How to use directors data in REACH

In some cases it is interesting to find out in which Dutch companies directors and board members are currently active. This way you can find out in what kind of network they are active: through which Dutch companies they are linked with other people. The first thing you will probably do is make a selection of companies for which you need to do some research. In REACH you need to make sure to have the following variable in your output: DMC UCI (Uniek Contact Identificator). This variable uniquely identifies an individual director / manager in the database.

To add the field to your output you can click the button Kolommen (= columns) in your screen when you have a list of selected companies:

In the next the variable can be selected at the section Directeuren / Managers. In this screen the variable is called UCI (Uniek Contact Identifier):

When you are finished editing the list you can save/export the selected companies (with directors information) using the Exporteer button in the middle of the screen.

Using the UCI codes goes as follows:

Step 1 is finding the codes

  • When you have the output in Excel you can select the column with the DMC UCI codes and copy them to a new worksheet
  • In the Excel tab Data (= Gegevens) you may use the option to remove duplicate DMC UCI codes. The limit for uploading DMC UCI codes in REACH is 1000, so it pays off to remove duplicate codes!
  • Save the sheet as a text-tab delimited file

Step 2 is using the codes

  • Start up REACH and first select the option Contacten (= Contacts) at the top left corner of the screen (Next to Bedrijven):
  • In the new screen you can search for directors. Here you click on “Zoekstrategieën en IDs” (=Search strategies and ID numbers)
  • Now use the option “Laden van schijf” (= Load from disk) to browse and select the text file (from step 1) with DMC UCI codes:
  • In the next screen click the orange button OK to continue
  • The result screen appears which will show how many DMC UCI codes it could find in the database. It may also show codes it could not find or match. Click the orange OK button to continue
  • The list of people that now appears shows some standard options. The list can be changed and variables can be added through the button Kolommen.

N.B.: In the Contacts part of REACH you can add variables/fields on the directors to the list presentation. It is, however, not possible to add company financial data. You can get the company data by adding the BVD Company ID Nummer (= Unique Company identification number in REACH) to the list presentation and exporting the result to Excel. Company data can be found on the companies by uploading the BVD ID Numbers in the Company (= Bedrijven) screen of the REACH database:

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Companies (Banks) and Fair Value

I recently got a question on the availability of Fair Value data for Banks. Fair value is defined as: a rational and unbiased estimate of the potential market price of a good, service, or asset. It takes into account objective and subjective factors to arrive at the fair value of an asset or liability. In accounting, fair value is used as a certainty of the market value of an asset (or liability) for which a market price cannot be determined (usually because there is no established market for the asset). Under US GAAP (FAS 157), fair value is the amount at which the asset could be bought or sold in a current transaction between willing parties, or transferred to an equivalent party, other than in a liquidation sale.
More information on the concept of Fair Value, as opposed to the historical value, is available here. Three levels can be distinguished:

  • Level One: The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market.
  • Level Two: This is valuation based on market observables. The second arises when the owned assets and owed liabilities are similar to, but not the same as, those traded in a market.
  • Level Three: This is a valuation based on “unobservable.” If inputs from levels 1 and 2 are not available, this category allows for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants.

The following databases carry fair value data: Compustat, Datastream and Bankscope.

The Compustat North America Fundamentals Annual & Fundamentals Quarterly databases have some Fair value variables. Compustat Global databases do not have any of these. The Compustat database Bank Fundamentals Annual and Bank Fundamentals Quarterly databases also have the following items:

  • Fair Value of Options Granted
  • Total Fair Value Assets
  • Total Fair Value Changes including Earnings
  • Total Fair Value Liabilities.

Datastream covers some limited information but not much is available for most companies. A separate license is required for some of the data items which are not included in a default subscription to WorldScope (annual report data source). The more commonly availabe variable here is: Fair Value of Options Awarded. A list of currently available datatypes / variables is available here:

The database Bankscope covers banks worldwide and includes many more data variables that are related to Fair Value. This includes  Fair Value variables for Total Assets, Total Libailities and changes. In addition, there are also separate level 1,2 & 3 variables for both total assets and total liabilities. See screenshot for an example:

N.B.: In Bankscope you first make a selection of banks. When you have called up a list of these banks you can change the list presentation to include any available variables by clicking the button Columns (in the middle of the screen) or the button Add (to the right side of the list).

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