June 21, 2011

New Staff Observations on XBRL Released in Advance of Final Phase-in

The last round of phase-in for interactive data is now just around the corner, with upcoming quarterly reports for companies below the large accelerated filer threshold now subject to XBRL reporting requirements. Over the last couple of years, the Staff of the Commission’s Division of Risk, Strategy and Financial Innovation (Risk Fin) has completed reviews of interactive data financial statement submissions and has published general observations about those reviews.

In the latest set of observations published June 15th, the Staff addresses a wide range of XBRL issues including negative values, extending elements when an existing US GAAP taxonomy element is appropriate, “axis” and “member” use, and tagging completeness in the context of using parenthetical amounts. All pretty techie stuff, but nonetheless worth checking out and reviewing XBRL practices accordingly.

No Sign of an Interactive Data Reprieve

There is no sign of any XBRL reprieve for smaller companies, or for the need to perform detailed tagging of financial statement notes for larger companies, so it remains full-steam ahead for interactive data implementation efforts, with heavy reliance placed on third-party service providers. Given the reliance on third parties, this upcoming quarter-end could present some challenges for companies, given that so many issuers are seeking to create interactive data files all at once, and many for the first time.

It is a good idea to build some extra time into the filing schedule to account for any potential delays in turning last minute changes to financial statements and notes to financial statements, even if you are an experienced XBRL filer. Also, first-time XBRL filers should not overlook the requirement to post the interactive data files on the company’s website on the same calendar day that the interactive data files are submitted with the periodic report.

First time XBRL filers can also take some comfort in the availability of a one-time, 30-day grace period to submit the interactive data files (as well as a 30-day grace period for the first detailed tagging of the financial statement notes by already phased-in filers), although avoiding having to be in a position to use the grace period is still the best bet.

The most common XBRL question that I receive is who uses the XBRL files that companies go to such great lengths to create? To this day, I still don’t have a good answer for that one.

More on “The Mentor Blog”

We continue to post new items daily on our blog – “The Mentor Blog” – for members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:

– Insider Trading Analysis of Sokol Charges
– When Should an Investment Relations Officer Just Quit?
– FASB and IASB Significantly Revise Lease Accounting Proposals
– SEC Extracts Fines, But Not Confessions
– Fourth Circuit Holds Partial Disclosures Must Relate to Misrepresentations to Satisfy Loss Causation

– Dave Lynn