Annual Bookkeeping Report as the primary administrative source for the production of SBS: current experiences MERIKE PÕLDSAAR merike.poldsaar@stat.ee Workshop EFFICIENT WAYS OF STATISTICAL DATA COLLECTION FROM ENTERPRISES 22-23 March 2012 Luxembourg

Annual Bookkeeping Report electronically (1) Annual bookkeeping report — the primary administrative source for annual business statistics. According to the Estonian Commercial Code all Estonian enterprises (excluding sole proprietors) are obliged to submit their annual bookkeeping reports to the Commercial Register 6 month after the end of accounting year. Starting from January 1, 2010 commercial undertakings, non-profit associations and foundations are obligated to provide their annual bookkeeping reports only electronically. Project “Aruandluskorralduse lihtsustamine” (“Simplification of reporting arrangement”). The government working group — cooperation of various institutions (since Oct. 2008): Ministry of Justice, Centre of Registers and Information Systems, Board of Auditors, Ministry of Finance, Statistics Estonia, Bank of Estonia, Tax and Customs Board, Board of Auditors, Estonian Accounting Standard Board, Chamber of Commerce, etc 22-23.03.2012 2

Annual Bookkeeping Report electronically (2) The working group defined activities: To create form for annual bookkeeping report which enables to submit main annual bookkeeping reports and notes electronically; To create the list of variables needed for statistical data production to avoid double data collection; To unify concepts i.e to create integrated taxonomy To create the common environment for data submitting The XBRL (eXtensible Business Reporting Language) was chosen as data transmitting standard. 22-23.03.2012 3

Annual Bookkeeping Report electronically (3) The project organisation come to an agreement on elements of taxonomy definitions of variables come to an agreement on administration of the taxonomy system define the needs to change legal acts to inform the data providers about the changes in data submission description of the task for the technical application — web solution realization of the task 22-23.03.2012 4

GAAP taxonomy Government of Estonia approved the first Estonian GAAP taxonomy forms for profit-oriented entities and non-profit associations and foundations on 17.12.2009. The third taxonomy approved on 08.12.2011 includes also forms for companies compiling consolidating annual report companies compiling liquidation and closing reports companies whose main activity is to provide financial services Since 01.01.2010 the submission of annual reports in XBRL is mandatory Exceptions to the requirement: Companies using IFRS Companies with state ownership, who report to Ministry of Finance Branches of foreign companies registered in Estonia 22-23.03.2012

thereof in annual bookkeeping report Taxonomy elements Elements in taxonomy could be divided Main reports (balance sheet, income statement, cash flow statement, equity statement) — mandatory, Notes — materiality principle (may be ignored if no effect) Taxonomy elements described in regulation Possibility to add elements — free text (not usable for statistical data production) Not enough to produce statistical data! EKOMAR thereof in annual bookkeeping report not included (SBS)  TOTAL   main report notes 641 381 59,4% 72 11,2% 309 48,2% 260 40,6% 22-23.03.2012

Main obstacles (1) Materiality principle: financial statements shall set out all material information which affects the financial position, economic performance and cash flows of the accounting entity. Information in financial statements is considered material if failure to disclose the information could influence the business decisions made by the users of the statements on the basis thereof. Immaterial items may be accounted for and recorded in the financial statements using a simplified method. Other problems: Accounting year could be different from calendar year Consolidated reports 22-23.03.2012

Main obstacles (2) Amended Bookkeeping Law (01.01.2010) Article 141 “Taxonomy of the annual bookkeeping report” (unofficial translation): State or local government institution or other public law functions executing institution cannot require from accounting entity submission of taxonomy data what accounting entity has according to the law submitted to the Commercial Register for publishing with annual report. Exceptions The deadline is before the deadline of annual report The period is different (calendar year ≠ accounting year) Different definitions are used 2 year transition period for Statistics Estonia 22-23.03.2012

Web solution Annual bookkeeping reports to be submitted either by filling in the set forms or by uploading an XBRL instance file Signed digitally (ID-card) Generation of PDF report (can be signed digitally) Starting from May 2010 Statistics Estonia started to receive annual bookkeeping reports data in XBRL format via X-road (an environment that would facilitate making queries to different main state databases in Estonia). To avoid double data collection, it was decided to pre-fill statistical questionnaires with the data from annual bookkeeping reports in eSTAT (Statistics Estonia electronic data collection system). 22-23.03.2012

EUROSTAT grant 2009 MEETS projects on Modernisation of Business Statistics “Use of administrative data for business statistics” The goals of the project to harmonize statistical surveys using information from annual bookkeeping reports to facilitate the data transmission from administrative data sources, to create the correspondence tables to transmit data from administrative data files to statistical data files as the XBRL uses the specific coding system of variables, to create rules, formulas and tables to calculate statistical variables using information from annual bookkeeping reports as bookkeeping variables are not always directly usable. 22-23.03.2012

Harmonization of statistical surveys using information from annual bookkeeping reports It was important to simplify the use of data from annual bookkeeping reports and make easily understandable for data providers which data from annual bookkeeping reports are used in prefilled statistical questionnaires. It was taken into account that unification leads to change of the codes of variables, change of the data checks in questionnaire instructions, changes in data production software (input, transfer, production and output software). At the same time unification facilitates the creation of correspondence tables, simplifies the preparatory work for the data publishing, help in the creation of the universal data production software (technical development is in the phase of creation). 22-23.03.2012

New correspondence tables (1) The new correspondence tables had to be created to transmit data from administrative data files to statistical data files as the XBRL uses the specific coding system of elements. The identification elements (ID-elements) in taxonomy are often very long and textual. ID-element Number of symbols PropertyPlantAndEquipmentHypercubeExcludedElementsOfAcquisitionOfLandAndBuildingsExceptNewBuildingsAndRenovations 113 PropertyPlantAndEquipmentAcquisitionsAndAdditionsAcquisitionOfLandAndBuildingsExceptNewBuildingsAndRenovations 110 BiologicalAssetsFairValueMethodCurrentAssetsDecreaseOfValueFromDueToProductionOfAgriculturalProducts 100 22-23.03.2012

New correspondence tables (2) New codes are limited to 10 symbols, convenient for the SBS data production Main reports — 735 statistical codes Notes — 3272 statistical codes Example: Income statement (extract) ID-element (XBRL) Statistical code   Current period Previous period Revenue Ka_50_1 Ka_50_2 OtherIncome Ka_60_1 Ka_60_2 ChangesInInventoriesOfAgriculturalProduction Ka_70_1 Ka_70_2 ProfitLossFromBiologicalAssets Ka_80_1 Ka_80_2 ChangesInInventoriesOfFinishedGoodsAndWorkInProgress Ka_90_1 Ka_90_2 WorkPerformedByEntityAndCapitalised Ka_100_1 Ka_100_2 RawMaterialsAndConsumablesUsed Ka_110_1 Ka_110_2 OtherOperatingExpense Ka_250_1 Ka_250_2 EmployeeExpense Ka_260_1 Ka_260_2 DepreciationAndImpairmentLossReversal Ka_270_1 Ka_270_2 OtherExpense Ka_280_1 Ka_280_2 TotalProfitLoss Ka_290_1 Ka_290_2 FinancialIncomeAndExpense Ka_330_1 Ka_330_2 TotalProfitLossBeforeTax Ka_340_1 Ka_340_2 IncomeTaxExpense Ka_350_1 Ka_350_2 TotalAnnualPeriodProfitLoss Ka_360_1 Ka_360_2 22-23.03.2012

New formulas and rules to calculate statistical variables Additional correspondence rules and formulas to use information from notes were created Variable code in EKOMAR (SBS) Name of the variable in EKOMAR (SBS) Formula EMTAK (= NACE) c_10 Turnover ABS(Ka_50_1+L34_100_1+L34_110_1)   c_11 sale to non-residents (export) ABS(L32_90_1-L32_10_1_EESTI) c_12 sale to EU Member States ABS(L32_40_1-L32_10_1_EESTI) c_755 Other revenue ABS(Ka_60_1-L34_100_1-L34_110_1) c_760 profit from the sale of tangible assets ABS(L34_10_1+L34_20_1+L34_30_1+L34_40_1) c_765 profit from revaluation ABS(L34_50_1+L34_60_1) c_21 operating subsidies for agriculture activities ABS(L29_440_4+L29_550_3) c_20 operating subsidies ABS(L29_140_4+L29_300_3) c_22 Change in work-in-progress and finished goods inventories CASE WHEN (Ka_90_1+Ka_70_1)<>0 THEN (Ka_90_1+Ka_70_1) END c_35 Profit/loss from biological assets Ka_80_1 c_40 Capitalized self-constructed assets ABS(Ka_100_1) c_100 Merchandise ABS(L35_30_1+L39_30_1) EMTAK<450000 or EMTAK>470000 ABS(L35_30_1+L39_30_1+L35_20_1+L39_20_1) EMTAK>=450000 and EMTAK<490000 22-23.03.2012

eSTAT The data collection channel for economic entities (enterprises, state and local government agencies, non-profit organisations, sole proprietors) for submission of data to Statistics Estonia eSTAT was launched in February 2006 eSTAT is developing into a communication environment functioning between enterprises and Statistics Estonia Authorized entry to eSTAT by ID-card, Mobile-ID; via Internet bank (Swedbank; SEB; Sampo, Nordea) Sending out paper questionnaires was stopped in 2008 22-23.03.2012

Received reports of economic entities by channel, Jan 2008–Dec 2011 22-23.03.2012

eSTAT functionalities (for external users) to view the list of statistical reports, which the particular enterprise has to present to Statistics Estonia during the current year to view deadlines for presenting these statistical reports to order reminders, which notify by e-mail about upcoming deadlines to fill in statistical reports, i.e. to fill in cells at the website to run controls, i.e. to check whether the statistical report is compiled as required to correct statistical reports to submit statistical reports to Statistics Estonia to look at all earlier statistical reports submitted to Statistics Estonia by a respondent concerned to administer users, i.e. to create, change and cancel rights and access etc 22-23.03.2012

Data collection using prefilled questionnaires The eSTAT was improved for the year 2012 i.e. for the reference year 2011 data collection. Statistical questionnaires in eSTAT are prefilled using administrative data. Statistics Estonia downloads annual bookkeeping reports (ADAM) every night — at the moment, several times per day — high season). The administrative data are converted into the statistical format by a new transformation system (VAIS). The information from annual reports is preloaded to eSTAT every morning at 8 o’clock — at the moment, several times per day — high season). Data provider has to fill in only the gaps i.e information not available from annual bookkeeping report. 22-23.03.2012

prefilled (yellow cells) added or changed by data provider eSTAT. SBS survey EKOMAR: Income statement (1) prefilled (yellow cells) added or changed by data provider does not exist (=0) 22-23.03.2012

prefilled (yellow cells) added or changed by data provider eSTAT. SBS survey EKOMAR: Income statement (2) prefilled (yellow cells) autosum added or changed by data provider does not exist (=0) 22-23.03.2012

eSTAT. SBS survey EKOMAR: Income statement (3) Data providers are informed about the data source and the transformation made Example: personnel costs = data from annual bookkeeping report “Income statement” or from note “Personnel costs” or by summing up from three notes (costs and expenses) admin variables used in calculation of statistical variables data source download time 22-23.03.2012

Summary Annual bookkeeping reports’ data (XBRL) transmitted from administrative source to Statistics Estonia immediately. Preparatory work for the use of administrative data is laborious. Statistical questionnaires in eSTAT are prefilled using administrative data. The information from annual reports are preloaded and data provider has to fill in only the gaps — information not available from annual bookkeeping report. The double data collection is avoided and the response burden of enterprises will be diminished. 22-23.03.2012

Thank you! 01.01.2006