On January 30, the Securities and Exchange Commission issued final rules requiring issuers to provide financial information in interactive data format using eXtensible Business Reporting Language (XBRL) in periodic reports and registration statements filed with the SEC. As reported in the December 19, 2008, edition of Corporate and Financial Weekly Digest, the interactive data will be filed as an exhibit to an issuer’s financial statements and will supplement disclosure filed using the SEC’s traditional EDGAR electronic filing format. The XBRL requirements apply to domestic and foreign companies using U.S. Generally Accepted Accounting Principles, and will eventually apply to foreign private issuers using International Financial Reporting Standards issued by the International Accounting Standards Board.
To create interactive data files, issuers will be required to tag their financial statements using labels from a standard list of tags. In the first year of an issuer’s interactive data reporting, financial statement footnotes and schedules would only be tagged in block text (each financial statement note would require only one tag). Thereafter, issuers would also be required to tag detailed disclosures contained within their footnotes and schedules.
The principal changes in the final rules from the proposing release published by the SEC on May 30, 2008, include:
- Modified treatment of liability for the interactive data files under the federal securities laws only will be available for interactive data files that a filer submits within 24 months of the time the filer first is required to submit interactive data files and no later than October 31, 2014.
- The filers that will be phased in during year one will first be required to submit an interactive data file for a periodic report on Form 10-Q, Form 20-F or Form 40-F containing financial statements for a fiscal period ended on or after June 15, 2009. Filers that are phased in during years two and three will be treated in a similar manner. Filers that first become subject to the requirement to submit interactive data after year three will first be required to submit an interactive data file for a quarterly report on Form 10-Q or annual report on Form 20-F or Form 40-F, as applicable.
- The final rules require that interactive data be submitted with a registration statement filing under the Securities Act of 1933 only after a price or price range has been determined and any later time when the financial statements are changed, rather than requiring interactive data submissions with each filing
- The final rules require issuers to submit interactive data for financial statements contained in additional forms—Securities Act registration statements on Forms F-9 and F-10 and periodic reports on Forms 40-F as well as reports on Forms 8-K and Form 6-K that contain revised or updated financial statements.
- A filer must post the interactive data exhibit on its corporate website not later than the end of the calendar day it submitted or was required to submit the interactive data exhibit, whichever is earlier. As proposed, website posting would have been required by the end of the business rather than calendar day.
- Interactive data will be required to be posted for at least 12 months on an issuer’s website. The proposing release did not specify a time period.
- While the final rules require filers to tag separately each amount within a footnote or schedule (i.e., monetary value, percentage, and number), the final rules will permit, but not require, filers to tag, to the extent they choose, each narrative disclosure within a footnote.