Profiling procedure Sarmite Prole Head of Business Register Section Business Statics Department Central Statistical Bureau of Latvia May 19-23, 2014

Content Definition Types Profiling process Profiling screenplay Methodology Sources Experience Summary Recommendations Future plans May 19-23, 2014

Profiling definition Profiling is a method: to analyse the legal, operational and accounting structure of an enterprise group at national and world in order to ⁻establish the statistical units within that group ⁻their links and ⁻the most efficient structures for the collection of statistical data. Source: Business Register Manual 19.9 May 19-23, 2014

Goal of profiling: To establish statistical unit 'enterprise‘ within the enterprise group Role of profilers: To identify the most appropriate structure of the enterprise group and estimate the feasibility of its use for statistics compilation and data collection May 19-23, 2014

Types of profiling Intensive profiling – enterprise fully involved in profiling procedure Light profiling – enterprise partly involved or not involved in profiling procedure Ways: Face to face meeting Other contacts with enterprise Desk profiling May 19-23, 2014

Profiling process steps a May 19-23, 2014 Intensive profiling: - Meeting with enterprise group (face to face meeting) - Adoption of the enterprise group structure - Agreement with controlling enterprise (reviewed every year) - Data collection Light profiling: Decision (Yes/No) - If yes, data collection on legal unit level and data calculation within NSI - Identification of enterprise group - Desk profiling – compilation of information about enterprise group (EGR, SBR, annual reports according IFRS, statistical surveys) - Creation of enterprise group structure GEN and TEN; - Comparison of structure with internal users and access data availability in all business related statistical domains - Top management decision about begining of profiling - Contact with enterprise group - Information from the group head about desire to cooperate

Profiling screenplay a May 19-23, 2014

Methodology Business Register Recommendation Manual ESSnet on Profiling of large and complex MEG. Guidelines International Financial Reporting Standarts (IFRS) May 19-23, 2014

Profiling sources in LV Euro Groups Register Financial annual report Statistical Business register FATS surveys SBS survey Other financial and statistical surveys May 19-23, 2014

Experience of CSB of Latvia Participation in ESSnet on profiling tender «Profiling of large and complex multinational enterprises groups in Latvia» (June, 2012 – December, 2013) Main objective has been : To test and implement profiling of large and complex multinational enterprises groups in Latvia May 19-23, 2014

Activities Within the tender: Profiled 3 multinational enterprises: –Intensive profiling - 1 –Light profiling – 2 Partnering exercises – 27 Realized cases in SBR - 0 Profiled enterprises in SBR: –National - 2 –TEN – 1 Used method: top-down profiling May 19-23, 2014

Summary Main success: Better understanding profiling methodology and using of data sources (EGR, OFATS, Consolidated annual report, IFRS) Communication with data users inside office Participation in Partnering exercise First visit to the GEG Carry out first activities for implementation of profiling method Main difficulties: Problems to find a group with IFRS GEG refused to provide consolidated STS data Discussions with internal users whether particular way of GEG data reporting is satisfying everybody Inconsistencies in the methodology of different statistical domains May 19-23, 2014

Recommendations Define priorities for identifying TEN or all resident group for profiling Exclude from the scope LeUs which are autonomous units Clarify the core economic variables that can be provided at the TEN level (SBS, STS, FATS) Ask the group about the availability of the intra-group flows data and from each observational unit Evaluate if the minimum set of data collected is useful to estimate all the other variables (SBS and others) Compare the data with different information source May 19-23, 2014

Future plans Activity 1 To implement the revised definition of statistical units for business statistics and continue testing profiling: Task : To evaluate the impact of switching from legal units to (truncated) enterprises Activity 2 To improve Statistical Business Register Tasks: Identify foreign legal units (foreign legal parents and/or foreign subsidiaries) and set up methodology for identifying and maintenance foreign legal units; To test the implication of profiling at national level May 19-23, 2014

Thank You for Your attention! Thank You for Your attention! References: May 19-23, 2014