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Frequently Asked Questions About XBRL
eXtensible Business Reporting Language (XBRL) is an emerging data format for defining and exchanging business and financial information. The U. S. Securities and Exchange Commission began accepting unofficial XBRL submission via EDGAR in a Voluntary Pilot Program in mid-2005. Originally developed by a consortium organized by the American Institute for Certified Public Accountants in 1998, XBRL has been embraced by the SEC as a next-generation format for transforming the EDGAR database from a document collection system to a true data collection system.
XBRL enables the creation of “interactive data” — by intelligently tagging financial elements in a company’s financial statements up front during the creation process and uploading that data into SEC EDGAR, analysts and investors will be able to analyze the data more readily. XBRL also allows business rules and calculations to be specified with the data, thus, increasing data accuracy. XBRL is quite popular internationally, as it allows the meaning and context of financial data to follow it wherever it goes, regardless of currency or language.
You’re probably quite familiar with the kind of financial data currently reported in a spreadsheet format. Imagine if the numerical value of each cell in that spreadsheet were placed in its own container, and a meaning (or context) assigned to that container which not only conveyed the meaning of that value (for example, “Cash”), but also its currency, units and duration (i.e., year ended 12/31/2008). XBRL provides exactly that kind of container, and allows the context of that container to accompany its numerical wherever it goes, allowing it to be easily and accurately stored in a database, calculated and analyzed.
Not yet, but you will be very soon. XBRL filings are currently being collected voluntarily by the SEC. At the moment, all XBRL data disclosed via EDGAR is UNOFFICIAL (just like the courtesy copies of EDGAR documents the SEC accepts in PDF format). HTML, ASCII and XML (for Section 16 Forms 3, 4 and 5), are still the OFFICIAL, REQUIRED formats for EDGAR submissions. Today you need only voluntarily file unofficial XBRL submissions, and you still have to file officially in HTML or ASCII.
On May 30, 2008, the SEC published a proposed rule suggesting a phased approach to mandating the submission of XBRL financial data as part of the EDGAR disclosure process for U.S. and foreign issuers who report using US-GAAP or IFRS. To view the text of the proposed rule regarding “Interactive Data for Improved Financial Reporting” (Release No. 33-8924), please visit: http://www.sec.gov/rules/proposed/2008/33-8924.pdf .
On June 10, 2008, the SEC published a proposed rule suggesting how the collection of interactive data might be implemented for mutual fund EDGAR filings. To view the text of the proposed rule regarding “Interactive Data for Mutual Fund Risk/Return Summary” (Release No. 33-8929), please visit: http://www.sec.gov/rules/proposed/2008/33-8929.pdf .Under the proposed rules, the first EDGAR filers to be impacted by requirements for XBRL filing are Corporation Finance filers reporting on US-GAAP.
In public statements regarding the proposed rule posted on www.sec.gov, the Commission has stated: “The SEC's proposed schedule would require companies using U.S. Generally Accepted Accounting Principles with a worldwide public float over $5 billion (approximately the 500 largest companies) to make financial disclosures using interactive data formatted in eXtensible Business Reporting Language (XBRL) for fiscal periods ending in late 2008. If adopted, the first interactive data provided under the new rules would be made public in early 2009. The remaining companies using U.S. GAAP would provide this disclosure over the following two years. Companies using International Financial Reporting Standards as issued by the International Accounting Standards Board would provide this disclosure for fiscal periods ending in late 2010. The disclosure would be provided as additional exhibits to annual and quarterly reports and registration statements. Companies also would be required to post this information on their websites.”
Regarding the EDGAR filing content which will require XBRL tagging, the Commission has stated: “The required tagged disclosures would include companies' primary financial statements, notes, and financial statement schedules. Initially, companies would tag notes and schedules as blocks of text, and a year later, they would provide tags for the details within the notes and schedules.”
The proposed rule regarding US-GAAP and IFRS XBRL filing has a 60-day comment period, which will expire August 1, 2008, during which the SEC will gather public comment on the requirements expressed in the proposed rule release. Following their analysis of the public comments, the Commission is expected to publish in the Fall of 2008 a final rule release stating the official timetable for implementation of XBRL for Corporation Finance filers reporting under US-GAAP or IFRS.
The proposed rule regarding mutual fund companies providing XBRL disclosure suggests a mandate for all mutual funds to submit risk/return summary data in XBRL starting December 31, 2009, using the Investment Company Institute’s Risk/Return (ICI RR) Summary XBRL taxonomy.Early adoption of XBRL by public companies in the United States has taken more time than originally anticipated. As of May 1, 2008, less than 100 of the more than 11,000 U.S. public companies are currently participating in the SEC’s pilot XBRL program and less than 400 EDGAR filings have been submitted as part of the XBRL Voluntary Filing Program. The majority of XBRL filings to date have been financial statements submitted as exhibits to Form 8-K filings.
To see the list of XBRL filings collected by the SEC during the VFP, visit this URL: http://www.sec.gov/spotlight/xbrl/xbrlwebapp.shtml.Source: The Corporate Directory of US Public Companies 2008. Walker's Research, Jan 2008.
For examples of what an XBRL filing looks like once it's disseminated, visit this URL: http://www.sec.gov/Archives/edgar/xbrl.html.
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The overall method is the same — map the financial data to the correct tags from the taxonomy. However, Investment Management XBRL filings are mapped to a different taxonomy than are Corporation Finance filings. Here’s a bit more detail describing the difference between the two types of XBRL filings currently accepted by the SEC:
For Corporation Finance filers
who wish to voluntarily file unofficial financial data in XBRL
on Form 8-K, 10-Q or 10-K (or another appropriate form):
XBRL US, Inc., the consortium dedicated to the adoption of XBRL, published a draft of the revised XBRL US-GAAP Taxonomies (collection of financial reporting concepts) for public review and comment on December 5, 2007. A public comment period provided an opportunity for stakeholders such as public company preparers, investors, financial analysts, auditors and software providers to review and comment on the taxonomies. The public comment period ended on April 4, 2008.
The SEC has approved the new, larger and more detailed US-GAAP taxonomy, and began accepting XBRL filings based upon it on June 23, 2008. To learn more about the US-GAAP taxonomies and to download documentation, including a Preparer’s Guide, visit http://xbrl.us/pages/us-gaap.aspx.
A taxonomy provides a set of elements or "tags", each representing a unique financial reporting concept, for companies to report their financial information in XBRL. While the latest release of the taxonomy is fairly complex, containing about 13,000 tags, this complexity may decrease the need for preparers to create company-specific extensions to accurately represent their financial statements.
The SEC has made it clear in its statements so far that nothing in the proposed rule will in any way change the current official EDGAR filing requirements for HTML or ASCII filing. XBRL is an additional EDGAR filing format and, for the next three years during which XBRL is phased in by the SEC, it will not replace any portion of the official HTML or ASCII disclosure still required by federal securities regulations.
For Investment Management filers who wish to file prospectus
Risk/Return Summary data in XBRL:
A Risk/Return Summary Data taxonomy, created by the Investment Company Institute (ICI), has been approved for usage by the SEC for XBRL filings. Investment management companies may use this taxonomy to voluntarily file XBRL versions of the risk/return summary data they have previously disclosed in official HTML or ASCII format via the EDGAR dissemination site.
For more information on the ICI Risk/Return Summary Data taxonomy, please visit: http://xbrl.ici.org/ .
As of May 1, 2008, approximately 20 investment management companies have furnished XBRL data voluntarily to the SEC. To view mutual fund data filed in XBRL via EDGAR, please visit: http://a.viewerprototype1.com/viewer.
At an Open Meeting on May 21, 2008, the Commission voted unanimously to formally propose that all of the more than 8,000 mutual funds in the U.S. be required to provide Risk/Return Summary data describing the fund’s investment objectives and strategies, risks, performance, and costs in XBRL as part of their EDGAR filings. Publication of the proposed rule regarding implementation of XBRL filing for mutual funds followed on June 10.
Andrew J. Donohue, Director of the SEC's Division of Investment Management, has stated, "This proposal would, if adopted, create an interactive database of key mutual fund information that will enable investors to more easily analyze and compare cost, performance, and other key information across the more than 8,000 available mutual funds. Together with the Commission's recently proposed summary prospectus, this proposal has the potential to transform information access for mutual fund investors."
The proposed rule suggests an effective date of December 31, 2009, and will allow mutual funds to include their Risk/Return Summary data in EDGAR filings as a supplemental exhibit. The current Voluntary Filing Program for investment management companies would remain in effect until then. The proposed rule also suggests a revision to the voluntary program that will allow Fund companies to file their Schedule of Investments without financials.
The proposed rule has a 60-day comment period, which expires August 1, 2008, during which the SEC will gather public comment regarding how what requirements should be specified in the final rule governing XBRL filing for mutual funds. The final rule is expected from the SEC in the fall of 2008.While XBRL is still voluntary, we highly recommend that companies join the XBRL VFP program to become experienced with XBRL filing. That way, you will be comfortable and ready when final rules are published and the official deadlines for mandated XBRL filing are known.
CT can help you right now. Start by emailing your inquiries to info@edgarease.com. Our XBRL filing preparation experts are ready to assist you.
CT was one of the first technology companies to pioneer software applications to support XBRL. With EE+, you have the ability right now to include XBRL documents within CT EDGAR Ease+ projects, perform EDGAR validation (before test filing or live filing your project) and transmit your XBRL filing to the SEC. You add the files to your EE+ project just like you add any other files to your official ASCII or HTML filing.
Outsource your XBRL filing document preparation to our EDGAR Ease Service Bureau, and we’ll not only comprehensively prepare your XBRL documents, we’ll train you to understand everything that is expected of you and your company as a participant in the SEC’s XBRL Voluntary Filing Program. Because you are an EE+ user, you can still maintain control of your EDGAR filing — just add the XBRL files CT creates for you to your EE+ project, error-check and transmit, just as you do any other EDGAR filing. In fact, participants in the SEC Voluntary Filing Program already use EE+ to submit their XBRL filings, including the very first mutual fund Risk/Return Summary XBRL filing submitted on August 20, 2007.
CT is an active and long-term participant in both the XBRL US Consortium and the Consortium of EDGAR Filing Agents and Software Developers. CT is designing the next generation of software tools and techniques to support XBRL, as we expect XBRL will become the commonly accepted standard for submitting financial data in the future. CT's knowledge of the emerging XBRL technology combined with its proven leadership in SEC EDGAR solutions makes it a perfect partner for companies who want to stay SEC-compliant, now and in the future.
If you are interested in XBRL filing right now, please call 888-89EDGAR and let our sales team know. We’ll assist you in finding the right solutions to prepare your first XBRL filing.
Please note that under the current protocols in place under the SEC’s Voluntary Filing Program (VFP), XBRL files are added to EDGAR filings as exhibits only. The main official document (8-K, 10-Q, 485BPOS, etc.) must still be prepared in HTML or ASCII and must contain the required descriptions of the XBRL exhibits, along with disclaimer language required by the SEC, attesting to the unaudited, unofficial nature of the XBRL data.
The SEC specifies that all XBRL files should be given a document type of EX-100, and there are specific suffixes that must be used to identify the different documents. XBRL submissions always involve multiple files (which are referred to as schemas, extensions, linkbases and instance documents). To read the SEC’s rules regarding XBRL files in EDGAR submissions, please see the appropriate chapter in the latest Volume II of the SEC’s EDGAR Filer Manual, available for download at http://www.sec.gov/info/edgar.shtml .
Preparing your first XBRL filing requires time and resource commitment from various participants within your company. The process does not follow the same document conversion model with which current EDGAR HTML and ASCII filers are so familiar.
Part of what makes XBRL filing more complex is the extensible (this is the “X” in XBRL) nature of the language. An XBRL taxonomy is a list of generally accepted tags officially approved by XBRL-US, ICI, the SEC and other agencies, but it isn’t the entire list of tags that may be used (even though there may be 13,000 or more tags in the taxonomy).
If your company cannot find a tag in the approved US-GAAP or ICI RR taxonomy which effectively describes a particular financial concept your company is using in its financial statements or prospectus, your company (with the help of an XBRL specialist), has the flexibility to create a new, custom tag.
The set of new, custom tags created to effectively describe financial concepts particular to your company’s financial statements are called “extensions.” Nearly all of the companies currently filing XBRL submissions voluntarily with the SEC have had to create extensions as part of the XBRL filing preparation process.
CT offers a comprehensive XBRL filing preparation service through its EDGAR Ease Service Bureau. CT’s XBRL VFP filing service will enable you to participate successfully in the SEC’s VFP program without a large investment in your time and resources. Preparing your first XBRL filing in-house can be a complex, time-consuming process and requires both XBRL and accounting expertise, so we urge you to use CT’s XBRL Filing Service to help you through the initial XBRL process. There is no need to buy expensive XBRL software or learn a complex new workflow only to feel like you are on your own creating the XBRL filing. CT’s XBRL VFP filing service is a comprehensive service that makes your first XBRL VFP filing easy and cost-effective.
As part of CT’s comprehensive XBRL service, CT will take your original Word or Excel documents, perform the XBRL tagging/mapping, create company-specific “extensions” if necessary, create XBRL documents, perform XBRL validation, and file it with the SEC (through XBRL VFP). CT will recommend appropriate “extensions” if there are items in your financials or prospectus that do not exist in the standard US-GAAP or ICI RR taxonomies. The XBRL work will be done by CT’s XBRL specialists that have XBRL knowledge and accounting background using a web-based XBRL application. CT will be collaborating with your company’s internal financial reporting staff in the preparation and review process. In addition, at the beginning of the project, CT will conduct a discovery process with the customer to review the data and provide a short training on the XBRL process.
Here is a step-by-step project plan for a typical XBRL Implementation:
Step 1 - Identify a team: Accountant and XBRL Specialist
Step 2 - Assess scope of reporting and determine taxonomy
Step 3 - Compare and map to the existing approved taxonomy
Step 4 - Extend the taxonomy as necessary
Step 5 - Create an instance document and validate calculations
Step 6 - Review and validate XBRL instance document
Step 7 – Submit all required official and unofficial EDGAR filing documents to the SEC.
Unlike many XBRL applications, our Service Bureau's technology:
The initial XBRL filing would usually take 1 to 2 weeks for CT to prepare. Subsequent filings usually take a few days.
Rely on CT’s SEC expertise for All Your EDGAR Filings
CT’s comprehensive suite of EDGAR solutions, proven expertise and superior quality is relied upon by Fortune 1000 companies, large law firms and investment management firms to ensure SEC compliance.
As the most comprehensive EDGAR filing software in the industry, the EDGAR Ease+ software suite supports every filing format the SEC accepts, including XBRL. CT was one of the first technology companies to pioneer software applications to support XBRL. With EE+, you have the ability right now to include XBRL documents within CT EDGAR Ease+ projects, perform EDGAR validation (before test filing or live filing your project) and transmit your XBRL filing to the SEC. You add the files to your EE+ project just like you add any other files for your official ASCII or HTML filing. Participants in the SEC Voluntary Filing Program already use EE+ to submit their XBRL filings, including the very first mutual fund Risk/Return Summary XBRL filing submitted on August 20, 2007.
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