By Piechocki, Michal
Strategic Finance , Vol. 92, No. 6
When Paul Madden, program director of the Australian government's Standard Business Reporting (SBR) Program, reconfirmed at the 21st XBRL International Conference in Beijing that the expected annual savings for Australian businesses would top A$800 million in the coming years, thanks in part to the use of the eXtensible Business Reporting Language (XBRL) standard, many of the 700 participants wondered: Is this another governmental post-crisis declaration or something that businesses could actually benefit from?
Madden's statement, reinforced by the National Bank of Belgium's alreadyrealized annual savings of [euro]17 million (with a further [euro]40 million expected), together with announcements from regulatory bodies in the U.K., the Netherlands, Singapore, New Zealand, Brazil, and Taiwan, told the participants that something is going on among governments worldwide regarding the common business reporting language, XBRL, and SBR.
The recent economic crisis and trust meltdown imposed new challenges on governments to demonstrate that their market and business environments were not only safe but also competitive, less burdensome, and supported by proactive regulatory programs that help businesses survive and grow through difficult times. Among many well-known efforts--including bailouts--some governments took more-demanding approaches: simplifying the business environment, streamlining communications within/ across governments, and, above all, reducing the reporting burden for enterprises. The SBR idea, which emerged even before the crisis, builds on this foundational assumption: Government's role in part is to help businesses develop, not build hurdles and impose new burdens.
The concept of a long-term program that reduces administrative and reporting burdens for corporate entities through the use of a common, electronic, business-to-government (B2G) and government-to-government (G2G) language (based on the XBRL standard) was introduced in 2004 in the Netherlands by the Ministries of Finance and Justice. In a similar manner, the Australian Treasury launched its project about analysis of reporting burdens and established a cooperative initiative initially embracing five agencies: Tax Office, Bureau of Statistics, Securities and Investments Commission, Prudential Regulation Authority, and NSW Office of State Revenue. The Australian initiative, branded the Standard Business Reporting Program, soon developed into a holistic approach to governmental communication with B2G and G2G sharing of data received from enterprises, the goal of which is to simplify and streamline the exchange of business information.
The idea of SBR is simple: Corporate entities are required to provide numerous financial and nonfinancial reports and data sets to a variety of government agencies and bodies. Often these reports contain similar or even identical information within one agency field of supervision or across different business reporting areas, but they differ in terms of formats, structures, or transmission methods. Thus, compliance with regulatory reporting requirements results in increased time and cost burdens that hinder development of large and, even more importantly, small and mediumsized enterprises. On the other hand, government entities waste time on confirming the nature, understanding, or interpretation of data they receive through numerous communication channels.
Addressing these challenges, SBR Australia decided to use the XBRL standard and create a harmonized XBRL taxonomy that would be integrated into accounting software packages. In preparing to implement SBR, Australian agencies consolidated their reporting requirements; eliminated "nice-tohave," "just-in-case," and duplicate data; and clarified the nature of information collected from businesses. As a result, businesses are asked to submit data that is then normalized, harmonized, and populated into standardized regulatory reports so agencies receive consistent data sets, allowing them to perform instant supervisory checks and analysis. …