United Nations Public Service Awards Case Studies

Singapore incorporated companies are required by law to prepare their Financial Statements (FS) in accordance with the Financial Reporting Standards (FRS) which are aligned to the International Financial Reporting Standards (IFRS) and to file the FS to ACRA as part of their annual returns.

Prior to 1 November 2007, there was no common reporting format for companies when they prepare or file their FS to ACRA. Companies filed their FS primarily by way of Portable Document Format (PDF) to ACRA. The annual return also comprised a financial highlights section where companies need to manually input 6 categories of financial figures. This process is tedious and error prone. Moreover, automating validation checks on whether the PDF FS is complete and/or valid would be impossible without manual screening which resulted in ACRA receiving on several occasions incomplete and/or blank FS, resulting in inefficiencies on remedial actions.

The business community is able to obtain either the electronic extracts of the PDF FS or limited financial highlights from ACRA. For comparative and/or benchmarking analysis, the business community had to manually retrieve the individual financial figures from the PDF FS of different companies or to obtain such information from information retailers which went through a similar process of data extraction. This made data analysis time consuming, costly and error prone for the business community as a whole.

In addition, different information retailers would have different ways of classifying financial figures in accordance with their respective proprietary taxonomies. Though the public would still be able to obtain the financial information across a wide spectrum of companies from the information retailers, they are made to bear the cost inefficiencies passed on by the information retailers and there is no consistent industry acknowledged taxonomy to facilitate comparison of financial information.

From the companies’ perspective, the inefficiencies arise from having proprietary accounting systems generating FS output in disparate formats and the market convention is to leverage on Microsoft office applications (i.e. Word or Excel) to report the FS from the resulting accounting systems’ output format. This inefficient process of changing from one output format to another reporting format to another filing format locked in critical intellectual human capacity which can be harnessed for better causes in society as the process can ultimately be made end-to-end (by having an accounting system direct interface with ACRA filing system in one open standard reporting format).

Previously, there is an over emphasis by the business community on the importance on linking signatures on the FS (director’s or auditor’s) to its authenticity. However, in the current electronic world of commence, the importance of data integrity is more critical as individual financial figures are extracted for analysis daily for business decisions. An emphasis on data integrity through adopting eXtensible Business Reporting Language (XBRL) for FS reporting enhances the value of information for business decision making.

What is the initiative about? (the solution)
XBRL allows financial figures to be individually extracted without human intervention from the FS as XBRL provides an identifying tag for each individual item of data, thus making the financial information interactive and computer readable. By receiving XBRL FS, this eliminates the need for companies to provide the financial highlights as part of their annual returns. This elimination creates cost and time savings for businesses. In addition, XBRL being an interoperable standard facilitates the data transfer of individual financial data from ACRA via web services to the business community. XBRL facilitates the platform for data sharing amongst Government agencies, thereby advancing knowledge management in the Government. Currently, XBRL FS are transferred seamlessly to the tax authority i.e. the Inland Revenue Authority of Singapore (IRAS) and the Department of Statistics for them to leverage on the interactive information to perform their functions better. Currently, companies that had filed full XBRL FS to ACRA need not file a copy to IRAS in their income tax returns. This represents the 1st step Singapore had taken towards realising the eventual one-stop filing portal. In the 1st quarter of 2009, ACRA will be leveraging on XBRL FS to introduce dynamic business intelligence that will enhance the information supply chain to the international business community and enables Singapore companies’ financials to be more transparent and available internationally, thereby raising the profile and viability of Singapore companies. XBRL FS data will be also made available by ACRA to any private sector organisation that can leverage on its interactivity to inject greater value in the delivery of financial information to the public. Since the launch of FS Manager on 1 May 2007, the system had been 100% available for public usage other than preplanned scheduled downtime for system maintenance and enhancement. System maintenance usually occurs once a month lasting between 4 to 10 hours, communicated well in advance to the users. Hence, there is confidence by the business community in using the FS Manager to prepare and file their FS any time any where 24 by 7. The user-friendly system interface allows a FS preparer to prepare a set of XBRL FS without the need to know how XBRL works. FS Manager is free of charge and incorporates extensive self-help features such as an step-by-step user guide. The FS Manager also receives positive feedback from the business community such as Deloitte Singapore which quoted “The FS Manager is an easy solution” in its response to a recent ACRA consultation on revisions to the ACRA Taxonomy. An issue plaguing the business community is the inconsistent financial terminologies used in FS reporting, this compromises comparability of financial information at a higher data granularity level (i.e. trade receivables etc.) rather than at a lower data granularity level (i.e. the total assets). With the introduction of a standard ACRA Taxonomy, this will enhance financial information comparison at a more granular data level and ultimately benefits the business community in having richer comparative financial information to make business decisions.

Who proposed the solution, who implemented it and who were the stakeholders?
The Ministry of Finance (MOF) had identified back in 2002 when the XBRL specifications 2.1 had not even been finalised by the XBRL International Inc. (XII), that this is the future of financial reporting. The former Permanent Secretary of Finance and ACRA Chairman, Mr. Lim Siong Guan envisioned that the availability of financial information in XBRL will benefit the business community. The current ACRA Chairman Mr. Teo Ming Kian has continued to provide the visionary leadership in charting the next strategic goal of embracing XBRL for the whole of Government. Ms Juthika Ramanathan, ACRA Chief Executive, a keen advocate for XBRL adoption, had identified this initiative as one that could enable a quantum leap in service delivery to the business community not only in Singapore but internationally such as real time data dissemination from ACRA to businesses the moment the XBRL FS is filed with ACRA. The Institute of Certified Public Accountants of Singapore (ICPAS) had also championed the adoption of XBRL in Singapore as early as 2001. As part of a structured due diligence process, ACRA had engaged PricewaterhouseCoopers to examine the feasibility of XBRL-enabled corporate FS reporting and filings in Singapore. The study identified that XBRL adoption in Singapore is feasible and the benefits associated. The ACRA Board, cognizant of the positive synergies that XBRL will bring forth to the business community gave the go ahead for the implementation of XBRL in October 2004. This is followed by an extensive exercise conducted by ACRA on the potential means of implementing the project. An open public tender was called and the implementation project was awarded to Ecquaria Technologies Pte Ltd (“Ecquaria”), a leading Singapore provider of e-Government consulting and solutions in February 2006. ACRA had put together a project team of officers from various divisions to implement this project led by ACRA Deputy Chief Executive who spearheaded the entire implementation exercise. Throughout the whole implementation process, ACRA collaborated very closely with the stakeholders who would be affected by the implementation such as companies, service providers, accounting firms, information retailers, professional bodies to ensure their concerns, feedback and requirements are been taken note of in the design of the ACRA Taxonomy, the FS Manager and the reengineering of the FS preparation and filing process. ACRA had also worked very closely with Singapore’s accounting firms and professional accounting bodies particularly the ICPAS in developing the current ACRA Taxonomy Two key Singapore professional bodies (1) Singapore Association of the Institute of Chartered Secretaries and Administrators (SAICSA) and (2) the Law society, have also contributed enormously to XBRL adoption. Their leadership in this traditional FS preparation where domain expertise resides in accountants has been invaluable in changing their members’ mindset that non accountants can equally add value and assist in XBRL FS preparation and filing with the intuitively easy to use FS Manager for non accountants.

Describe how and when the initiative was implemented by answering these questions
a. What were the strategies used to implement the initiative? In no more than 500 words, provide a summary of the main objectives and strategies of the initiative, how they were established and by whom.
Though the business community accepted the rationale and XBRL benefits, there were still the accounting system changes and costs involved that are necessary to enable XBRL FS preparation and filing. Fully cognizant of the costs involved and the limited XBRL expertise in Singapore and globally, ACRA made a deliberate policy decision to introduce an online XBRL FS preparation and filing tool “FS Manager” free of charge to the business community. ACRA recognised that reengineering existing market conventions needed time and instead of a big-bang approach in requiring the filing of only full XBRL FS, ACRA made a strategic decision by moving incrementally but steadfastly to allow the filing option of partial XBRL FS which included a minimum of the income statement, balance sheet and mandatory information. For companies choosing to file partial XBRL FS, there is technically no increase in resources needed as the partial XBRL FS simply substituted the financial highlights portion (albeit at a more granular data level) of the annual return that is eliminated. For the 1st year of XBRL FS filing, ACRA received 39,122 XBRL FS of which 9,931 are full XBRL FS. The business decision remains with the companies whether to prepare and file their FS in full or partial XBRL, what ACRA had done is to deliver a crystal clear commitment to the business community in the form of a visionary regulatory mandate, the first by a corporate registry globally. Companies would technically not incur any additional cost in preparing their FS in full XBRL and in the FS Manager, they have a system to prepare their FS either in XBRL or PDF to substitute their current FS preparation software. This is a key value proposition for small and medium sized companies which can use the FS Manager in lieu of commercial software application to prepare their FS for other purposes other than regulatory filing. In addition, FS Manager becomes the filing system when a company had a XBRL enabled accounting system/software. What had perhaps set XBRL implementation apart in Singapore had been the design of the ACRA Taxonomy which incorporates the requirements of the FRS in a streamlined manner based on a “Taxonomy for all industries” principle rather than a tailored specific taxonomy for each industry. The result may be less data granularity but this increases the comparability of financial information of companies across industries. The ACRA Taxonomy contains 464 data elements and 39 user-described data elements vis-à-vis the IFRS Taxonomy 2008 that had more than 2,500 data elements. The ACRA Taxonomy leverages on user-described data elements to introduce data granularity and utilises a closed taxonomy concept. This method eliminates companies’ need to acquire taxonomy building software or the need to understand the technological aspects behind it. This deliberate taxonomy design had enabled ACRA to move rapidly in XBRL implementation and be recognised as one of the global front movers and spurring other jurisdictions’ adoption of XBRL by demonstrating that XBRL implementation is possible with a “thinking out of the box” philosophy.

b. What were the key development and implementation steps and the chronology? No more than 500 words
The key catalyst for XBRL implementation in Singapore started with the studies in 2002 by the MOF on the potential of adopting XBRL. A cross-agency team was established to examine the merits of adopting XBRL in Singapore and ACRA was chosen amongst the agencies best suited to pioneer the adoption because of the intrinsic value-enhancing nature of XBRL with a corporate registry’s strategic role of bringing value into the entire spectrum of the financial information supply chain. ACRA collaborated on feasibility studies with its consultant, PricewaterhouseCoopers in 2004 and the ACRA Board endorses the XBRL implementation for FS filing in October 2004. An open public tender was called in August 2005 and the tender was awarded to Ecquaria in February 2006. In March 2006, the then Minister of State for Finance and Transport, Mrs Lim Hwee Hua, spoke at the ACRA inaugural public accountants conference, where she laid the strategic rationale and commitment for XBRL implementation in Singapore by ACRA. After the first FS Manager prototype is built, ACRA invited a number of large, medium and small public accounting firms, corporate service providers and a tertiary education institution to test the prototype to provide the real business perspectives which contributed enormously to the refinement of the system to suit business practicalities in the course of 2006. On 30 November 2006, ACRA held its first XBRL public awareness seminar reaching out to more than 600 participants and demonstrated the FS Manager functionalities. In February 2007, ACRA announced the official date for XBRL filing will commence with effect from 1 November 2007 and initiated its FS Manager public feedback month from 16 February to 16 March 2007. Cognizant of the need for the business community to be familiar with the use of FS Manager and XBRL, a deliberate policy intention was made to launch FS Manager for public use on 1 May 2007 (6 months before the official launch). In addition, training sessions provided by ACRA professional partners on FS Manager and XBRL were held since August 2007. 198 classes reaching out to more than 4,000 attendees from the business community have since been conducted. From May 2007, a series of public seminars reaching out to more than 3,000 attendees were held by ACRA jointly with its professional bodies on XBRL FS preparation and filing, including extensive question and answer sessions in which ACRA officers handled the public concerns and issues on XBRL implementation. Relevant feedback received during the public seminars was incorporated into the FS Manager. Individual letters were also sent to directors of companies on the new requirements during the course of 2007. Two practice directions were issued prior to the official launch of XBRL FS filing to ACRA on 1 November 2007. ACRA had also collaborated with a tertiary educational institution on XBRL including sponsoring an XBRL tertiary competition to build awareness amongst students on XBRL, fresh perspectives on possible enhancements to FS Manager and XBRL FS reporting process in Singapore were obtained.

c. What were the main obstacles encountered? How were they overcome? No more than 500 words
The main obstacle encountered in this change management is the existing market convention for corporate financial reporting, especially resistance from the accounting firms which are more comfortable with the traditional paper-based FS. Another significant obstacle is the lack of a global assurance standard on auditing XBRL as the international standards on auditing in which the Singapore standards on auditing is premised fundamentally on static documents. The accounting firms are generally uncomfortable with expressing an audit opinion on “interactive” FS format rather than a document based format (i.e. Paper or PDF). How ACRA managed their concerns have been to anchor the “human-readable” PDF FS copy to be identical in both form and content to the FS that was used for the purposes of the company’s annual general meeting (AGM) to facilitate full XBRL FS filing. ACRA had also allowed companies to file partial XBRL FS, which then becomes a mapping of the financial information from the AGM FS to the ACRA Taxonomy for companies which had decided that they are not yet ready for full XBRL filing. This involved legislative amendments that allowed the possibility of ACRA receiving XBRL FS and not constrained to a document based FS. ACRA had also collaborated very closely with the accounting firms to facilitate their clients which had elected to file partial XBRL FS to have the audited FS aligned closely to the ACRA Taxonomy for ease of filing. The high numbers of XBRL FS filings, had demonstrated that the process is intuitive and simple to grasp for the business community. The high number of full XBRL FS had also shown that companies and the accounting firms are gradually supporting the XBRL initiative of ACRA. Another group of stakeholders with a resistance to change are the service providers which assisted the companies to file their FS. What had been a fairly straightforward but inefficient process of converting paper-based FS into PDF for filing for this group of service providers needed a paradigm shift in their service output to their clients (i.e. companies) with the advent of XBRL FS filing, notwithstanding the fact that their services could easily be streamlined or even eliminated with an automated end-to-end FS filing process from companies directly to ACRA. Their resistance to change had been overcome with the invaluable leadership provided by the SAICSA on XBRL. SAICSA had also urged its members to leverage on XBRL to seize new opportunities to enhance their value delivery to their clients in what used to be a traditional domain of accountants in FS preparation. In addition, service providers are able to store their clients’ FS in a harmonised format instead of various disparate formats, resulting in cost savings and the ability to tap into greater value creation from the analysis of the stored financials.

d. What resources were used for the initiative and what were its key benefits? In no more than 500 words, specify what were the financial, technical and human resources’ costs associated with this initiative. Describe how resources were mobilized
The ACRA XBRL implementation project took approximately 14 months from the award tender to Ecquaria to the official launch of FS Manager on 1 May 2007 which was developed at a cost of approximately SGD 2.7 million. Ecquaria and its consortium of taxonomy and certification consultants with XBRL expertise partnered closely with ACRA to see through the project life cycle of consulting, requirements gathering, solution proposal, solution design, testing and commission of the FS Manager. The taxonomy consultant was responsible for the design and development of the ACRA Taxonomy in accordance with the FRS and XBRL 2.1 specifications. In addition, an independent certification consultant and an independent testing firm were engaged respectively by Ecquaria in the process to certify the system and XBRL related functions are compliant and to perform quality assurance on the system’s usability, functionality, load/stress, throughput etc. A project steering committee consisting of senior executive officers from ACRA and Ecquaria was set up to provide the overall strategic direction for the project. A project core working committee chaired by ACRA deputy chief executive made up of members from various ACRA divisions and Ecquaria was set up to implement the project and to resolve any operational challenges. The project core working committee members were effectively deployed to handle various tasks to ensure the successful implementation. The ACRA client engagement unit handled all aspects of public awareness and XBRL training programs to educate the business community on XBRL. ACRA client contact centre set up the designated XBRL-FS Manager Helpdesk with support from Ecquaria technical team from May 2007 to support users of FS Manager and issue resolution. The ACRA legal services division was instrumental in identifying the necessary revisions to the Companies Act to enable ACRA to accept XBRL FS as this represents a fundamental paradigm shift from ACRA receiving document based FS. The ACRA business facilitation division identified an opportunity to streamline the annual return filing process by merging the summary of return with the main return as one new annual form to coincide with the launch of XBRL FS filing as part of the annual return with effect from 1 November 2007. Based on annual return filings in excess of 100,000 per annum by the business community to ACRA, this represents a significant streamlining of time and cost benefit to the business community. ACRA had also granted companies filing full XBRL FS an additional month to file their annual returns. The ACRA financial reporting regulations division (FRRD) and information technology strategy division are the two lead divisions addressing the ACRA Taxonomy, FS Manager and technical implementation issues. ACRA FRRD also collaborated very closely with the accounting firms, corporate service providers, and companies throughout the implementation by seeking their feedback and had engaged in many focus group discussions with the stakeholders on how to better customise the ACRA Taxonomy and the FS Manager to fit business practicalities.

Is the initiative sustainable and transferable?
ACRA adopted XBRL precisely because of its long term sustainability as the globally acknowledged open standard for business reporting. This sustainability is further augmented by the International Accounting Standards Board’s adoption of XBRL and its investment into developing a IFRS XBRL taxonomy for global usage. Going forward, in a global landscape where most countries require the use of IFRS for corporate financial reporting, it makes strategic sense for Singapore to be amongst the pioneers of XBRL adoption so as to develop a corporate register that is interoperable and facilitates eventual comparison of financial figures for Singapore vis-à-vis its global counterparts in both a harmonised financial reporting framework (i.e. IFRS) and reporting format (i.e. XBRL). This will ultimately benefit the international business community where increasingly, the flow of global capital is no longer constrained by jurisdictional barriers and the domicile in which the equity is listed. In Singapore, it is ACRA’s strategic vision to transfer XBRL knowledge to other Government agencies so as to facilitate the eventual realisation of a one-stop filing portal in Singapore to harmonise regulatory business reporting to the Singapore Government and the Singapore Exchange. This will metamorphose into a Singapore wide taxonomy that will capture all regulatory business reporting data elements into a single file and in the process achieve integration of the many facets of regulatory submissions involving reporting terminologies and requirements. This will ultimately benefit the business community in lower compliance costs and clearer articulation of the various regulatory filing requirements in Singapore so as to sustain Singapore as the easiest place globally to do business in. The immediate term holds enormous promise for private sector innovation to bring XBRL adoption to the next level - ACRA had provided the needed catalyst to enable this via a visionary regulatory mandate, the only global corporate registry that had done so. Seamless integration of corporate financial reporting processes could be easily streamlined via XBRL to ACRA using a harmonised reporting open standard format, enabling the eventual automation of the FS preparation and filing process, thereby releasing private sector locked-in resources for value-enhancing activities that will promote economic sustainability for Singapore. This together with a Singapore Taxonomy will enable Singapore companies to submit the many pieces of information to all agencies the minute they close their books. They can do this without going through the process of collating information from their enterprise resource planning systems and packaging it up for the specific requirements of each agency, and by using such internal XBRL information for competitive business advantage. Dynamic business intelligence would be possible within the 1st quarter of 2009 in Singapore. ACRA is likely to be the first global corporate registry to introduce dynamic business intelligence thereby bringing enormous promise of real time financial analysis for the business community to make business decisions in an increasing global climate where real time information is vital to the continuing survival and growth of businesses.

What are the impact of your initiative and the lessons learned?
Fundamentally, what XBRL had achieved in Singapore was the streamlining of the existing inefficiencies in the entire spectrum of the financial information supply chain. With only one open standard format and standard taxonomy, there is clarity introduced in the standardisation of the many pieces of reporting terminologies. This thereby unlocks the current amount of intellectual capacity locked in on just deciding the form, FS format and reporting terminologies. A recent positive regulatory stand that ACRA had introduced is that the FS form is no longer relevant for filing purposes so long as the FS content filed is identical to the AGM FS. This sets the platform for the business community including the auditors to fundamentally look at financial information as (1) just data to facilitate business decision making; and (2) data integrity is strategically more important than the form. Implementing XBRL will increase the transparency of financial information thereby providing a solid foundation to ensure the sustenance of public trust in Singapore companies, fortifying the walls against any possible loss of confidence in the Singapore corporate governance landscape. This is especially pertinent during the current global financial crisis. Recognising the importance the business community and fellow Government agencies placed on XBRL financial information received from ACRA, ACRA had engaged an independent review to be conducted on the XBRL FS received. To build confidence on the use of XBRL financial information and educate FS preparers on the issues to take note of in preparation of the FS, ACRA would release the review findings and collaborate with companies on any remedial actions needed on the XBRL FS filed. The success of ACRA’s XBRL adoption provides the much needed impetus and positive reference which allowed the global XBRL community to champion the adoption of XBRL and its benefits more rigorously. ACRA is a direct participant of XII. ACRA officers had made presentations and participated in panel discussions on this initiative such as at the XII international steering committee meeting, the SBR/XBRL international conference held in Brisbane in November 2007 and the 17th XBRL international conference held in Eindhoven in May 2008. On separate occasions, ACRA had also shared this initiative with the members of the corporate registers forum to impart learning points to our fellow global counterparts which are keen to implement XBRL. . ACRA recognises the important and invaluable role professional associations play in implementing XBRL. A successful launch of the XBRL initiative would not have been possible without their full support. ACRA is also considering introducing an offline FS Manager from the feedback received from the business community. Feedback from the professional associations and accounting firms on the ACRA Taxonomy has been essential in refining the taxonomy, and such collaboration between ACRA and the private sector will be important going forward as the taxonomy changes in line with revisions to the accounting standards, and as it continues to strive to meet the information needs of the business community.


Institution Name:		Accounting and Corporate Regulatory Authority
Institution Type:		Government Agency
Contact Person:		Koo Beng Young Ivan
Title:		Head(Financial Reporting)
Telephone/ Fax:		(65)63253760
Institution's / Project's Website:		(65)62251676
E-mail:		ivan_koo@acra.gov.sg
Address:		10 Anson Road, #05-01/15, International Plaza
Postal Code:		079903
City:		Singapore
State/Province:		Singapore
Country:		Singapore

The Problem

Solution and Key Benefits

Actors and Stakeholders

(a) Strategies

(b) Implementation

(c) Overcoming Obstacles

(d) Use of Resources

Sustainability and Transferability

Lessons Learned

Contact Information