Many SEC reporting managers may not look to the SEC as an obvious place to seek quick answers to the details of new rules. I would expect an inquiry call to go unreturned, or the answer to be riddled with caveats. But the reality is that the SEC wants XBRL to succeed, and has devoted a significant effort to ensuring that reporting managers, software developers, and service providers understand the new requirements of the rule on Interactive Data to Improve Financial Reporting.
Many reporting managers feel comfortable with the basics, but are often worried about missing some nuance. Looking at the actual rule, it seems relatively straightforward in scope. Here are the basics:
- The requirement will apply beginning with a “periodic report” on Form 10-Q, Form 20-F or Form 40-F containing financial statements for a fiscal period ending on or after June 15, 2009 and will be phased in as follows:
- LAF using US GAAP with public float >$5 Billion:
- June 15, 2009 – Face Financials and Block Tag Notes
- June 15, 2010 – Face Financials and Detail Tag Notes
- All other LAF using US GAAP:
- June 15, 2010 – Face Financials and Block Tag Notes
- June 15, 2011 – Face Financials and Detail Tag Notes
- All other filers using US GAAP:
- June 15, 2011 – Face Financials and Block Tag Notes
- June 15, 2012 – Face Financials and Detail Tag Notes
- Foreign issuers using IFRS/IASB:
- June 15, 2011 – Face Financials and Block Tag Notes
- June 15, 2012 – Face Financials and Detail Tag Notes
- LAF using US GAAP with public float >$5 Billion:
- The interactive data is to be filed at the same time as the filings to which is relates.
- However; the rule allows the first block tagged and first detailed tagged XBRL exhibits a grace period of 30 days.
- Financial statements in XBRL format must be posted on the corporate website no later than the end of the calendar day it filed or was required to file.
- Interactive data files are excluded from officer certification requirements. Auditors are not required to audit the interactive data files.
- The interactive data files will be subject to modified liability as long a filers “make a good faith attempt to comply with tagging requirements.”
- The SEC has a test filing process to help companies catch errors before actual submissions.
As we all know, most SEC guidelines just aren’t that cut and dried. Many of my customers have specific questions: What if the company changes filer status? Will the previewer have validations? What are the penalties for late or erroneous XBRL filings? The answers to my questions could all be found in the final rule itself. But I wanted confirmation that a loophole, caveat, or some barely-legible fine print didn’t make my conclusions obsolete.
So I decided to give the SEC’s newly promised accessibility a test drive, and picked up the phone the other day to determine how easy it might be for inquiring minds to get these questions answered. In past lives, I’ve only talked to the SEC directly in my capacity as an auditor of SEC comment letters. Let’s just say that these weren’t always pleasant conversations.
To my surprise and pleasure, I received a very prompt response (within a few hours) from an SEC expert, who requested a teleconference with me to answer my questions. The SEC analyst I spoke with was actually involved in drafting the rule. He patiently answered my questions, confirming my understanding of the written rule in laymen’s terms. He said things like “let’s step back for a minute” and “let’s use that example” and walked me through scenarios in a helpful and instructional way.
The next time you have a question on XBRL, I’d recommend that you go straight to the source: pick up the phone and call the SEC directly. The help desk appears to be open.
You can email the SEC directly with questions about the final interactive data rule here: [email protected]
By: Theresa Clark
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