xbrl (powerpoint, 3,72 mb)
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Global Capital Markets
RR Donnelley SEC Hot Topics
Interactive Data (XBRL)
Prepared and Presented by:
Sue Childs, EDGAR OnlineDavid Anderman, RR Donnelley Financial Services
September 17, 2008
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Agenda
• Interactive Data Electronic Applications (IDEA)• XBRL Technology Overview• Summary of SEC Proposed Rule• Data tagging alternatives
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Interactive Data Electronic Applications (IDEA): Overview
• On 8/19/08, SEC announced IDEA, the successor to EDGAR• Stated goal: To give investors faster and easier access to key financial
information about public companies and mutual funds – Will first supplement, then replace EDGAR– EDGAR will become archive for pre-XBRL filings
• Marks shift from submission of documents to submission of data
• Consistent with Interactive Data Initiative and previously announced $50M investment in EDGAR replacement
• Gradual phase-in of five years
• “By tapping the power of interactive data to tear down barriers to quick and meaningful investment information, markets can become fairer and more efficient while investors can possess far better quality data than was ever possible before.” (David Blaszkowsky, Director of the SEC’s Office of Interactive Disclosure)
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What Is XBRL?
What does it do?• Creates machine-processed data
for re-use and easy comparison
What is XBRL?• eXtensible Business Reporting
Language (Interactive Data)• Each line item is given data tag
standardized by US GAAP and different industries
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Key XBRL Terms to Know
Tag
• Machine-readable “barcode” that gives a standard definition for each line item in an income statement, SCF, or balance sheet
Taxonomy
A “dictionary” of tags for:• Specific accounting standards (US GAAP,
IFRS)• Industry segments (e.g., energy, REIT’s,
Broker-Dealers, Commercial)• Company-specific tags
Instance document
• Collection of tags that is the building block to viewing and analyzing data
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How Does XBRL Work?
FinancialStatements
FinancialStatements
XBRL-TaggedFinancial
Statements
XBRL-TaggedFinancial
Statements
SECSEC
Consumed by:
• Analysts / Research
• Investors (corporate & individual)
• Newswires / data aggregators
XBRL Taxonomy
TaggingSoftware
XBRL-TaggedFinancial
Statements
XBRL-TaggedFinancial
Statements
Scen
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XBRL-EnabledFinancial Reporting
Software
XBRL-EnabledFinancial Reporting
Software
XBRL Taxonomy
FinancialStatements
FinancialStatements
Internal External
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XBRL in Action
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XBRL in Action
Mutual Fund viewer on the SEC website to view XBRL for Risk/Return Summaries.
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Fund A Fund B
Fund A Fund B
Fund Comparison
XBRL in Action
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XBRL Adoption Around the WorldExpected to be mandated in 75% of the World’s Market Cap by end of 2008
EUROPEBelgium -France – Bank de France, AMF
Netherlands -4 Major MinistriesNorway - Exchange
Spain - Bank of Spain Sweden – Companies House
UK – HMRC (Companies House)
ASIA/PACIFICAustralia – Government Wide
China – Shanghai & Shenzhen Exchanges, CSRC, SFC
India – Bombay & India National Exchange, Bank of India
Japan – Tokyo Exchange & Bank of Japan
Korea – KOSDAQSingapore - ACRA
Thailand – Thailand Exchange
MIDDLE EAST/AFRICAAbu Dhabi – Exchange
Israel - Securities AuthoritySouth Africa - Exchange
SOUTH AMERICAArgentina – Bank of Argentina
Bolivia - Government-wideBrazil – Bank of BrazilChile – Bank of Chile
Columbia – Bank of ColumbiaPeru – Bank of Peru
NORTH AMERICACanada – CSA, Toronto Exchange
Cayman Islands - CIMAUS – FDIC, SEC, IRS
World Bank – Micro Lending
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XBRL Progression in US
SEC gets involved in XBRL1999
2000SEC adopts HTML standard
FDIC adopts XBRL 2005
2006XBRL VoluntaryProgram for‘34 Act filers
2007XBRL VoluntaryProgram for‘40 Act filers
SEC mandates XBRL2008
RRD among first to file in new HTML Standard
RRD/EOL among the first to file XBRL in SEC’s Voluntary Filing Program
RRD/EOL the first to file XBRL mapped to new US GAAP Taxonomy
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SEC Proposed Rules Released – May 30th, 2008XBRL Mandate Phase-in Schedule
• Proposed three year phase-in schedule:
– In year 1, the proposed rules would apply only to domestic and foreign large accelerated filers that use U.S. GAAP and have a worldwide public float above $5 billion (measured as of 2nd Q of the fiscal year), estimated to cover approximately 500 companies.
– In year 2, all other domestic and foreign large accelerated filers using U.S. GAAP would be subject to interactive data reporting.
– In year 3, all remaining filers using U.S. GAAP, including smaller reporting companies, and all foreign private issuers that prepare their financial statements in accordance with IFRS as issued by the IASB would be subject to the same interactive data reporting requirements.
• If proposed rules are adopted, the first phase would begin with fiscal periods ending on or after December 15, 2008
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SEC Proposed Rules Released – May 30th, 2008What Needs to be Tagged in XBRL?
Face Financial Statements
• Financial statements refer to the statements of financial position (balance sheet), income statement, statement of comprehensive income, statement of cash flows and statement of owner’s equity
• Interactive data would be required for all periods included in the filer’s financial statements.
• The disclosure in interactive data format would supplement, but not replace or change, disclosure using the traditional electronic filing formats in ASCII or HTML.
Footnotes & Schedules
• The financial statement footnotes and financial statement schedules also would be tagged in each filer's first year, but in block text only.
• After the first year of such tagging, a filer also would be required to tag the detailed disclosures within the footnotes and schedules.
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SEC Proposed Rules Released – May 30th, 2008XBRL Submission Timing
• Interactive data would be required to be provided to the Commission, and posted on company websites, at the same time as the related report or registration statement, with two exceptions:
• A 30 day grace period would be permitted for the first interactive data exhibit of each filer
• A 30 day grace period would be permitted for the first interactive data exhibit that is required to include the footnotes and schedules tagged in detail.
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SEC Proposed Rules Released – May 30th, 2008EDGAR Submissions Affected
Periodic & Transition Reports
• Interactive data would be required to be provided as an exhibit to Annual and Quarterly reports and transition reports
• XBRL files would supplement, but not replace or change, disclosure using the traditional electronic filing formats in ASCII or HTML.
Registration Statements
• All registration statements filed under the Securities Act, including IPOs, will be required to include interactive data when financial statements are included directly in the registration statement
• Interactive data would not be required as an exhibit to a Securities Act registration statement that does not contain financial statements (such as a Form S-3 filed by an issuer that is eligible to and does incorporate by reference all required financial statements from its periodic reports).
Business Combinations
• Under the proposed rules, interactive data would be required for the acquiring company, the filer, but not for the company being acquired, in the context of a business combination.
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SEC Proposed Rules Released – May 30th, 2008Liability Framework
The Proposed Liability Framework
What is Furnished What is Filed• Interactive data file itself (instance
documents) • What the machines read (non-viewable
to humans)
• Viewable interactive data as displayed through software available on the Commission’s web site
• What humans read
• Would carry forward the pilot program’s liability regime
• Subject to the same liability under the federal securities laws as the corresponding portions of the official HTML or ASCII format filing
There’s no additional requirement for an auditor attestation or senior officer certification of XBRL data.
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SEC Proposed Rules Released – Summary of Comments
Implementation timeline
• Delay implementation 6-12 months to give technology and tools more time to mature
• Extend grace period for all filings for the first year (60 days for initial, 30 for subsequent)
Detailed footnotes
• Requirement to separately tag each number and narrative disclosure within each footnote excessive
• Lower level of specificity to avoid custom tags
• Create permanent grace period once detailed footnotes required
Delay concurrent filings
• Continue to file as 8-K
• Provide a five day grace period between HTML and XBRL
Form Types
• Start with 10-Qs, not 10-Ks
• Do not include Registration Statements – too burdensome
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XBRL Adoption Schedule for the US Timeline For Mandatory XBRL Filing
SEC Proposed Rules
SEC Final Rules
SEC mandate to file XBRL for Largest Accelerated Filers (Public float > $5B)
SEC mandate to file XBRL for remaining companies that report in US GAAP
End of May, 2008
Sept – Nov 2008
(for fiscal periods that end on or after 12/15/2008)
2009 / 2010 Results
Expected
Dates 2008 Results
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Alternatives for Tagging Your Data in XBRL
Enterprise SolutionIntegrate the XBRL mapping into your financial reporting system
Enterprise SolutionIntegrate the XBRL mapping into your financial reporting system
Self Tagging Software SolutionExport your financial statements, then use software to assign tags to each line item
Self Tagging Software SolutionExport your financial statements, then use software to assign tags to each line item
Full Service SolutionProvide your financials to service provider for tagging, then review and validate
Full Service SolutionProvide your financials to service provider for tagging, then review and validate
1. Identify XBRL software compatible with your enterprise GL system
2. Hire firm for enterprise implementation3. Train staff on XBRL mapping4. Map data at the GL level5. Export data for creation of XBRL submission
documents
1. Identify XBRL software compatible with your enterprise GL system
2. Hire firm for enterprise implementation3. Train staff on XBRL mapping4. Map data at the GL level5. Export data for creation of XBRL submission
documents
1. Purchase XBRL tagging software2. Output your financial statements3. Train staff on XBRL mapping4. Select taxonomy, then map each line item to
the correct XBRL element5. Prepare documents for SEC submission
1. Purchase XBRL tagging software2. Output your financial statements3. Train staff on XBRL mapping4. Select taxonomy, then map each line item to
the correct XBRL element5. Prepare documents for SEC submission
• Select full service provider• Provide financial statements • Review and verify XBRL tags• Sign off for submission of documents to SEC
• Select full service provider• Provide financial statements • Review and verify XBRL tags• Sign off for submission of documents to SEC
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Estimated Costs from SEC Proposed Rule
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Additional Resources