More than 400 banks are filing monthly financial statements in XBRL to the Bank of Spain, which is responsible for overseeing the country's banking system. The introduction of XBRL for this reporting has enabled automatic data validation, achieved better quality of data and reducing manual effort. The Bank of Spain is now pushing ahead plans for expanded use of XBRL.

The background

The Bank of Spain supervises the performance of the nation's banks and other financial organisations, gathering a wide range of data for its own purposes and for reporting within the European Union. In the past, it collected all this information through electronic data files based on proprietary formats. No standard automated validation systems were available to check data prior to entry. Data validation was thus manually intensive, expensive and prone to inaccuracy.

Recognising the potential of XBRL, the Bank of Spain became involved in the international XBRL consortium and in 2003 pushed forward a pilot project to examine the use of XBRL in practice.

This covered regulatory reporting by Appraisal Companies, which carry out the appraisal and valuation of property and other goods. This was a suitable basis for a pilot since reporting involved a fixed set of data and was relatively straightforward and only about 40 companies were involved.

Following successful completion of this pilot, the Bank of Spain carried out an analysis in 2004 supported by PricewaterhouseCoopers of its flows of information to identify where the introduction of XBRL would bring most benefit. This led to a plan for specific projects to adopt XBRL.

The Bank was also a founder member of the Spanish XBRL jurisdiction, set up in 2004, which promotes the use of XBRL in Spain and represents the country's interests in the international XBRL community.

The implementation process

The analysis in 2004 of the Bank of Spain's use of financial data identified monthly reporting by credit institutions as a suitable area for the introduction of XBRL. The reports consist of banks' public financial statements, but not the detailed notes or other explanatory disclosures contained in full accounts. The data requirements were already fixed by the Banks reporting regulations. All banks share the same form of chart of accounts.

The large volume of data involved meant that the use of XBRL promised significant benefits but risk was limited by the tight definitions of content.

The Bank also identified the need for a new technical infrastructure to handle all future XBRL reporting. It has a single IT department covering all business systems at the Bank, so creating a common infrastructure to support all XBRL filing was a logical step.

It thus planned and developed its Financial Information Interchange System (SIIF) during 2004-5. This supports a range of encrypted communication mechanisms between submitters and the Bank of Spain. It also provides a range of services to aid institutions in filing valid information to the Bank, including validation and visualisation services. The use of these is described in the next section.

The Bank of Spain developed a taxonomy to cover credit institutions monthly data by creating an extension to the IFRS General Purpose taxonomy issued by the IASCF. This represented the first major international live use of an international accounting standards taxonomy. The Bank added some 500 Spanish-specific elements in its extension and actively uses just over 200 elements from the base IFRS-GP taxonomy, which is a large taxonomy covering a broad range of data.

To enable submitters to validate their data prior to submission, the Bank developed a range of formulae to accompany the taxonomy and check aspects of the data, including arithmetical accuracy and the presence of particular data items if certain rules apply. The Bank also developed and provided software to enable credit institutions to convert their data easily from plain text to XBRL format. This software, tailored to Spanish filing requirements, was intended to smooth the process of XBRL adoption, but the Bank does not intend to maintain it indefinitely. It expects submitters in due course to adopt software offered by the market for extracting and creating data in XBRL.

The Bank will only accept the fixed set of regulatory data required by law, so its software is not required to support company extensions to the data being submitted. The Bank of Spain funded all technical development and infrastructure, using Fujitsu to meet its XBRL software requirements.

From June 2005, the seven largest banks in Spain began using the SIIF system to file monthly data in XBRL and this number has since rapidly grown to more than 400, covering 90 pct of the financial sector. As of May 2006, only some small banks remained to be added to the system.

XBRL filing process

Using the tool and guidance documents provided by the Bank of Spain, credit institutions can convert their text-based data to XBRL through a smooth and easy process. They can then use the SIIF system to submit their data for validation and also view it in a browser through the visualisation services provided by the Bank. They may also contact reporting and error-consulting services at the Bank for help over issues with their submission. Once the submitting organisation has confirmed the validity of its report and it is happy with the data, it provides a formal submission via the SIIF. The Bank responds with automated messages confirming acceptance of the report or advising of errors.

The Bank uses the data solely for internal analysis and evaluation of the performance of the financial system; it does not publish the reports submitted by banks. However, bank associations will publish the XBRL data with help from the Bank of Spain.

Success factors

In addition to careful analysis and planning of its adoption of XBRL, the Bank of Spain found several factors were important to success. They included:

The establishment of a robust and flexible technical infrastructure for exchanging data between the central bank and reporting institutions. By enabling efficient communication and easy updating of taxonomies, the SIIF system provides a vital foundation for the use of XBRL.

Efficient and easy-to- use validation, visualisation and other support services, which give reporting banks confidence in the use of XBRL.

The provision of a dedicated software tool to make it easy for banks to convert their data into XBRL.

The availability of the IFRS-GP taxonomy. The Bank of Spain collaborated in the development of this taxonomy: two workshops took place in Madrid where the first version was finished.

The quick evolution of the XBRL standard, pointing the way to solutions for problems faced by the Bank of Spain, including approaches for handling dimensions, versioning and formulas.

Next steps

The Bank of Spain already has projects under way to extend XBRL reporting and is also planning technical improvements.Main areas of development include:

Reporting of bank risk and solvency information

The Bank of Spain is helping to drive forward the COREP XBRL project under the auspices of the Committee of European Banking Supervisors (CEBS), which is intended to provide a common basis for reporting of risk and solvency information in the European Union using XBRL. A first version of the COREP taxonomy has already been published.

Reporting of bank financial statements under new European Union Guidelines

The Bank of Spain is taking a leading role in the development of the FINREP taxonomy, which covers the prudential financial information which credit institutions in the European Union must periodically report under new guidelines issued by CEBS. An early draft of the FINREP taxonomy has been issued.

Reporting of data to European Balance Sheet Data Offices

Work is under way on an XBRL project for the reporting of data on non-financial corporations required by questionnaires from the European Committee of Central Balance Sheet Data Offices (ECCBSO).

Spanish corporate statistics

The Bank of Spain is working to convert a voluntary system for the collection of statistics from Spanish companies to XBRL. Collected on CD, the data is currently received in text format.

Storage of XBRL data

In a further step to upgrade its infrastructure to handle XBRL, the Bank is planning to move its storage of data to a system which will support improved analysis. This is expected to use XBRL to provide a standardised metadata layer. It is intended to simplify maintenance, allow more flexible updating and provide more powerful analysis of data available in XBRL.