Denmark's XBRL mandate for financial reporting and work with the coming COREP/FINREP filings. Poul Kjær, Chairman XBRL Denmark

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1 Denmark's XBRL mandate for financial reporting and work with the coming COREP/FINREP filings Poul Kjær, Chairman XBRL Denmark

2 IFRS, XBRL and ixbrl in Denmark Danish Commerce and Companies Agency (EOGS) From mid-2012 it becomes mandatory for all small companies to file annual reports digitally to DCCA according to the Danish GAAP Inline XBRL is already used and there is a public demand for more From 2013 it will be mandatory to file digitally for all non- IFRS companies in Denmark From the start, companies must submit the entire Annual Report In a transitional phase DCCA accepts Blok-tagging Other transitional arrangements will also be used DCCA is also working on a Danish extension of the IFRS taxonomy 2

3 The legal framework for reporting to DCCA The Digital reporting is covered in the act: Act 139, which changes the act on accounting standards for Danish companies annual accounts The XBRL issue is covered in an executive order: Executive order from DCCA about reporting and disclosure of Annual reports and the related communication 3

4 The new reporting framework COREP and FINREP The European Banking Authority (EBA) to deliver Implementing Technical Standards (ITS) by in the following areas (CRR) Art 95 Own funds reporting CP published in Dec 2011 Art 96 Mortgage exposures reporting CP published in Dec 2011 Art 383 Large exposures reporting CP published in Feb 2012 Art 403 Liquidity CP to be published in June Art 417 Leverage CP to be published in June Integrated approach to ITS development Several ITS packaged as one EU Regulation Use of common structure/conventions/concepts/definitions Objectives: Increase efficiency in reporting systems (cost reduction for banks) Enhance analytical ability for NSA and EBA (common set of data, quality) 4

5 Adoption by EU Commission via implementing acts in the form of regulation or decision Direct application no further implementing regulation on national level Proportionate to nature, scale and complexity of institutions activities Details: Data templates, definitions, Data Point Model (DPM), XBRL taxonomies ITS features to ensure uniform implementation: Legal references point to relevant parts of EU law (CRR, Accounting Directive, IFRS) Data definitions included in the instructions to further clarify legal references Validation rules (quantitative relations between data points) DPM containing all the relevant technical specifications necessary for developing an IT reporting format XBRL taxonomies to ensure unambiguous IT interpretation of the data included in the ITS (XBRL not mandatory depending on national authority) 5

6 Main features in the new COREP framework (1) Reporting population Credit institutions and investment firms Consolidated level and individual level Frequency Quarterly Exception: semi-annually Small, domestic institutions (NSA decision) Entities within scope of consolidation (GS) Exception: annually Material operational risk losses (OPR Details) 6

7 Main features in the new COREP framework (2) Proportionality Different levels of proportionality due to the use of different approaches Use of materiality thresholds Market risk (interest rate risk, equity risk, FX risk) Group contributions in GS template Country-specific information in IRB Reduced loss reporting when using TSA/ASA in OPR Details Reduced reporting requirements for particular investment firms 7

8 Main features in the new FINREP framework Reporting population Credit institutions reporting on consolidated basis (IFRS and non-ifrs banks) Frequency Quarterly Exception: the following templates to be reported semi-annually Breakdown of loans and advances to non-financial corporations by NACE codes and by residence of the counterparty Breakdown of debt securities from general governments by residual maturity and by residence of the counterparty 8

9 COREP and FINREP: New features Geographical breakdown CR IRB Country specific risk parameters (PDs, LGDs), exposures, RWAs FINREP Exposures broken down by country, counterparty and instrument Information for calculation of default and loss rates Loans and advances by country and counterparty (NACE codes) Sovereign exposures by accounting portfolio, maturity and country Important supervisory information on credit risk exposures and concentrations Stress testing lessons learnt - need for harmonised definitions 9

10 Important milestones COREP: 1. January 2013 FINREP: 1. January 2013 Solvency II: 1. January 2014 The implementation of FINREP and the scope is not yet finally decided and clarified 10

11 Focus on the work in Denmark The Danish Bankers Association has in cooperation with the Danish FSA, Finanstilsynet set up three working groups COREP FINREP XBRL Finanstilsynet, will during the project inform when decisions have been taken see Finanstilsynet and the Danish Central Bank, Nationalbanken, have made a joint initiative to develop a common it platform for reporting which also covers XBRL. From 2013/2014 the undertakings will report to Nationalbanken and Finanstilsynet into the new common platform, which first only will cover the new European reporting The new platform is based on Nationalbanken s existing platform, which will be further developed to cover the new functionality and receiving reporting in the XBRL format 11

12 Further information about the Danish mandatory filling and the COREP/FINREP project COREP/FINREP website XBRL s own wikipedia Open source 12