XBRL Update: U.S. XBRL Initiative Begins to Move Beyond SEC Reporting

October 21, 2011
by Nicholas Messing, Junior XBRL Accountant/Business Wire
Nicholas Messing

Nicholas Messing

A recent piece of legislation signed into law by President Obama has caused a flurry of excitement in the XBRL community. The Child and Family Services Innovation and Improvement Act (H.R. 2883) might at first glance appear to be unrelated to the financial data coding world of XBRL, since the bulk of the bill is devoted to extending child and family welfare programs from the Social Security Act through the year 2016.

The key section for XBRL, however, is Sec. 105, Data Standardization for Improved Data Matching. This section explains a new requirement for the Secretary of the Department of Health and Human Services to designate common data elements and reporting standards for state-submitted reports on federal child welfare funds. Here, XBRL makes a surprise appearance: “The Secretary shall, to the extent practicable, incorporate existing non-proprietary standards, such as the eXtensible Business Reporting Language.”

Needless to say, this “shout-out”  to XBRL in federal legislation has not been taken lightly; and XBRL US, the nonprofit consortium for XBRL standards, has been vocal in their support. Campbell Pryde, President and CEO of XBRL US, issued the following statement: “Data and technology standards are critical to ensuring accurate, timely and consistent reporting of information. The application of XBRL as outlined in H.R. 2883 would significantly improve communication between the States and social services programs. We commend the President and the leaders in Congress responsible for this Act which help the Department of Health and Human Services administer its child welfare programs and better serve children who need help.”

On October 12, XBRL US held a Town Hall conference call to discuss the new and pending XBRL-related legislation. Since the passage of H.R. 2883, the next bill up to bat for XBRL in the House and Senate may be the Digital Accountability and Transparency Act. The DATA Act would further extend the reach of XBRL by requiring federal agencies to adopt financial data standards such as XBRL in order to better monitor federal spending.

Hudson Hollister, Counsel at House Committee on Oversight and Government Reform, spoke in favor of the DATA Act by saying, “XBRL pretty much occupies the field when it comes to organizing financial data and disseminating it… The adoption of XBRL for federal spending information would have very beneficial long-term effects on the federal government’s ability to analyze and disseminate, in a transparent fashion, its own spending information.”  Amy Edwards, Performance Budgeting Specialist for the Senate Budget Committee, discussed her work toward building support for the DATA Act in the Senate, and Diana Deem of the American Institute of Certified Public Accountants described the AICPA’s grassroots campaign, which includes letters of support for the DATA Act and meetings to educate members of Congress on XBRL.

Echoing this sentiment, Brad Monterio, on behalf of The Institute of Management Accountants voiced the IMA’s support for both pieces of legislation in a press release which recently crossed our wire: “We urge members of Congress to pass the DATA Act and use XBRL as a tool to create transparency and accountability for government, much in the same way it did for The Child and Family Services Act.”

It is clearly significant that US lawmakers have begun to recognize the value of XBRL as a universal data reporting standard. These legislative developments suggest that future applications of XBRL are very likely to extend beyond the realm of SEC filings as the functionality of XBRL continues to expand and advance.


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?


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.

SEC Open Meeting on XBRL (Update: Date Change)

April 16, 2008

The SEC on Wednesday issued a Sunshine Act notice that on Monday, April 21, there will be an SEC Open Meeting to consider a possible rule for interactive data, also known as XBRL. The text of the rule itself will be published shortly after the meeting and we of course will keep you updated as to what develops.

Update: The SEC has changed the date of this meeting to Thursday Wednesday, May 14. The reason given in the SEC notice: “At times, changes in Commission priorities require alterations in the scheduling of meeting items.”


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