How can one be compliant with FERC’s XBRL mandate? What are the procedures to be followed?
The Federal Energy Regulatory Commission is solely responsible for the regulation of the natural gas, electricity, oil, and hydropower industries. As detailed in our previous blog, the commission introduced a mandate requiring energy companies regulated by FERC to submit their annual accounts in XBRL format. 2021 is when the energy companies must submit their first forms with XBRL tagging according to the mandate in Q4.
Naturally, questions and concerns are probably making you reel. Not to worry, we can sort it out for you! Here is all you need to know about FERC’s mandate and how you can ensure compliance.
The XBRL requirement specifically impacts certain forms of annual and quarterly forms of electric and public utilities, natural gas, oil companies and centralised service companies. The forms are:
- 3-Q electric
- 3-Q natural gas
Although the time investment is likely to be high initially, almost 90% of the burden will quickly reduce after one year. The only task that will remain is collecting, compiling, and assemble data that goes into each report. The process is made even more comfortable with the help of software from an experienced service provider. Depending on the route you are to take, planning out resources, time, and budget allocation now can help in a big way for the future.
The move from Visual FoxPro to XBRL is going to be unsettling. However, with the reduction in work quantum, the only concept that needs familiarization is the XBRL tagging. We can help break it down for you.
How does tagging work, and who will do it?
Tagging is the process of adopting your unique financial data to an element within a set of pre-defined terms called a taxonomy. This is what gives XBRL its extensibility, as it can be widely adopted and used. Energy companies in the US are already preparing to file their annual returns in this new format. How can you ensure you are not falling behind?
A few routes you can consider:
- Build an in-house XBRL tool: With the potential to turn into a herculean task, this needs ample time and resources to develop and test. With existing projects to complete and deliver and working remotely due to the pandemic, you may want to take a rain-check on this option.
- Partner with an expert: Outsourcing the task of report generation to a company that can supply the resources you may not be able to muster to meet your XBRL requirements may work well. Experience, expertise, and availability during need are some of the critical factors you will need to ensure before choosing your ideal partner.
- Decide to invest in a software solution: When it comes to software, the company behind it is equally important. Their XBRL expertise defines the robustness of their technology solution. Can it help with the entire gamut of data collection, preparation, and reporting? How easy is it to use the software and what is the learning curve with respect to XBRL domain? How effective is the collaborative preparation and review of reports? Understand the ability of the software to automate data collection. Since you will be inputting sensitive data, their safety and security also play a significant role.
XBRL was introduced to cut down on time spent compiling and filing regulatory reports. Nevertheless, it never hurts to have a transparent process and ensure that you are ahead of the game. You can take a call on having one dedicated team doing all the work or call on SMEs to enter their area of reporting using our reporting platform. Several people can also enter data into the draft at once, saving even more time.
Building enough and more cushion into a process flow chart can ensure that all deadlines are met.
Today, we need flexibility like never before. The pandemic has made it imperative for us to plan and be prepared. Collecting data, creating and editing reports, and approvals; has to be done remotely, and facilitating that has to be the principal business decision that you will need to take.
DataTracks, with a presence in 26 countries, has had over 16 years of experience in the field of compliance reporting. Having generated close to 194,000 reports, we have ensured the quality and assurance of proper reporting support at competitive prices. Our data confidentiality and efficient work has earned us 19,400 happy clients.
We have a flagship Data Point Model (DPM) based product, which is extensively used by Insurance companies and Banks in the European Union for preparing their regulatory compliance reports in XBRL. To learn more, and start your compliance journey, send an email to firstname.lastname@example.org