By Campbell Pryde, President and CEO, XBRL US, and John Turner, CEO, XBRL International
U.S. regulators tasked with implementing the Financial Data Transparency Act (FDTA) would be well-served to consider how governments in other regions have adopted a standardized data approach to reducing administrative burden and improving efficiencies.
Standard Business Reporting (SBR) is a business-to-regulator reporting program that the Dutch government calls the “national standard for the digital exchange of business reports.” SBR programs rely on data standards, including the XBRL (eXtensible Business Reporting Language) standard for financial reporting, for the exchange of information between local regulatory authorities, banks, and businesses. The goal of SBR is to reduce administrative burden across businesses and government agencies through automation in data processing.
SBR provides a common, standards-based back-bone for data definition and data collection, and has focused on the creation of a collaborative ecosys-tem across the reporting supply chain. Central to the initiative’s success is the collaborative work done to agree and publish common technical definitions (“tags” or “electronic barcodes”) across different agencies that seek similar information from the same parts of the private and public sectors.
The program began on a voluntary basis in 2004, and worked in a voluntary mode for some time, establishing its first regulatory mandate in 2014. It is estimated to have met its goals of reducing admin-istrative burden by 25% in 2007 off the baseline burden of €16.3 billion which was reported in 2002; with an additional 25% reduction in administrative burden by the end of 2011.
Businesses gain from “whole of government reporting” which gives them a single point of regulatory contact and the ability to submit one report to meet a number of regulatory needs. Using XBRL for financial reporting is estimated to account for €750 million of the first 25% saved. Regulators gain from machine-readable data that is interoperable, automatable, and consistent with other datasets. Use of SBR has expanded significantly, with over 44 million XBRL reports submitted through the program in 2020, and 82% market adoption of the reference chart of accounts that was established to support SBR.
Be sure to read the case study – use link above.
