Annual Bookkeeping Report as the primary administrative source for the production of SBS — current experiences and future plans Neuchâtel September 2011 Tiina Pärson Statistics Estonia Annual Statistics of Entrepreneurship Service Enterprise Statistics Department

Statistics Estonia, Tiina Pärson Background According to the Estonian Commercial Code all Estonian enterprises are obliged to submit their annual bookkeeping reports to the Commercial Register 6 month after the end of the economic year. Electronic data submitting was possible, but in *.txt (Text), *.pdf (Portable Document Format) or *.rtf (Rich Text Format). Information on income statement, balance sheet and cash flow statement was entered electronically by Centre of Registers and Information Systems. Inappropriate timing - electronic format for production SBS was available15 months after the reference year.

Statistics Estonia, Tiina Pärson Annual Bookkeeping Reports electronically: preparatory stage (1) Since 1 of January, 2010 commercial undertakings, non- profit associations and foundations are obliged to provide their annual bookkeeping reports only electronically. The goverment working group was organised. Representatives from Ministry of Justice, Ministry of Finance, Centre of Registers and Information Systems, Board of Auditors, Chamber of Commerce, Statistics Estonia, Tax and Customs Board.

Statistics Estonia, Tiina Pärson Annual Bookkeeping Reports electronically: preparatory stage (2) Main tasks of the preparatory working group: To create form for annual bookkeeping reports which enables to submit main annual bookkeeping reports and appendices 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.

Statistics Estonia, Tiina Pärson Annual Bookkeeping Reports electronically: preparatory stage (3) Government working group Taxonomy group Workshop group Technical group

Statistics Estonia, Tiina Pärson Annual Bookkeeping Report electronically: preparatory stage (4) Main tasks for the group of taxonomy arrange elements of taxonomy definitions of variables arrange administration of the taxonomy system define the needs to change legal acts to inform the data providers about the changes in data submission Main tasks for the technical working group description of the task for the technical application afterward realization of the task

Statistics Estonia, Tiina Pärson Cooperation of various institutions Ministry of Justice Ministry of Finance Ministry of Economic Affairs and Communications Statistical Office Tax and Customs Board Estonian Accounting Standard Board Estonian Board of Auditors Bank of Estonia Chamber of Commerce Taxonomy working group

Statistics Estonia, Tiina Pärson Taxonomy Government of Estonia approved the first Estonian GAAP taxonomy forms for profit-oriented entities and non-profit associations and foundations on Since the submission of annual reports in XBRL is mandatory Exceptions: Companies using IFRS Companies compiling consolidating annual report Companies compiling liquidation and closing reports Companies whose main activity is to provide financial services Companies with state ownership, who report to Ministry of Finance Branches of foreign companies registered in Estonia

Statistics Estonia, Tiina Pärson Taxonomy elements Taxonomy elements can be divided in two: Main reports (balance sheet, income statement, cash flow statement, equity statement) — mandatory, Notes — materiality principle (may be ignored if no effect) EKOMAR parameters thereof in annual bookkeeping reports not included TOTAL main reportnotes ,4%7211,2%30948,2%26040,6%

Statistics Estonia, Tiina Pärson Main obstacles Materiality principle The materiality principle states that the requirements of any accounting principle may be ignored when there is no effect on the users of financial information. The main disadvantage of this requirement is that the principle does not allow receiving all variables needed for statistical data production from the annual bookkeeping Reports. Accounting year could be different from calendar year Possibility to add elements – free text (not yet usable for statistical data production) Consolidated reports

Statistics Estonia, Tiina Pärson Amended Bookkeeping law Amended Bookkeeping Law 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 which accounting entity has according to the law submitted to the Commercial Register for publishing with annual report 2 year transition period was foreseen 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)

Statistics Estonia, Tiina Pärson Harmonization of statistical surveys using information from annual bookkeeping reports (1) To avoid double data collection, it was decided to prefill EKOMAR questionnaires with the data from annual bookkeeping reports Therefore 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. The biggest changes were made in module “Income statement”(profit and loss account). The statistical questionnaire is drawn up similar as the profit and loss account, as well as the variables are in the same order and therefore easily understandable.

Statistics Estonia, Tiina Pärson Harmonization of statistical surveys using information from annual bookkeeping reports (2) It was taken into account that unification leads to change the codes of variables, change 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 — the same correspondence table for several surveys could be used, simplifies the preparatory work for the data publishing — no need to use additional correspondence tables to add up the same variable from different surveys, which were coded differently, will help in the creation of the universal data production software (technical development is in the phase of creation)

Statistics Estonia, Tiina Pärson New correspondence tables (1) The new correspondence rules and 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 PropertyPlantAndEquipmentHypercubeExcludedElementsOfAcq uisitionOfLandAndBuildingsExceptNewBuildingsAndRenovations 113 PropertyPlantAndEquipmentAcquisitionsAndAdditionsAcquisition OfLandAndBuildingsExceptNewBuildingsAndRenovations 110 PropertyPlantAndEquipmentAcquisitionsAndAdditionsAcquisition OfLandAndBuildingsExceptNewBuildingsAndRenovations 110 BiologicalAssetsFairValueMethodCurrentAssetsDecreaseOfValu eFromDueToProductionOfAgriculturalProducts 100 BiologicalAssetsFairValueMethodCurrentAssetsDecreaseOfValu eFromDueToProductionOfAgriculturalProducts 100

Statistics Estonia, Tiina Pärson New correspondence tables (2) New codes are limited with 10 symbols, convenient for the SBS data production (income statement (extract) RowID column in XBRLStatistical code MüügituluRevenue Ka_50_1 Muud ärituludOther Income Ka_60_1 Põllumajandusliku toodangu varude jääkide muutusChangesInInventoriesOfAgriculturalProduction Ka_70_1 Kasum (kahjum) bioloogilistelt varadeltProfitLossFromBiologicalAssets Ka_80_1 Valmis- ja lõpetamata toodangu varude jääkide muutusChangesInInventoriesOfFinishedGoodsAndWorkInProgress Ka_90_1 Kapitaliseeritud väljaminekud oma tarbeks põhivara valmistamisel WorkPerformedByEntityAndCapitalised Ka_100_1 Kaubad, toore, materjal ja teenusedRawMaterialsAndConsumablesUsed Ka_110_1 Mitmesugused tegevuskuludOtherOperatingExpense Ka_250_1 TööjõukuludEmployeeExpense Ka_260_1 Põhivara kulum ja väärtuse langusDepreciationAndImpairmentLossReversal Ka_270_1 Muud ärikuludOtherExpense Ka_280_1 Ärikasum (-kahjum)TotalProfitLoss Ka_290_1 Finantstulud ja -kuludFinancialIncomeAndExpense Ka_330_1 Kasum (kahjum) enne tulumaksustamistTotalProfitLossBeforeTax Ka_340_1 TulumaksIncomeTaxExpense Ka_350_1 Aruandeaasta kasum (kahjum)TotalAnnualPeriodProfitLoss Ka_360_1 Müüdud toodangu (kaupade, teenuste) kuluCostOfSales Ka_390_1 Brutokasum (-kahjum)TotalGrossProfitLoss Ka_400_1 TurustuskuludDistributionCosts Ka_410_1 ÜldhalduskuludAdministrativeExpense Ka_420_1

Statistics Estonia, Tiina Pärson Sample of the created statistical code

Statistics Estonia, Tiina Pärson New formulas and rules to calculate statistical variables Variable code in EKOMAR Name of the variable in EKOMAR Formula EMTAK = NACE mc.c_10Turnoverm.Ka_50_1+m.L34_100_1+m.L34_110_1 mc.c_11sale to non-residents (export)m.L32_90_1-m.L32_10_1 mc.c_12sale to EU Member Statesm.L32_40_1-m.L32_10_1 mc.c_755Other revenuem.Ka_60_1 mc.c_760profit from the sale of tangible assetsm.L34_10_1+m.L34_20_1+m.L34_30_1+m.L34_40_1 mc.c_765profit from revaluationm.L34_50_1+m.L34_60_1 mc.c_21operating subsidies for agriculture activities mc.c_20operating subsidies mc.c_22Change in work-in-progress and finished goods inventories m.Ka_90_1 mc.c_35Profit/loss from biological assetsm.Ka_80_1 mc.c_40Capitalized self-constructed assetsm.Ka_100_1 mc.c_100Merchandisem.L35_30_1+m.L39_30_1EMTAK mc.c_100m.L35_30_1+m.L39_30_1+m.L35_20_1+m.L39_20_1+m.L 39_240_1+m.L40_180_1+m.L41_180_1 EMTAK>= and EMTAK< mc.c_110Services purchased for resale

Statistics Estonia, Tiina Pärson Data collection using prefilled questionnaires SE downloads annual bookkeeping reports to ADAM (a technical development is in the testing phase) Afterward the administrative data are converted into the statistical format by a transformation system (VAIS) The statistical questionnaire is prefilled in eSTAT. Prefilling is planned to be close to real- time. The first experimental prefilling was done since May to August 2011, once a week. The information from annual reports will be preloaded to the questionnaires and data providers are obliged to fill the blank gaps — information not available from annual report The double data collection will be avoided and the response burden of enterprises will be diminished The eSTAT should be improved for the year 2012 i.e. for the reference year 2011 data collection

Statistics Estonia, Tiina Pärson Thank you !