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XBRL FAQ: What Is a Standard Business Reporting (SBR) Program?

Q What is a Standard Business Reporting (SBR) program, and what are its defining features?
A SBR programs are regulatory initiatives aimed at streamlining and reducing the cost of business-to-government reporting. There are currently two officially recognized SBR programs: the Standard Business Reporting Programma in The Netherlands and the Standard Business Reporting Program in Australia. The SBR approach is also under consideration by various other countries.The key features that distinguish a SBR initiative are:They are cross-government and multi-agency initiatives. This is a key feature because one of the immediate and most effective ways to reduce the reporting burden and the cost of compliance is to harmonize the information requested by multiple Government agencies, which is frequently duplicated. During the initial period of activity, in The Netherlands there was a reduction of reporting elements (fields in forms used to submit information to a Government agency, such as tax returns or financial statements) of 98%, from 200,000 to 4,500. In Australia the reduction was 71%, from 9,648 to 2,838. The benefit for those required to submit the information are evident, and in order to achieve this particular kind of result, multiple Government agencies must participate to the SBR program.

They cover multiple forms across different domains. This is another requirement to realize a significant regulatory burden reduction for two main reasons:

  • If multiple agencies require the submission of a single form – for example, financial statements of businesses – it is still possible to achieve some harmonization, but the benefits for businesses will be significantly less than in a situation in which multiple forms related to disparate domains – financial statements, tax, banking/insurance regulation, etc. – are harmonized;
  • If one agency requires multiple forms from businesses, and only one or even only a few of them fall within the scope of the SBR initiative, businesses will have to use the SBR channel for filing the SBR forms, and a different channel for filing the other forms.  This will result in more administrative burden, not less.

They make extensive use of open standards. The two existing SBR programs use the Extensible Business Reporting Language (XBRL) to represent the forms in scope with a single XBRL taxonomy. XBRL is not typically the only open standard used in a SBR initiative: data transport, messaging, authentication and encryption are only a few examples of other key components of SBR programs where open standards play a role.

In relation to the use of XBRL by SBR programs, the architecture of the XBRL taxonomy plays an important role – not from a technical perspective, but rather as a tool to facilitate harmonization and governance within the program. In the Australian SBR program, the key feature of the SBR AU taxonomy is its two-layered structure:

  1. The “definitional” layer, where all the reporting elements are defined. In other words this is the “dictionary” of all the harmonized fields that can be found in the forms in scope for the SBR program;
  2. The “reports” layer, where the fields defined in the definitional layer are used in specific forms. No reporting elements (fields) can be defined in a report, only the structure of the form itself is defined in this layer.

The benefits of this architecture for the Australian SBR program have been significant:

  • It facilitates harmonization, by providing a centralized repository (the definitional layer) where any data element that is added to the taxonomy must be defined, and processes that ensure the correct identification of similarities with existing elements when new elements are added to the repository;
  • It provides a clear framework for taxonomy governance by separating the definition of reporting elements, which happens in the definitional layer, and their use, which happens in the reports layer. The SBR Program has oversight on the definitional layer through a governance committee where the participating agencies are represented, while each agency “owns” the reports layer, or better the part of the reports layer that represents the agency’s own reports. This helped overcome the “political islands” between agencies and within agencies and foster collaboration.
If you have a XBRL question that you think is of general interest, just contact me or send me a direct tweet at @iphixbrl. I will answer it as an XBRL FAQ.
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