Structural business and financial statement statistics: documentation of statistics

Data description (SIMS 3.1)

The structural business and financial statement statistics describe enterprises operating in Finland. The statistics comprise industry-specific data on the number of enterprises, personnel, financial statements and itemisation of turnover and expenditure. The data on enterprises' financial statements describe the formation of profit, profitability and balance sheet structure in different industries. The examined variables are profit and loss account and balance sheet data, and parameters calculated from them. The statistics also include information on the growth of enterprises and how they have managed after the starting year.

Concepts and definitions (SIMS 3.4)

Assets covering technical provision

Assets covering technical provision is the result for the financial period in the insurance technical calculation of the insurance company. The main items in the calculation of assets covering technical provision are earned premium, claims incurred and operating expenses. In Finland, the income and expenses of investment activities for life insurance and pension insurance companies are included in the insurance technical calculation, not for non-life insurance companies.

Business ID (Identity code)

Business ID, or business and organisation code, is an identifying code given by authorities to all legal units. The Business ID consists of seven numbers, a hyphen and a control number.

Change in the provision for outstanding claims

The change in the provision for outstanding claims is the difference of the provision for outstanding claims at the beginning and end of the financial period. The change in the provision for outstanding claims is visible in the profit and loss account and claims incurred directed to the financial period can be determined as the sum of it and claims paid.

Change in the provision for unearned premiums

Calculated as the difference of the provision for unearned premiums at the beginning and end of the financial period. The change in the provision for unearned premiums is visible in the profit and loss account and earned premium directed to the financial period can be determined as the sum of premium income and provision for unearned premiums.

Claims incurred

Claims incurred consist of claims paid and changes in the provision for outstanding claims, from which reinsurers' shares are deducted. The part of claims to be paid is allocated to claims incurred that are directed to the financial period. Claims incurred are thus recorded on accrual basis.

Claims paid

Claims paid are recorded as expenses for the period when the benefits are paid before the reinsurers' share. The recording of claims paid is thus made on accrual basis. In addition to benefits, claims paid also include claims handling expenses.

Co-operative society

A community engaged in economic activity to benefit its members, whose number of members and capital are not been predetermined. The members participate in the activity by exploiting the services of the community. The founders of a co-operative society must number at least five. If the majority of the members are co-operative societies or communities, only three founding members are required. A co-operative society is entered into the Trade Register. A co-operative bank is a co-operative society engaged in banking activity.

Corporation subject to taxation

Corporations subject to taxation include: 1) corporations subject to taxation, 2) bodies jointly and severally liable for tax withholding, such as unregistered companies, foundations or association, 3) jointly owned forests, 4) farms, 5) trade associations and 6) other units subject to taxation.

Derivative instruments

Premiums paid for derivative instruments, including positive fair values of derivative instruments included among assets.

Direct insurance

Insurance business received by the insurance company directly from the policy holder. In direct insurance the policy holder is a customer that is not another insurance company

Earned premium

Earned premium consists of the sum of premium income and change in premium income, from which the reinsurers’ shares are deducted. Earned premium is income allocated from premium income directed to the financial period. Earned premium is thus recorded on accrual basis.

Enterprise

An enterprise is a unit with decision-making autonomy, which produces goods and/or services to be sold on the market. Enterprise corresponds to legal unit, if the legal unit is not part of an enterprise group. Otherwise, the enterprise is an enterprise group or part of one. The definition of enterprise is based on the EU regulation concerning statistical units (EEC) 696/93.

Enterprise group

An enterprise group is an economic entity formed by two or more enterprises, in which the group head has either alone or together with other enterprises belonging to the same group the right of control in one or several other enterprises (subsidiary companies). Cf. group of enterprises.

Enterprise Group Register

The largest enterprise groups operating in Finland are entered into the Enterprise Group Register. Data on an enterprise groups' turnover, balance sheet total and number of employees are entered annually into the Enterprise Group Register. In addition, information is recorded about the structure of the enterprise group: its group head, subsidiary companies, joint venture companies, associate companies and their Business IDs, group head's shares of ownership and votes in group companies, start and finish dates of group relationships and type of group membership. Municipal enterprise groups are also entered into the Register. Since 2003, the Enterprise Group Register has also contained sub-groups.

Equalisation provision

Nowadays only concerns non-life insurance companies. The equalisation provisions equalises the effect of random variations of claims paid on assets covering technical provision. The average of a longer term claims ratio is used in calculating the equalisation provision.

Foundation

A foundation refers to assets set aside for a certain purpose and administered by the board of the foundation. A foundation can be established with a charter of foundation, last will and testament or a deed of donation. A licence to establish a foundation must be applied for from the Board of Patents and Registration, which also ratifies the rules of the foundation. A foundation is entered into the register of foundations maintained by the Board of Patents and Registration. Funds also belong to this category of legal form.

General partnership

A general partnership must have at least two founders who may be either natural or legal persons. Each partner in a general partnership is responsible for the partnership's liabilities to their full extent as if they were their own debt. A general partnership is entered into the Trade Register.

Intangible assets

Intangible rights and assets acquired against a consideration (e.g. concessions, patents, licenses and trademarks). Intangible assets generated through internal development activities can be included on a prudent basis.

Inventories

Current assets refer to commodities intended for assignment or consumption as such or after further processing. Current assets are divided into materials and supplies, work in progress, finished goods, other current assets and advance payments. Materials and supplies refer to the commodities which have been acquired for the purpose of manufacturing current assets by a party obliged to keep books and engaged in manufacturing or service provision. These commodities include the raw materials and materials and auxiliary substances used in the production of goods or services. Work in progress refers to commodities intended for sale or for use in service production, whose manufacturing process is not finished at the time of the closing of the accounts (semi-finished goods). Finished goods refer to self manufactured commodities that can be assigned, sold or used in service production. Goods refer to commodities from external suppliers that are intended for sale or for use in service production as they are. Other current assets refer to commodities bought or manufactured for the purpose of selling them as such or after further processing which are not included in the above mentioned current assets items. Other current assets may include, among others, lots or other property intended for sale which have been transferred from fixed assets to current assets. Advance payments refer to purchase prices or parts thereof paid to the supplier of current assets commodities before receiving the commodities.

Legal form

Legal form identifies the legal status of a legal person. The classification of legal forms is based on the company forms of the Trade Register and on the requirements of taxation legislation. The legal forms of enterprises and corporations are recorded in the Business Information System. Statistics Finland's classification of legal forms is based on this system and on the Tax Administration's coding of legal forms. Some of the Tax Administration's categories have been combined in Statistics Finland's classification.

Legal unit

A legal unit is a corporation, or an organisation registered for conducting business. A legal unit is identified with a Business ID. Legal units are, for example, limited companies, private practitioners of trade, co-operative societies, state-owned companies and foundations.

Liabilities

Liabilities is capital that external parties invest in the enterprise. A liability always involves a repayment obligation. The repayment period for current liabilities is at most one year and that of non-current liabilities is over one year. The main source of liabilities for an enterprise is banks. Different forms of lending include short and long-term credits, overdrafts on current accounts, and intermediated credits.

Limited company

A limited company can be founded by one or more natural or legal persons. The share capital of a private limited company must be at least EUR 2,500 and that of a public limited company EUR 80,000. The shareholders are not personally responsible for the company's liabilities. A limited company is entered into the Trade Register.

Limited partnership

A limited partnership has both a liable and a silent partner. There may be one or more of each. Silent partners are only responsible for the partnership's liabilities up to the amount of capital they have invested into the partnership. Liable partners are liable for all debts of the partnership with their entire assets. The sizes of the investments of silent partners and the method for calculating their shares of profits must be recorded in the articles of incorporation of the partnership. A limited partnership is entered into the Trade Register. The name of a limited partnership must disclose its form either as an abbreviation or as an unabbreviated word.

Mutual interest bodies

Mutual interest bodies, such as fishery collectives and road maintenance associations.

Natural person

A natural person engages in entrepreneurial activity under his/her own name or under a registered trading name. This group includes own-account workers, sole proprietors, most agricultural and forestry entrepreneurs, as well as practitioners of trade.

Number of employees

Employees comprise wage and salary earners and self-employed persons. Employees are converted to annual full-time employees so that, for example, an employee working half-time represents one half of a person and two employees working half-time for one year represent one annual full-time employee. Labour input for self-employed persons is calculated as the input the owner of an enterprise or his/her family member makes into the enterprise without actual remuneration. For enterprises not included in the surveys of the Register of Enterprises and Establishments numbers of employees are estimated from data on wages and salaries.

Other assets

Receivables from payment transactions, receivables on various settlement accounts, margin receivables related to derivative instruments and other receivables not reported under any other item in the balance sheet.

Personnel expenses

Wages, salaries and rewards, pension expenses and other employer contributions = Personnel expenses Personnel expenses comprise wages and salaries subject to withholding of tax and comparable expenses, as well as expenses determined direct based on wage or salary, such as social security contributions, statutory and voluntary personal insurance contributions and pension expenses. Other voluntary personnel expenses come under other operating expenses.

Premium income

Premium income is recorded for the financial period when the insurance period started. It is reported before the reinsurers' share. Premium income is received from started insurance policies and assets at the end of the financial period. Credit losses of assets, insurance premium taxes, reductions and other public payments are deducted from premium income.

Provision for outstanding claims

Includes all provisions paid after the financial period which are formed from the insured events occurred in the financial period or before it.

Provision for unearned premiums

The provision for unearned premiums describes the part of the premium income in the financial period or earlier financial periods whose risk is directed to future financial periods.

Reinsurance

Reinsurance is an agreement between the direct insurance company and the insurance company acting as a reinsurer, by which the direct-writing company can transfer part of its insurance liability to be borne by another insurance company. Assumed reinsurance refers to insurance business received by an insurance company from another insurance company. Ceded reinsurance, which is visible in the profit and loss account as reinsurers’ shares, refers to the share of insurance business transferred to another insurance company.

Technical provisions

Formed as the sum of the provision for unearned premiums and the provision for outstanding claims. In insurance companies’ profit and loss account, technical provisions describe the transfer items of claims paid and earned premium to be transferred to the balance sheet, which are the insurance company’s debt to policy holders. Technical provisions are thus comparable to accrued liabilities in the financial statement of other fields

Type of ownership

The enterprises and corporations included in the Register of Enterprises and Establishments are divided into the following categories by type of ownership: Private domestic State Municipality Region of Åland Foreign-owned Other type of ownership.

Unit-linked insurances

In unit-linked insurances the insurance premiums of the policy holder are directed to one or several investment targets. The value of the insurance develops according to the value changes of the investment targets chosen by the policy holder.

Voluntary association

A voluntary association is an association founded by at least three private persons intending to join it as members or by an agreement of a corporation or foundation, and entered into the register of associations maintained by the National Board of Patents and Registration, the purpose of which is non-profit making (in other words the purpose may not be acquisition of profit or other financial benefit for the members). A voluntary association may engage in a trade or other gainful activity if an order concerning this is included in the association's by-laws or if such activity relates direct to the realisation of the association's purpose, or if the activity can be regarded as financially insignificant. E.g. sports association, political party, trade union, scout association.

Institutional mandate (SIMS 6)

Quality assurance (SIMS 11.1)

Release calendar (SIMS 8.1)

User access (SIMS 8.3)

Confidentiality - policy (SIMS 7.1)