SEC Updates it’s Interactive Data Test Suite – How Will it Affect EDGAR and XBRL/iXBRL Quality?
On a global level, XBRL/iXBRL has revolutionized timeliness, accessibility and comparability in financial reporting. Nevertheless, there are challenges involved in using XBRL data. There is a widespread quality issue that includes numeric values being entered as negative when they should be positive and vice versa, lack of completeness, inconsistency, and use of custom elements in place of standard taxonomy elements; that reduces comparability and results in the inaccuracy of data. Filers have to take ownership of providing the correct interactive reports as they are used by regulators, investors, consultants, auditors and academicians. The lack of accuracy can lead to legal, professional, reputational, as well as regulatory risks.
The Solution Offered by SEC
With the increasing number of software solutions for the creation of XBRL reports, the Security and Exchange Commission (SEC) recognized the need for a test suite for Interactive reports validation. With that in mind, the SEC Introduced the Interactive Data Test Suite. The purpose of this test suite is to assist filers using XBRL software to validate Interactive Data before its submission to SEC. The test suite consists of several small Interactive Data instances, schemas, and link bases that can be checked with multiple iterations before submission and the data test suite allows us to run a validation check to confirm whether there is a violation. Registrants are encouraged to use this new upgrade to timely identify potential errors so that they can be validated before final submission to EDGAR.
SEC Upgrades the Interactive Data Test Suite
As per the latest announcement, SEC has upgraded the Interactive data test suite to include texts that use the recent US GAAP, SEC reporting, document and entity information. The major change is the removal of the Investment schedule (INVEST) taxonomy from the interactive data test suite. The INVEST taxonomies were intended to be put into use in the voluntary filing program, but that has ended because the filers using these taxonomies received validation warning messages from SEC.
The use of a public test suite will help filers to identify all the red-flag with interactive data errors before final submission. Thus assisting filers in identifying and cross-verify every single data entry and make necessary revisions – that means highly accurate data for every financial filing. The up-gradation of the interactive public data test suite is another step in the pursuit of error-free XBRL/iXBRL reporting.
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