard is XML.

Planning use of XBRL  XBRL :  Analytical XBRL work based on final version of reporting package, incorporating the final IFRS taxonomy in  First implementation of XBRL : to be determined in function of availability of IAS/IFRS taxonomies.  First use of new reporting scheme in 2006 : XML for at least one year.

XBRL for Tax reporting FPS Finance Dirk Quina Federal Public Service Finance

Background Input Processing Output  Typical Process: Paper based Flows  Key in data  Processing of data by mainframes  Results: internal and external use

Background  Gathering “Electronic” data:  Specific channel for specific purposes  Electronic devices (Tapes, disks, …)  Problems reading and processing information  Electronic data exchange  Project started mid 90’s  Focus on security  Real transactions

Existing projects  Edivat:  VAT declarations  Professional users (accountants, fiscal experts,…)  Multiple declarations  Traditional EDI  EDIFACT  Value Added Network  Registration procedure

Existing projects  Intervat:  VAT declaration:  Via Internet  XML  Intelligent form  Digital Signature  Acknowledgement  Finprof:  Withholding taxes  Single declaration – multiple declarations  Results of back-end processing via mail

Recent evolutions  On-line transactions:  Different domains:  Customs  Land Property  Communication with Banks  Exchanging information with other governmental organizations  Traditional EDI:  Use of secure channel  XML- files

Strategic Options  Increasing importance of electronic data exchange  Use of common standard:  Internal applications  End user Applications  Within government  One platform for exchanging information  Internal  External

Strategic Options  Focus on XML  XBRL  International context:  OASIS  OECD  Tax administrations  Professional users  Not a strategic goal as such, BUT: part of global strategy

Planned actions  “Existing” applications:  Study Client listing (VAT)  Conversion VAT declaration  Conversion Intracom listing  Study:  Analyzing existing processes  Existing taxonomies  Selecting 3 major domains  Roadmap  Timeframe: 2005

Contacts  National Bank of Belgium Camille Dümm - Central Balance Sheet Office  Banking, finance and insurance commission Giancarlo Pellizzari - Prudential policy Federal Public Service Finances Dirk Quina