Directorate A: Resources by 87D52HjJ


									     Directorate B: Quality, methodology and information systems
     Unit B1: Quality; Classifications

                                                           Draft Minutes
                                                 Wednesday 14 April 2010
                               Room AMPERE, BECH Building - Luxembourg

List of participants: Annex 1

A. Baigorri (Eurostat) welcomed the participants of the meeting of the Task Force on Accounting
and Statistics (TF-AS). The meeting was co-chaired by Mr J.M. Israël (ECB). The agenda was


C. Junker (Eurostat) informed the participants about the feedback and reporting provided to the
meeting of the Directors of Business Statistics (BSDG) in June 2009 and to the meetings of the
BSDG - Strategic Development Group in February and November 2009. The reports covered
various Commission initiatives, i.e. the possibility for Member States to exempt micro-entities
from producing standardised accounts, the review of the 4th and the 7th Directives and the IFRS
for SMEs. In November 2009, a report on the results of the project on the taxonomy for
accounting and statistical variables was provided to the BSDG-Strategic Development Group and
guidance for the future was requested. The taxonomy project aimed at mapping variables
requested within statistical surveys of businesses with international accounting standards and
yielded results that could be taken up by the MEETS programme at a later stage. The next BSDG
meeting will be held in June 2010 and a report from the TF-AS will cover recent developments,
including a debriefing from this TF-AS meeting.


J. M. Israël (ECB) debriefed on the joint (ECB/DG-S, Eurostat) presentation made to the
February CMFB meeting, which welcomed the report on the taxonomy project and took note of
the results that indicated a lower matching of variables than initially expected (except for credit
institutions with the ‘FINREP’ supervisory reporting format). However, results should be looked
at in the longer term perspective aiming at the end at reducing administrative burden and
improving the quality of statistics. In this respect, the forthcoming supervisory reporting by
insurance corporations under ‘Solvency II’ may contribute (see item 3.3 below). The CMFB
considered that efforts in the given direction should be further pursued, focusing on non-financial

C. Junker (Eurostat) reported on the results of the Eurostat taxonomy project. She reminded that
the work had been split in two parts, the ECB working on the financial annexes of the Structural
Business Statistics (SBS) regulation, whereas Eurostat focused its work on the non-financial
annexes of the SBS regulation and on other regulations targeting business statistics. The project
covered various steps such as an inventory of existing taxonomies (none was discovered), the
mapping of the regulations on SBS, Short-term statistics (STS) and PRODCOM in full against
the IFRS, the mapping of other business statistics related regulations, an estimation of the
potential reduction in burden if accounting data were used, and finally the mapping of all
regulations against the IFRS for SMEs.

The results of the mapping for the SBS variables revealed that from a total of 39 existing
variables 4 have a full match and 6 are close to match. For the STS variables, out of a total of 23
variables only 1 has a full match and 2 are close to match. As regards the other business statistics
related regulations, it appeared that their potential of matching with the IFRS is low and there is
thus a small prospect of using accounting data.

A mapping against the IFRS for SMEs could not be done due to the late publication of the
standards by the IASB. The prospects of mapping may not much differ, though.

The results have been presented to the BSDG, the CMFB and the TF-AS and the full reports are
available at CIRCA.

Based on the conclusions from the taxonomy project, and as agreed by the CMFB, the TF-AS
may now focus its work on providing a better consistency of definitions for the same kind of
statistical variables, on reconsidering the scope of the statistical variables and on aligning
statistical definitions with accounting concepts whenever regulations are subject to amendments.
All these objectives are of a medium to long term nature, while also very much in line with the
Eurostat “vision” for making the statistics production more efficient.


S. Milton (UK) asked about the close match of the variable "Wages and salaries" as this variable
would be very difficult to match. C. Junker answered that there is a potential of matching which
may not be feasible for other variables.

M. Ortega (ES) welcomed the project and informed about the creation in the next months of the
External Expert on Extension Panels (EEEP), created by the XAC. This group will guarantee that
a common taxonomy can be used throughout Europe when national and regulatory extensions are
added in the IFRS taxonomy. In this group, Mr Ortega has the mandate to represent the views of
statisticians. He suggested that one of the future works of the TF-AS could be to analyse the
impact on statistics stemming from the possibility to exempt micro-entities from producing
accounts (following the review of the Accounting Directives). C. Junker confirmed that this
subject may be taken up by the TF-AS in case the revised Directives are adopted.

D. Elgg (DE) reported that the Bundesbank will as well undertake a mapping against the German

Further to A. Leppilahti's question on the link between the work done so far on taxonomies and
XBRL, C. Junker replied that the aim of the project was to look at the substance and content of
the definitions before examining the technical transmission tools. In this context M. Ortega said
that it would be useful that regulatory bodies (such as Eurostat) prepare tools like XBRL-
taxonomies when preparing a new legislation. However, as XBRL is not a compulsory standard
for data transmission yet, Eurostat is not in a position to implement this.

M. Iannaccone (Italy) supported M. Ortega's views and reported on the difficulties to have
harmonised definitions. He gave an overview of the situation in Italy where XBRL is now
broadly used.


J.M. Israël gave an overview of the ECB taxonomy project which focused on the three financial
annexes of the SBS regulation, namely on credit institutions, insurance corporations and pension
funds. In the financial area, the response burden is linked to several aspects among which
statistics are probably a relatively minor one, supervision being by far a more important one. It is
evident that a taxonomy can help regulators to better assess the reporting burden. As a result it
can be stated that for credit institutions the module is manageable, while for insurance
corporations, and to a lesser extent for pension funds, the modules are large and detailed.

J.M. Israël then outline the external sources against which the mapping took place: IFRS, the
FINREP reporting by credit institutions, the “Solvency II” supervisory framework prepared by
the Committee of European Insurance and Occupational Pension Supervisors (CEIOPS), the
reporting of balance sheet statistics by credit institutions and money market funds, the reporting
of aggregated data on Insurance Corporations and Pension Funds via the format agreed among
National Central banks (in the “ICPF network”) and the OECD insurance yearbook. In the
mapping exercise, it appeared that low results were obtained for statistical sources because of
methodological and framework differences. Mapping to IFRS was also poor, mainly because the
IFRS taxonomy does not include adaptation by sectors of activity. However for FINREP and
CEIOPS the results are positive and work should be pursued in these two domains.

M. Ortega repeated his former request to see whether it would be possible, when preparing a new
regulation, to create a taxonomy simultaneously. This could be done by creating a new unit.
J.M. Israël replied that most ECB regulations on statistics are prepared in his Division, so that
there is no need to create a new unit. Work here would need to be coordinated with National
Central Banks. The ECB intends to map new requirements with the supervisory bodies, the
Committee of European Banking Supervisors (which prepared FINREP) and the CEIOPS.


N. Weydert (LU) mentioned that in Luxembourg, IFRS is not much used for annual accounts of
corporate companies. Therefore he believes that the mapping of IFRS with SBS and national
accounts definitions is less important than the mapping with local GAAPs. Luxembourg is about
to set up a Central Balance Sheet Office by the national statistical institute. As regards the
mapping of the Luxembourg national GAAP with SBS, about 80% of the accounting charter
(compulsory in Luxembourg) can be used to fill in the SBS questionnaire.

M. Ortega proposed that the TF-AS should be the focal point to disseminate information of what
is done in the Member States, especially on XBRL. For the latter also a workshop could be
organised to discuss available tools.
As for future work, the longer-term nature of the work on accounting and statistics was
confirmed, the alignment of standards not being an easy task and only yielding results in a
relatively remote future. The TF-AS should focus its activities on supporting the development of
national taxonomies, supporting and providing guidance to the ESSnet on the use of
administrative (including accounting) data, following up developments in the area of accounting
standards to assess their impact on statistics, organising possibly workshops and on coordinating
statistical legislation with regard to the alignment of statistical and accounting concepts.




A. Baigorri (Eurostat) presented the main elements of the Commission Communication on the
production method of EU statistics: a vision for the next decade this presenting a new strategy for
producing statistics in the ESS aiming at gaining efficiency and reducing response burden.

The vision aims to change the current way of production in so-called "stovepipes" towards an
integrated system of production based on a holistic approach. The respective governance
structures for implementing the vision have been created with the adoption of the new statistical
law, the establishment of the European Statistical Governance Advisory Board (ESGAB) and the
European Statistical Advisory Committee (ESAC) and the development of a comprehensive
management system. Several opportunities are created to reduce response burden by combining
administrative and statistical data sources, using a data warehouse approach, integrating
statistical domains and using accounting data.

The links to the work of the TF-AS were explained by highlighting that the vision encourages

 -    an increased use of administrative data and, thus, the use of accounting data for statistical
      purposes would be an example of doing so;

 -    the integration of statistical processes and, thus, the TF-AS orientation towards increasing
      the consistency of statistical definitions across statistical legislation, and towards aligning
      business statistics definitions with the accounting definitions would serve this purpose;

 -    the development of generic and /or common IT tools and, thus, the use of XBRL could be
      seen as an example for such tools.


A. Rutkauskiene (Eurostat) provided some background on the Programme for the modernisation
of European Enterprise and Trade Statistics (MEETS). She explained that the programme is
based on a legal act adopted in 2008 for a period of 5 years and for an amount of €42 million.
The first annual work programme has been adopted in early 2010. The 2011 annual programme
will most probably be adopted by the end of this year. 25 projects are currently running but there
is still some time to include new projects. Any new ideas are welcome. When the programme is
adopted, actions can be launched in the framework of calls for proposals and calls for tenders.

She gave a general overview of the objectives of the MEETS programme and focused her
presentation on Objective 3: to support implementation of a more efficient way of producing
enterprise and trade statistics. The aim is to make better use of data already available both in the
statistical system and in the economy, to avoid double burden on business.

One of the projects within this objective is the use of administrative data for business statistics.
Instruments have been put in place to implement this project:
-     18 Grants to Member States
-     A collaborative network of 8 national statistical institutes (ESSnet AdminData) which is
      aiming at solving common problems of Member States in this area. Nine work packages have
      been set up among which Work Package number 7 “Statistics and accounting standards” lead
      by 4 Member States (LT, IT, NL, PT). The aim is to define the differences and similarities
      between statistical and accounting concepts for the main characteristics of business statistics,
      to check why these differences exist and afterwards to build "bridges" between these


J.M. Israël (ECB) asked about the link of this project with the work of the TF-AS.
A. Rutkauskiene confirmed that this group will stay in very close contact with the TF-AS and
will make use of the results from the taxonomy project. The results of their kick-off meeting, to
be held in May, will be communicated.

She also informed that a CIRCA site gives the list of all projects together with contact
information of the project managers. Access to the site will be given to the TF-AS members.

D. Kelly (IRL) invited the managers of the MEETS programme to be cautious about the use of
Intrastat/Extrastat data, as their quality might be very poor.

K. Ivanov (Eurostat) took the opportunity to present two tools his unit is developing:
    1. A preliminary data set preparation questionnaire. It is a methodological tool leading
       statisticians to describe concepts and definitions used in a defined statistical production
    2. A software application aimed at modelling datasets.

These tools are considered to be used once the regulation is adopted but K. Ivanov does not see
any restriction to use them when preparing or amending legislation. He suggested that the TF-AS
be involved in this project. K. Ivanov is also project leader for one MEETS project called
"Facilitation of data transmission between enterprises and national statistical institutes".

                                                     TH       TH

A. Leppilahti (DG MARKT) explained that after the introduction of the IFRS in 2005, the main
users of the Accounting Directives were no longer the listed companies for their consolidated
accounts, but the SMEs. Amendments became necessary also to take into account the better
regulation approach to reduce administrative burden on smaller companies. The legal proposal
for the revised directives is expected to be finalised by the beginning of 2011.

The IFRS for SMEs have been issued by the IASB in July 2009. Member States have very mixed
views about their possible application in Europe. A public consultation has been launched by the
Commission in November 2009, asking the stakeholders about their opinion on the IFRS for
SMEs (whether they are suitable or not, if yes for which categories, whether their application
could be a Member State or company option, link with the directives,…).
Legally speaking Members States could use IFRS for SMEs if there is no conflict between the
IFRS for SMEs and the directives. The preliminary conclusion of EFRAG's study is that there are
only few such conflicts between IFRS for SMEs and the directives.

The potential scope for IFRS for SMEs in the EU would represent around 1.8 million companies
(micro-entities exempted).

In 2009, the Commission proposed to exempt micro-entities from the obligation to produce and
publish accounts under the requirements of the Accounting Directives. This proposal has been
supported by the European Parliament and is now with the Council. If the proposal is accepted,
micro-entities would still need to keep the accounts and records, but Member States would have
more flexibility for their national requirements.

A discussion is also ongoing about IFRS for SMEs’ applicability to “SMILEs” (small listed
companies) in order to make the access to the capital market easier.

Finally, A. Leppilahti informed that the discussion is still ongoing as regards the endorsement of
the accounting standards IFRS 9. Many stakeholders would prefer to assess the different phases
of the IFRS 9 as a whole before fixing their final position.


D. Revelin, is from ACP (Autorité de Contrôle Prudential), the French insurance advisory
interest and banking supervisory authority and is a member of the CEIOPS expert group on
He gave a general presentation of Solvency II which is an ongoing process for regulatory
requirements for insurance firms in the European Union. The scope of its application is all
insurance firms excluding very small firms. Pension funds are not covered either (another
Directive covers them). The legal basis includes:
 -    a framework directive (December 2009) to be implemented in October 2012;
 -    implementing measures;
 -    guidance with possibility of "binding technical standards" for instance on quantitative
      reporting templates (might be endorsed by the Commission).
He presented Solvency II’s valuation principles which are generally consistent with IFRS with
the exception of non adjustment of own credit standing for liabilities, a substantive part for the
balance sheets of insurance corporations.

It is important to note that the Directive on Insurance Accounts is not modified, meaning that
insurance companies will produce two sets of accounts: one to comply with the 1991 Directive,
and one in the framework of Solvency 2 for prudential purposes.

While Solvency II is geared towards calculating important prudential ratios e.g. the Solvency
Capital Requirement or Minimum Capital Requirement, it also foresees reporting requirement
from the industry to the (national and future European) insurance supervisory authorities. Two
types of reporting are required, one for supervisors and one for disclosure to the public. Annual
or quarterly quantitative reporting templates are harmonised and foreseen for all EEA

As regards the convergence with statistical requirements, there is cooperation and exchange of
information between supervisory authorities and national authorities (NSIs and/or NCBs) in
order to limit reporting burden. The supervision in the insurance area operates both on a solo and
on a consolidated (group) basis. The list of assets is also very detailed (line by line).

As a conclusion, it was noted that the reporting template under Solvency II may entail a wide
range of data included in the Structural Business Statistics and that a discussion would be held in
2011 to envisage, in the light of the final version of the template, how far SBS could be covered.

M. Hult (Eurostat) also informed that a working group will meet in November 2010 in order to
discuss the financial annexes of the SBS regulation, in particular on the best way to go forward
taking into account the needs of users, producers and the accounting frame. A representative of
CEIOPS or of a sub-group working under its umbrella may attend.


M. Ortega (ES) presented the main projects of the European Committee of Central Balance Sheet
Offices (ECCBSO) in 2009/2010:
-     monitor new projects: impact of IFRS in Europe (SME).
-     monitor the "Reducing reporting burden process in Europe and its impact on CBSO
-     standard formats: update formats and its taxonomy
-     XBRL and CBSO
-     Redesign and stabilization of ERICA databases.
-     Report on accounting and legal requirements in Europe.

He informed about a discussion paper sent by the IASB concerning preliminary views on a new
presentation of financial statements. The III WG of the ECCBSO disagreed with the IASB's
views because:
-     the new standard would be dedicated to meet the needs of capital providers and investors,
      the needs of statisticians being not covered;
-     comparability is not guaranteed
-     the information might be presented in a manner that is advisable for the entity (subjectivity);
-     increased difficulty of bookkeeping.

The proposal for the main works in 2010 is:
-     the use of ERICA for IFRS impact, fair value, financial structure, new ratios;
-     IFRS new projects: Management commentary and IFRS for SMEs, difference with current
      national GAAPS;
-     updating standard formats, creation of one from IFRS for SMEs;
-     monitor the reporting burden process; and
-     monitor the XBRL and IASCF developments.

D. Elgg (DE) expressed some apprehension about the application of IFRS for SMEs, in particular
with regard to the presentation of financial statements. According to A. Leppilahti, it is unlikely

that this standard will be become obligatory for SMEs. M. Ortega confirmed that this version of
the financial statements is likely to be addressed to listed companies only.


M. Roos (NL) presented the Structural Business Reporting Programme which started in January
2007 in the Netherlands with the aim of reducing administrative burden imposed by the tax
authorities, annual reporting and Statistics Netherlands, by using XBRL and a taxonomy.

The project received extremely low take up rates at the beginning. The positive aspects of the
project were that it provided harmonisation of the concepts, participation of commercial banks
(banking taxonomy), a XBRL-enabled administrative system readily available and the active
participation of bigger accounting firms.

Improvements are being made in terms of infrastructure (e.g. simplification of authentication,
lighter web protocol) and of communication between the administrations and the reporting
entities concerned. Recent results show a better understanding and willingness to use the


The chairpersons A. Baigorri (Eurostat) and J.M. Israël (ECB) concluded that the work of the
TF-AS covers two different aspects one focusing on more specific work such as the recently
completed taxonomy project and other taxonomies related to non-financial corporations and the
second one focusing more on the exchange of good practice and experience, workshops and
follow-up of developments in accounting.

The work of the TF-AS will now support and can draw its legitimacy from the Eurostat vision
promoting an integrated approach to statistics and, thus, contributing also to a more top-down
approach. Future work of the TF-AS should, thus, focus on the following aspects:

-     monitor results and encourage the further development of the taxonomy project in national
      context – also in the framework of the MEETS programme;
-     follow-up and check the consistency of the names and definitions of the variables in
      statistical legislation related to businesses;
-     pursue alignment of statistical definitions and concepts with those of the accounting
      standards when statistical legislation is revised and if this was feasible and serving the needs
      of statisticians in a satisfactory – though not perfect – manner;
-     report the work of the TF-AS to the Accounting Regulatory Committee, notably the results
      of the taxonomy project;
-     follow-up the micro-entities’ initiative and its possible impact on statistics; and
-     organise workshops on the exchange of good practice and experience as well as on the use
      of common tools (e.g. XBRL).

A greater use of accounting standards for statistical purposes would significantly reduce the
reporting burden and improve the statistical datasets, but it needs to be embedded in a broader
perspective and would contribute to changes in the way statistical data are produced. In

particular, it would make surveys more business-friendly, e.g. by aligning their content with
accounting and/or administrative reports, and utilising more estimation in the various statistical


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