The Dutch government has determined that starting from the financial year 2016, micro and small legal structures are obligated to distribute their financial statements in SBR (Standard Business Reporting). What does this mean exactly and what are the consequences for your company?
What is SBR?
For some years now, governments have been trying to work towards a digital financial reporting mechanism. This has been developed with XBRL (eXtensible Business Reporting Language). XBRL is a simple way in which financial and non-financial data can be regulated and exchanged between governments, companies and other authorities.
In order to get a clear picture regarding all the rules for creating reports based on the Dutch legislation for financial statements, there is the Dutch taxonomy. The Dutch taxonomy decides which elements from XBRL can be applied for Dutch cases. Where SBR is the Dutch taxonomy combined with XBRL, it is a method that puts financial data together into a standard business report.
Figure 1 SBR: XBRL combined with the Dutch taxonomy
How does XBRL work?
XBRL is a standard for digital business reporting, it provides a language in which reporting terms can be uniquely defined. These reporting terms can be used to represent contents of the financial statements. For example, by labelling the numbers and text, XBRL can “read” those labels and create a standard business report.
Which software tools are available?
For converting financial and non-financial data to XBRL, different software tools have been developed: from Disclosure Management solutions to integrated Excel software. Which software fits best with your company, depends completely on the demands and expectations that you and other organizations, like the chamber of commerce and the tax authority have.
A company with various SBR solutions like service- and conversion solutions, is ParsePort. For the conversion solution ParsePort uses a converter, which will be added to Excel and enables you to convert your financial statements from Excel. The biggest challenge is to show the converter where the various elements of the financial statements are located. You can do this by “tagging” every item in the financial statement with predefined “tags”, which allows the converter to understand the items in the financial statement and to create a standard business report.
SBR, for example is used by the following organizations in the Netherlands:
- The Chamber of Commerce
- The Tax Authorities
- The Central Agency for Statistics
The Chamber of Commerce
From December 2015 financial statements in writing are no longer accepted. To help companies get through this transition, the bill will be carried out in several phases. In order to do this, all companies will be separated between size based on 3 criteria. The table below shows the different criteria:
|Size||Assets||Net-turnover||Number of employees||Effective from|
|Micro||< € 350.000||< € 700.000||< 10 employees||Financial year 2016|
|Small||€ 350.000 – € 6M||€ 700.000 – € 12M||10-50 employees||Financial year 2016|
|Middle||€ 6 – € 20M||€ 12 – € 40M||50 – 250 employees||Financial year 2017|
|Large||> € 20M||> € 40M||> 250 employees||Financial year 2019|
Figure 2: Different criteria for separating the company size.
The Tax Authority
For tax authorities, it can be very helpful when financial statements are delivered in a standard way. There would not be any discussion regarding which information to provide and what the format should be. For that reason, the tax authorities provide several ways to provide your financial statement in SBR. A few of those options are presented below:
- Request to change or adjust the preliminary assessment of your corporation tax;
- Request postponement for corporation tax.
The Central Agency for Statistics
In the coming years, the Central Agency for Statistics also whishes to start using SBR. With the help of SBR, the CBS wants to make statistical data more reliable and trustworthy. In order to motivate companies to provide their financial statements to CBS in SBR, the CBS will provide valuable information to the companies in return. For example, strategical information regarding the core businesses of companies.
Banks have already been trying to get credit requests in SBR for years, but unfortunately, this has not worked out so far. Starting from 2017, banks will charge entrepreneurs € 250 when company details are not delivered in SBR format.
If you would like to get more information regarding SBR and how we could help you, do not hesitate to contact us!