Standard Business Reporting (SBR) is a group of programs instigated by government to reduce the regulatory burden for business. Various government departments, agencies and regulators collaborate to reduce the information sought by defining a standard common set of terms (taxonomy) using a business reporting standard such as XBRL. The same definition taxonomy (dictionary of terms) is used to create reporting taxonomies for each agency. Typically without such collaboration and standardization, the same information is reported in a variety of ways causing business to spend valuable resources for business reporting. SBR involves a better way of doing business because one harmonized standard data set is used. Reporting becomes a by-product of normal business processes, it becomes easier for business to manage its reporting obligation and the cost of compliance is reduced significantly.
SBR reduces the cost of reporting by minimizing the amount of information to be supplied, by minimizing the number of terms, by using only one term when the same information is referred to, by minimizing ambiguity and by communicating electronically quickly and efficiently. Information is tagged before reports are created, from the general ledger, not from completed reports.
Typically, SBR comes with one single sign-on for all agencies with a digital certificate, one authentication process, and with immediate acknowledgement and response. If there are errors, and there should be few because of validation and verification, the response should tell the user how to fix it and all this information would be in XBRL. Key benefits to business will include:
The first country to adopt SBR was the Netherlands, followed by Australia. In the Netherlands where SBR is in operation since January 2007, SBR is saving reporting companies 25% of their compliance costs. The number of reporting elements that companies have to keep has been reduced from about 200,000 to 4,500. In the Netherlands, agencies participating in the program include the taxation service, the company reporting services and the statistic bureau. It is expected that by mid 2012, all reports to government agencies and regulators will be able to be provided by SBR.
In Australia, SBR is expected to save Australian businesses AUD 795 million annually on an ongoing basis, freeing up resources for more profitable activities. They have reduced reducing the number of reporting elements by 71%, from 9,648 to 2,348. These elements include all elements for 87 forms (which is estimated to be 95% of the forms produced. 12 agencies participate in the Australian SBR program, ATO (taxation), ASEC (corporate regulator), APRA (banking regulator), ABS (statistics) and the 8 state taxation agencies.
In addition, accountants, bookkeepers, tax professionals and software developers will have access to a powerful system which will enable them not only to sent reports to government, but to banks and anyone else that requires business information. This information can be formatted to suit the needs of any consumer (e.g., investment counsellors).
The New Zealand government has announced that it too will adopt a similar SBR program. In fact, it is expected that this month there will be a signed agreement that New Zealand and Australia will adopt an aligned approach.
The incremental external costs of the Netherlands SBR project during the three years in which the taxonomy was created is estimated at 10-15 million Euros. The total cost of the Australian SBR project is estimated at AUD 320 million, but most of this cost is attributable to the creating of the IT infrastructure and not to the creation of the taxonomies. It is estimated that incremental external costs of creating the Australian taxonomies would be similar to the cost in the Netherlands. Time needed to create the definition and reporting taxonomies is about the same in both cases, that is 3 years.
References: Web sites:
and presentations given by Harm-Jan van Burg, Paul Madden, Marc van Hilvoorde and George Farkas.