The upcoming filing season looks to be one of the busiest yet for XBRL preparers, with all US public companies submitting financial statements to the SEC required to include detail-tagged XBRL as of June 15, 2012. As the XBRL mandate reaches full implementation for SEC filings, the functionality of XBRL continues to expand through various initiatives including the DATA Act, corporate actions, and Business Wire’s Retail Report.
XBRL has increased its presence in the US Congress with the Digital Accountability and Transparency Act, which the House of Representatives unanimously passed on April 25, 2012. Known as the DATA act, this bill provides for a broader implementation of data reporting standards to track federal spending data. Following its strong bipartisan success in the House, the DATA Act has been referred to the Senate Committee on Homeland Security and Governmental Affairs. Similar to the Child and Family Services Innovation and Improvement Act, which was signed into law in October 2011, the DATA Act includes a significant reference to XBRL: “In designating reporting standards… the Commission shall, to the extent practicable, incorporate existing nonproprietary standards, such as the eXtensible Business Reporting Language (XBRL).”
XBRL US released the 2012 Corporate Actions Taxonomy for public comment on May 17, 2012. This is the second version of the Corporate Actions Taxonomy, designed to tag over 50 types of corporate actions announcements, including mergers and acquisitions, dividends, redemptions, tender offers, and stock splits. Approximately 200,000 corporate actions are released each year in the US, and these textual announcements require time-consuming manual steps to process as financial data. XBRL tagging of corporate actions releases would enhance the efficiency of downstream processing across the financial community. XBRL US has teamed with The Depository Trust & Clearing Corporation (DTCC) and The Society for Worldwide Interbank Financial Telecommunication (SWIFT) to promote the use of XBRL tagging for corporate actions in accordance with the existing ISO (International Organization for Standardization) standards.
On May 3, 2012, Business Wire became the first commercial newswire to map, tag and disseminate its own content in XBRL format. XBRL exhibits utilizing the US GAAP taxonomy now accompany Business Wire’s Retail Report, which is released monthly to Business Wire’s full national circuit. Published on the day that retailers announce sales figures for the previous month, the report tracks specialty apparel and general merchandise retailers’ monthly and year-to-date total sales with percentage comparisons across periods, alongside comparative stores’ sales growth data. To date, the April and May 2012 Retail Reports have been published with supplemental XBRL files, which may be freely downloaded and rendered through the SEC’s XBRL previewer, to facilitate analysis of retail sales data. Two members of Business Wire’s XBRL team, Senior XBRL Financial Reporting Specialist Belayneh Alemayehu and Junior XBRL Accountant Khondakar Moin, have provided their expertise to translate the Retail Report into XBRL. While Business Wire’s XBRL team has been proactively preparing for the final wave of the SEC’s XBRL mandate, we have also implemented a new innovation in interactive data.
Last week, Business Wire was proud to sponsor the 2012 IR Magazine US Awards in New York City. Our team attended the ceremony and BW President Gregg Castano presented the Best Overall Mid-Cap Award. We’re pleased to sponsor the event photos for the Awards.
Here are some pictures of our team at the ceremony:
Congratulations to all the winners!
As a “Self-Regulatory Organization,” NASDAQ is proving to be a poor role model in terms of policing its own policies.
The key difference between the SEC’s newly approved Section 907.00 in the Big Board rule book and NASDAQ’s rule change request is that the NYSE is recommending independent vendors to its listed companies. Conversely, NASDAQ’s proposal is entirely predicated on its sibling subsidiary’s wholly-owned service offerings, which collectively operate under the “Corporate Solutions” banner. Once the complimentary period expires, all future profits will go straight to NASDAQ’s parent company’s bottom line.
This systemic vertical integration provides NASDAQ with the pricing flexibility to artificially manipulate the pricing structure of its offering to the detriment of the entire IR services industry. It makes a mockery of the principle of fair competition, which is especially troubling given NASDAQ’s perceived Olympian stature in the free enterprise system.
Does the SEC really want to be seen as sanctioning NASDAQ’s “stacked deck?” We certainly hope not, as Americans’ confidence in the nation’s financial system is already seriously challenged.
NASDAQ’s opportunistic overture strains credibility on several levels.
NASDAQ trumpets that issuers are not obligated to take advantage of its complimentary services; the clear implication is that competition won’t be compromised.
Yet, NASDAQ itself says it is compelled to offer NYSE-listed companies complimentary services because the Big Board offers comparable services.
This is a tacit acknowledgment that companies are reluctant to forfeit these free services; instead, these “no-cost” services are a powerful incentive for issuers to remain with their current providers.
In other words, NASDAQ’s claim of open competition exists in name only. Budget-conscious issuers are extremely unlikely to pay for services that are freely available. And that means that rival IR service providers are unfairly elbowed out of the process. NASDAQ’s strategy seeks to divert the IPO pipeline to its sister service providers, effectively stanching the future lifeblood — and growth potential — of the IR service industry at large.
Furthermore, NASDAQ attempts to rationalize its rule change request by saying that a comparatively small number of issuers will be eligible to participate in the program. This is a vacuous argument that is indicative of NASDAQ’s cynicism in raising the bundling issue in yet another guise.
NASDAQ’S rule change request is its latest ploy to “tie” its corporate services to listings. The SEC has repeatedly rebuffed NASDAQ’s past efforts at bundling its services. NASDAQ’s recycled proposal seeks to provide a cloak of legitimacy to an anti-competitive practice that has failed to survive previous SEC scrutiny.
The SEC’s decision should not be influenced by NASDAQ’s understanding of the number of affected companies; rather, its decision should be solely based on the merits of NASDAQ’s proposal. And if market fairness is the one of the ultimate criteria, then the evidence clearly dictates that NASDAQ’s rule change should be rejected.
On July 8th, the SEC deployed updates to its official XBRL rendering engine (“Viewer” and “Previewer”) to address rendering issues for footnotes tagged at a detailed level. Below, learn more about this development.
Q2 2010 is the first quarter many Large Accelerated filers will begin filing footnotes tagged at a detailed level along with their face financial statements. Unfortunately, preliminary rendering results with the old Viewer were not very promising. For example, our testing showed the following rendering errors for information tagged at the detailed level (to name a few):
- Certain segment reporting information and dimension members did not render
- Notes tagged at a detailed level with the words “Cash” or “Equity” in the group title did not render
- Unrelated monetary elements, abstracts, data and time periods rendered repeatedly in multiple different notes, which lead to misleading information and made reviewing virtually impossible
- Decimals and currencies did not render appropriately
To facilitate the first wave of XBRL filings with detailed level information, the SEC enhanced its rendering engine to eliminate certain rendering errors and issues.
What does this mean to my company?
The SEC’s enhanced Viewer fixes many “bugs” and minor rendering issues for both year one and year two requirements. Significant fixes primarily relate to:
- Improved handling of mixed data types (units and decimals) within the same report. The Viewer can now display different units of measure in each group
- Updates to level iv detail tagged rendering to ensure complete display of all tagged data and improved rendering of column headings
- Allows for the display of currency symbols to ensure currency symbols are not displayed in the rendering for non-monetary amounts
- Improvements made to display non U.S. Dollar and other symbols
- Enhancements to Statement of Stockholders’ Equity rendering and detailed reports to eliminate duplicated ending balances
However, one issue that is not fixed relates to the 2009 Commitments and Contingencies element. Accordingly, we will continue to use the SEC prescribed workaround for this line item, where applicable. Business Wire is already updating the source code on our rendering tool and we expect to have it running with the enhancements shortly.
Finally, please keep in mind that although the SEC’s Viewer has been updated, differences between the HTML and XBRL filings will continue to exist. Potential rendering differences expected for Level iv detailed tagging include:
- Labels in the same group may not exactly match the expected footnote labels
- Narratives and tables may be combined or split up to improve rendering and review
Business Wire is more than happy to review with you rendering changes and differences that apply specifically to your filing.
Have any XBRL questions or concerns? Simply contact us at XBRL@BusinessWire.com.
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.
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:
Compliance and Disclosure Interpretations on Interactive Data: