XBRL Update: Jan 2010

January 8, 2010

On December 4, 2009, the Securities and Exchange Commission launched its XBRL information portal, which can be found at http://xbrl.sec.gov. The portal consolidates in one easy to find central location all SEC related XBRL information and also highlights new XBRL developments to simplify searching for the most up-to-date information. In this issue of the XBRL Update, we will summarize the information available on the SEC’s XBRL portal, discuss the quality of the second wave of filings and provide you an update on how to best prepare for the upcoming 10-K and detailed tagging requirements.

SEC’s XBRL Portal

The SEC’s XBRL portal contains five main categories: Rules and Regulations; Background; View Filings; Interpretive Guidance; and Technical. Details of each category are as follows:

  • Rules and Regulations: Contains postings of final XBRL rules for Publicly Traded Companies, Mutual Funds, Nationally Recognized Statistical Rating Organizations and the Voluntary Filer Program (VFP).
    • Allows users to access the respective rules and regulations without having to search through the SEC website.
  • Background: Contains general XBRL information, covering:
    • A brief synopsis of XBRL and the countries in which XBRL has already been implemented.
    • A glossary of frequently used terms (i.e. element, concept, extensions, etc).
    • History of the SEC’s adoption of XBRL and information regarding the Office of Interactive Disclosure (OID).
  • View Filings: Various options for viewing XBRL filings submitted to the SEC are listed:
    • Users may subscribe to an RSS feed or view the latest 100 XBRL files submitted to the SEC.
    • View filings submitted under the VFP.
    • Search EDGAR filings (which include XBRL exhibits, if submitted) by company name, ticker symbol or CIK number.
    • Link to upload XBRL files to the Interactive Data Viewer (“Previewer”).
  • Interpretive Guidance: The SEC will continue to issue XBRL guidance based on their

review of interactive data submissions and questions raised by filers and agents.

  • Technical: The technical section includes links to:
    • Approved taxonomies.
    • The EDGAR Filer Manual.
    • Shortcut to the SEC Previewer.
    • Listing of EDGAR XBRL Validation Errors and Warnings.

Second Wave of Filings Submitted to the SEC

On September 28, 2009, the SEC updated the EDGAR system to enhance its Interactive Data (XBRL) file validation capabilities. Since the update, Business Wire has been closely monitoring the quality of the filings, noting a marked improvement in the SEC submissions as compared to the prior quarter. Furthermore, upon closer examination, we have noted through two sets of independent validation tools that the SEC continues to accept filings with EDGAR Filer Manual

errors. From September 28th through November 20th, we noted 30 out of 410 filings had at least one error according to one of the validation tools.

10-K and Detailed Tagging Requirements

Along with the 10‐K filing come additional XBRL requirements, which include mapping: the Statement of Shareholders’ Equity, additional notes to the financial statements and financial statement schedules.

  • Detailed Tagging: For clients required to file XBRL exhibits in the first phase, detailed tagging will be here before we know it. First phase filers will be required to present detailed tags for their second quarter filing in 2010. Detail tagging creates an additional burden on the filer as it increases the amount of work required to ensure XBRL compliance and forces the filer to change their financial reporting process to ensure ample time in incorporating last minute changes.

Have any XBRL questions or concerns?  Simply contact us at XBRL@BusinessWire.com.


Why Business Wire for XBRL?

January 5, 2010

by Ali Paksima, CPA, XBRL Accounting Manager, Business Wire

We believe Business Wire is the obvious choice for converting your financials to XBRL format.  It’s not only because we are more cost-effective than most, it is also because our approach to XBRL sets us apart from all others.

Below are several statements we hear frequently from public company clients.  Our hunch is that many of you are having the same thoughts, therefore we’ve provided our responses to these statements.  We believe you’ll understand precisely why Business Wire is better after learning more about our approach:

Client Statement: We know our financials better than anyone else.

We cannot agree with you more. However, we know the U.S. GAAP Taxonomy and the SEC requirements for reporting in XBRL inside and out.  We also hire only CPA-level staffers who are intimately familiar with public company financial statements. For this reason we take a collaborative approach to XBRL (i.e., your knowledge combined with ours) and work as an extension of your team.

Our first step is always to read your financial statements so that we may understand your company and your financial statements better.  We then hold an introductory call to discuss your financial statements and afterwards immediately begin the task of identifying the appropriate XBRL elements and drawing up a list of points to clarify with your organization.  Next, we send you a report to review the selected elements, the corresponding definitions, and any additional points to discuss.  This process allows us to couple your knowledge of your company’s financials and our knowledge of the U.S. GAAP Taxonomy and the SEC requirements to identify the best elements that present your company’s financial statements in XBRL, fairly.

Client Question: Will we have control over our process and know exactly all of the inputs in our file?

With our collaborative approach to XBRL, you are in complete control throughout the entire process without having to become an expert in XBRL. We will review the element mapping with you and provide you with review and rendering reports. Furthermore, our collaborative approach includes unlimited consulting time. We will spend as much time with you as you want in order to increase your understanding of XBRL.

Client Question: Who at Business Wire works on our XBRL documents?

We have the best and the brightest people working here:  CPA-level accountants and financial statement experts who know the implications of incorrectly tagged data.  Our in-house XBRL taxonomists (to whom you can reach out directly whenever you like, for no additional fee) bring their U.S. GAAP accounting experience to your XBRL filings.

It is important to note that Business Wire’s XBRL team works in the secure, audited confines of our New York operation, adjacent to our fully in-house EDGAR operation.

Business Wire is the clear choice for converting your financial statements to XBRL format.  We hope that these answers will enable you to make well-informed decisions when not only selecting an approach to XBRL, but when selecting a vendor too.  Feel free to contact us at any time (XBRL@BusinessWire.com) with any and all XBRL questions you may have. We look forward to showing you why Business Wire is better.


XBRL Update: October 2009

November 4, 2009

On October 6, 2009, the SEC issued “Staff Observations From Review of Interactive Data Financial Statements,” identifying improvements to the quality of XBRL submissions. The Staff commented on rendering, element selection, context references, negative values and negated labels, decimals and other observations.Below, please find the items from the SEC Staff’s observations that we believe you should be aware of.

Rendering

The SEC continues to emphasize the following:

  • Filers should not deviate from the EDGAR Filer Manual rules and jeopardize the quality of their XBRL files in order to correct rendering issues.
  • There is no requirement that the rendered files appear identical to the HTML/ASCII filing.
  • Filers should expect differences between the HTML/ASCII filing and the rendered XBRL files. Some of the differences are: Formatting,  column headings such as “Unaudited” and subheadings such as “Current Assets,” totals and subtotals, and format of the shareholders’ equity statement including how certain columns and subtotals render. However, certain differences can be eliminated such as: Labels should match, abstracts for headers should be used and each footnote should be presented separately.

Element Selection
The SEC Staff has identified 12 examples of common issues and as a result, encourages filers to:

  • Carefully search through the entire taxonomy to find an element with the narrowest definition that captures all material information.
  • Be aware of elements that are industry specific.
  • Do not create an extension when a) an appropriate standard element exists, and b) representing identical concepts reported on multiple financial statements within the same submission.
  • Create extensions when a) the standard element does not adequately capture all material information, b) combining the concepts of two or more standard elements, and c) splitting two concepts in a standard element.
  • Tag all amounts appearing in parenthesis and present them separately from the face of the financial statements.

Context References
Context references allow tagged information to be understood in relation to other information presented. The SEC staff notes:

  • Filers should use the same elements for common line items but create unique contexts (dimensions) to distinguish financial information for subsidiaries, businesses and segments.
  • When reporting roll-forwards, such as the statement of shareholders’ equity, filers should use the same context reference for the beginning balance and the ending balance of the previous period.

Negative Values and Negated Labels
The standard taxonomy is designed so that the monetary amounts for most elements should be entered as positive values. Filers should properly distinguish negative values and negated labels. For example, negative values should be used to represent a loss for an element that has both a gain or loss concept. Negated labels should be used to render a balance in brackets.

Decimals
Tagged amounts should accurately reflect the rounded values reported on the financial statements.

Other Observations
Filers should provide debit/credit balance types for balance sheet and income statement monetary extensions. In instances when an extension can take a positive or negative value in different periods (most commonly on the cash flow statement), filers should either assign an appropriate balance type or provide a definition.

Filers who are not amending their XBRL filings should set the Amendment Flag to “false” and should leave the Amendment Description blank.

Filers should post their Interactive Data exhibits on their corporate website by the end of calendar day on the day of submission. Furthermore, the SEC discourages compressing the Interactive Data files in a .zip file as it may make it more difficult for the end users to access.

To learn more about Business Wire’s XBRL Services, please contact Michael Becker, Business Wire’s Vice President of Global Disclosure and Financial Reporting Services.


Two Frank XBRL Questions, Two Candid Answers

October 28, 2009

by Michael Becker, Vice President, Global Disclosure and Financial Reporting Services, Business Wire

Quite often I speak at industry events on XBRL. At these events I take off my Business Wire hat and speak in general terms about the XBRL community. And while I enjoy nothing more than speaking to folks about XBRL, I have not had an opportunity to let you know how I personally feel, until now. This month we will answer two questions: How should you file (do-it-yourself vs. outsource); and if you opt to outsource XBRL, how do you select a partner?

However, before we can use words like “in-house,” “outsource,” “dimension” or “hypercube,” your organization must first lay the groundwork for XBRL. The primary task is to select a cross-departmental team of individuals who possess the requisite knowledge of your financial statements and footnotes (e.g., investor relations and financial reporting). This XBRL team will be tasked with knowing the SEC’s Interactive Data rule [PDF], the EDGAR Filer Manual (Volume II, Chapter Six), all relative U.S. GAAP Taxonomies and of course, the XBRL rules themselves. It will also be this team’s responsibility to set the XBRL timeline and recommend an approach (do-it-yourself vs. outsource) for your organization.

Question One: Should we tag XBRL in-house with a piece of software or outsource XBRL to a vendor? Do-it-yourself tagging is a long, long (long) way from perfect. This is because the software on the market today is not mature. While many of the XBRL software packages possess a nice graphical user interface (GUI), a solid GUI does not equate to high-quality XBRL. As a matter of fact, the XBRL filings that possessed the highest number of errors in Q2 originated from issuers who attempted to tackle XBRL on their own.

The problem with the in-house approach to XBRL is twofold. As stated earlier, the XBRL software community is maturing and, in my opinion, still has a way to go. Secondly, while XBRL is a computer language that should be easily handled by a computer program, today high-quality XBRL requires a human mind to make determinations on best practice use of taxonomies (e.g., to extend or not to extend a line item) and the EDGAR Filer Manual and XBRL rules. It is no wonder that several software vendors have changed their model to consulting.

Therefore, my recommendation is to not attempt XBRL on your own at this time. And, if you do opt to purchase a piece of software and tag your XBRL filing, work with a partner like Business Wire to QA the tags and assure that the XBRL exhibits validate properly prior to SEC submission.

Question Two: We’ve opted to outsource XBRL to a vendor. What questions should we ask when selecting a partner? Selecting an XBRL partner is important; this is one project where I dare say you get what you pay for.

First, ask where and how the XBRL services are being performed. This includes initial mapping and tagging, creation of the XBRL exhibits; and for those issuers who outsource EDGAR, ask if the XBRL team is in the same location as the EDGAR operation. We are aware that in order to scale, many vendors are outsourcing work to myriad locations in myriad manners. I disagree with this approach wholeheartedly.

An issuer must maintain control when outsourcing. Outsourcing to a vendor who outsources stymies the process and adds unnecessary variables, variables that are not welcome when working with material, non-public information.

Furthermore, the corporate XBRL team must be engaged because nobody knows the nuances of its financials better. Therefore, when selecting a vendor you will want:

  • First, the ability to speak with your taxonomist, who knows both U.S. GAAP accounting and XBRL , when you want;
  • And second, the ability to update your EDGAR filing and associated XBRL exhibits seamlessly, down to the last minute.

In essence, you must find a vendor that becomes an extension of your financial reporting team.

Nobody wants to make last-minute Author’s Alterations to an EDGAR filing, but it happens, and if it does, make sure your vendor can handle the XBRL and EDGAR changes in real-time. At Business Wire we have our EDGAR and XBRL teams located in one secure office to ensure updates are made in real-time and there are no version control issues.

You must also ask prospective vendors about the knowledge level of their XBRL staff. Be sure to speak with the individuals who will make tagging decisions on your financial statements. Confirm that these taxonomists are knowledgeable and that you will be able to work with them in a collaborative manner, at your pace. For example, at Business Wire we only hire CPA-level staff on our XBRL team.

Lastly, here are several additional questions to ask prospective vendors: At what level do you validate (e.g., XML, XBRL, EDGAR Filer Manual)? How much does the entire process cost (e.g., beware of hidden fees)? What sort of XBRL experience do you have and is the vendor financially stable?

In conclusion, one could easily argue that I am biased on this particular subject. The frank answer is that I am. From my seat, I can see the issuers who have attempted XBRL on their own and the errors they have made, I can see the vendors who outsource XBRL to foreign partners, I can see the vendors that have turned XBRL into an assembly line, I see the challenges of detailed footnote tagging ahead and then look at the brilliant XBRL minds who sit alongside me at Business Wire and think: Who in their right mind would not want to outsource XBRL to a partner like Business Wire?


XBRL Update: September 2009

September 24, 2009

The biggest lesson learned from the first wave of XBRL filings is the importance of proper validation. Depending on the validation tool used, results show that virtually every filing has at least one EDGAR Filer Manual error. Furthermore, 44% of all filings have two errors or more and the average number of errors per filing is 12.  Given the changes coming forth from the SEC and XBRL US, filers will need to quickly adopt procedures to better meet the upcoming challenges.

Here are several items you should be aware of:

SEC’s EDGAR system update with upcoming EDGAR Release 9.17:
On September 28, 2009, the SEC will update the EDGAR system to enhance its Interactive Data (XBRL) file validation capabilities. The updated EDGAR system will validate an increased number of technical requirements found in the EDGAR Filer Manual.

The first set of mandated XBRL filers were allowed to submit their XBRL filings without meeting all of the EDGAR Filer Manual requirements. It is important to note the enhanced EDGAR system may now strip out XBRL files that do not comply with the requirements of the EDGAR Filer Manual. Accordingly, the SEC highly encourages filers to have their XBRL filings tested in advance of the required submission dates.

FASB Codification & XBRL US GAAP Taxonomy:
On July 1, 2009, the Financial Accounting Standards Board (“FASB”) launched the FASB Accounting Standards Codification as the single source of authoritative non-governmental US GAAP, replacing existing authoritative accounting pronouncements including those issued by FASB, EITF, AICPA and other organizations. The Codification is effective for quarterly and annual reports ending after September 15, 2009. The Codification does not change GAAP, rather it introduces a new structure, which is organized into an easily accessible online research system and can be accessed at http://asc.fasb.org. To ensure the US GAAP taxonomy is up-to-date with the latest accounting references, on August 4, 2009, FASB and XBRL US revised the XBRL US GAAP Taxonomy to include links to the FASB’s Accounting Standards Codification for XBRL elements.

SEC XBRL FAQs:
Staff Interpretations and FAQs Related to Interactive Data Disclosure:
http://www.sec.gov/spotlight/xbrl/staff-interps.shtml

Compliance and Disclosure Interpretations on Interactive Data:
http://www.sec.gov/divisions/corpfin/guidance/interactivedatainterp.htm

For further information regarding XBRL, please listen to our Webinar or contact Business Wire’s Vice President of Global Disclosure and Financial Reporting Services, Michael Becker.


Expert XBRL Panel to Discuss Guidance for Successful Filings at Business Wire Webinar

September 16, 2009

More than 400 companies have now filed their first XBRL exhibits with the SEC, and there are important lessons to be learned from this first wave of filings.

Business Wire has assembled an expert panel to discuss these lessons and other tips for successfully transitioning your company to XBRL.  This hourlong webinar, “XBRL Update: Guidance for Successful Filings,” will be held on Thursday, Sept. 24 at 1pm ET.

The panel will be moderated by Michael Becker, Business Wire Vice President, Global Disclosure and Financial Reporting Services, and includes:

Don’t miss this opportunity for valuable insight on the XBRL creation process, best practices, recommendations and next steps for current and first time filers.  Register for “XBRL Update: Guidance for Successful Filings” today.

For more information on XBRL, visit XBRL U.S. For more on Business Wire’s XBRL products and services, visit the XBRL section on BusinessWire.com.

Business Wire VP Michael Becker on IROs and XBRL

July 15, 2009

Michael Becker, Business Wire’s Vice President, Global Disclosure and Financial Reporting Services, recently contributed an article called “IROs Need a Seat at the XBRL Table: Simple Steps You Can Take to Be Prepared Now” to Bulldog Reporter’s IR Alert.  The piece takes a look at the potential relationship between investor relations officers and their companies’ XBRL implementation, urging IROs to go beyond simply complying with web posting requirements and get involved from the ground up.

  • Read the article at IR Alert.
  • Download this article as a PDF.

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