SBR IN FINLAND

SEMINAR ON STANDARD BUSINESS REPORTING (SBR)NOVEMBER 24, 2015OTTAWA, CANADA

Elina KoskentaloProject Manager and Taxonomy Developer, XBRL FinlandAdviser, Finnish Information Society Development Centre (TIEKE)

Start of the Finnish SBR

• Population: 5.5 million• Area: 338,424 km2• Offical languages: Finnish, Swedish• Rebuplic, current president Sauli Niinistö• Independence from the Russian SFSR on

December 6th, 1917• GDP: $41,068• Registered companies: 300,000

About Finland

The Journey

Start of the Finnish SBR

• Real-Time Economy, a public-private development program started in 2007 – focus on improving purchase to pay and order to cash cycles– e-invoicing and related value-added services at the core

• Aim to reduce administrative burden on SMEs– government reporting identified as a pain point (payroll,

financial statement, VAT reporting)• A Standard Business Reporting program initiated in 2009

– working together with business register, tax office and statistics

– data elements (accounts) required by the three government units SBR code set

Start of the Finnish Standard Business Reporting program

The Journey

Standard Business Reporting Code Set

• Listing all the reporting requirements set to the companies– Joint effort of all report receiving entities involved

• Can be used as a chart of accounts• Mapping to tax forms and other reports• Interaction between business people and IT people made

possible• In excel spreadsheet, inadequate for automated processing and

transfer of reports>>The need for eXtensible Business Reporting Language

Standard Business Reporting Code Set

The Journey

XBRL Finland - Operations

• Private-public collaboration with 20 members• Private 12 • Public 8 • Working groups:1. FAS taxonomy development2. IFRS taxonomy development3. Service providers4. Mandatory filing WG5. COREP/FINREP6. Communication, education, research7. Report receivers8. Transactional reporting

XBRL Finland – operations

XBRL Finland - Members

Public PrivateAcademics / Associations

XBRL Finland - members

Company chart of accounts

Standard Business Reporting Code Set

Aineet, tarvikkeet ja tavaratOstot tilikauden aikana

Aine-, tarvike- ja tavaraostot4000 Ostot4001 Aineiden ja tarvikkeiden hankinta (pl. Energia, pakkaus)4002 Kauppatavaroiden hankinta4003 Pakkausaineiden hankinta4004 Sähkön hankinta omaan käyttöön4005 Lämmön hankinta omaan käyttöön

Tavaraostot4100 Tavaraostot Ahvenanmaalta4200 Yhteisöhankinnat 4201 Palveluiden osto yhteisöstä

Financial statements

Tax returns

Statistics reporting

Government gateway

Ecosystem of Finnish SBR/XBRL

The Journey

The Finnish SBR Taxonomy

• Applicability for different reporting scenarios in tandem and separately• Financial statements -, statistics - and tax reporting

• Making use of the Standard business reporting code set (raportointikoodisto.fi)

• Applicability for different types of businesses• Legal reporting requirements differ to some extent for

different types of businesses

• Complying with XBRL international recommendations and best practices

• Usability• Aiming to minimize the effects of versioning

The Finnish SBR taxonomy

• Automated generation of• Tax reports• Later on: Cash flow statement, Key business figures

• Enrich instance documents with aggregate level data”extended financial statement”

”general financial statement”

Formulaprocessor

Tax reports

• Standardized visualization of reports with Inline XBRL• XSLT-templates shall be provided in order to transform the

XBRL-instance documents into iXBRL format

Making use of the Formula linkbase and Inline XBRL

The Journey

Moving towards XBRL based financial reporting

• Press release announced in January 2014 by Finnish Tax administration and business registry:• “XBRL based financial reporting will be made possible from

the beginning of 2016”

• At the first stage for limited and co-operative companies

• National government gateway for all XBRL filings

• Also for other legal forms in the following years (phased until 2020)

Moving towards XBRL-based financial reporting

The Journey

Entries in XBRL GL format

Encoding of entries

Regulatory filings

Auditing

General Ledger(SBR code set)

• Finnish extension of XBRL GL-taxonomy

• Enables the automation of accounting processes

• Interoperability between systems• Streamlines XBRL-based reporting

(internal and external)• Audit trail from financial

statements to accounting entries• Enables automated auditing• Ongoing public discussion:

”National accounting data archive”

What happens next – standardizing accounting entries

Lessons learned

• Maintainability• …requires continuous deeper level collaboration across

ministries and various organizations

• Adoption• …requires better support from software providers and open

mindness from the filers

• Support for filers• …learning curve exists on both sides of the submission

platform

• Future mandate• …100% adoption rate requires changes in the laws

Current challenges

Lessons learned

• Data contents before technology• …is not to implement XBRL just for the sake of XBRL

• Keeping in mind the main goal• …lowering the administrative burden for companies

• SBR is not just about standardizing the reported data• …requires and integrated report submission architecture

• Public-private cooperation• …the support of both is required

Lessons learned

Questions?

• Elina Koskentalo• Project Manager and Taxonomy Developer, XBRL Finland • Adviser, Tieke• elina.koskentalo@tieke.fi

• www.xbrl.fi• www.raportointikoodisto.fi • www.rte.fi

Questions?