SEC Proposes XBRL Rulemaking
May 14, 2008
Earlier today, the U.S. Securities and Exchange Commission (SEC) voted to release for public comment a proposed rule regarding requirements for public companies to file certain data with the SEC using data tags in eXtensible Business Reporting Language (XBRL).
The proposal calls for a phased-in approach, with the largest 500 companies in the U.S. - specifically, those that file in U.S. generally accepted accounting principles (GAAP) and have a worldwide public float of over $5 billion - being required to provide financial statements in XBRL for fiscal periods ending on or after Dec. 15, 2008. In that first year, the SEC would permit footnotes to be provided in blocked tags. Thereafter, the detail within each footnote would have to be individually tagged. Smaller U.S. companies and companies filing in International Financial Reporting Standards (IFRS) would be phased in during the following two years. The SEC noted that it will monitor initial adoption by the largest companies to determine if any change to the remaining phase-in schedule is necessary for the smaller companies and foreign filers.
The filing deadline for XBRL data would be the same as that for the related SEC filings currently (annual reports, interim reports, registration statements, transition reports). However, an additional 30 day “grace period” would be provided for the initial XBRL filing of the financial statements, and a similar grace period would be provided for the initial filing of the detailed footnotes required in the second year.
The SEC did not specify during today’s webcast if the information would be “furnished” vs. “filed,” but SEC staff said the same liability - limited liability – would be applied as under the current XBRL voluntary filer program. Also, the SEC was silent on the question of auditor attestation.
A number of FEI member companies, including several from FEI’s Committee on Finance and Information Technology (CFIT) and Committee on Corporate Reporting (CCR), were among the 76 voluntary filer companies; the SEC thanked the voluntary filers today for providing important information.
SEC staff spoke of filing certain XBRL information in exhibits to SEC filings, and certain XBRL information would also have to be provided on corporate websites. Reference should be made to the rule proposal when published.
There will apparently be a 60-day comment period on the proposed rule when it gets published.
Links posted by SEC:
SEC Press Release "SEC Proposes New Way for Investors to Get Financial Information on Companies"
SEC Chairman Christopher Cox Opening Statement at May 14 open commission meeting
James Lopez, Legal Branch Chief, Divison of Corporation Finance, statement at May 14 open commission meeting
Other summaries from:
Prepared May 14, 2008 by Bill Sinnett, Director of Research, Financial Executives Research Foundation (FERF), and Edith Orenstein, Director, Technical Policy Analysis, Financial Executives International (FEI). This summary does not reflect FEI opinion unless specifically noted above.