The SEC formally announced the creation of a Voluntary Filing Program in the iXBRL format. Here are the Five Things you should know:
On June 12, 2016, the Security and Exchange Commission (SEC) formally announced a modification to the Interactive Data file Exhibit Requirement in Forms 6-K, 8-K, 10-Q, 10-K, 20-F and 40-F to Facilitate Inline Filing of Tagged Financial Data. The modification permits companies to submit their XBRL data directly into a HyperText Markup Language (HTML) utilizing a format known as Inline XBRL or iXBRL. iXBRL is a technology made freely available by XBRL International. The iXBRL format is widely used in applications world-wide in countries such as the United Kingdom, Australia, Japan, Denmark and Ireland.
In effect, the voluntary filing combines the present two required filing formats, XBRL data and HTML format, into one document. Since 2009, the SEC has required two separate filings, one with interactive data in the XBRL format and a second one in the HTML format. Many companies have struggled to achieve data in the XBRL document that reflect the same information as the HTML format part of the official filing. (See XBRL errors, how can I minimize them?) The main driver behind iXBRL is to eliminate the natural tendency to force the XBRL formatted data to match the presentation of the same data in the HTML format. Although the SEC specifically requests that the tags used within the iXBRL format reflect the same data in the HTML version of the filing, the embedded format of iXBRL should make it easier to achieve this goal.
The SEC took an unprecedented step when announcing iXBRL by skipping the normal public review process and publishing a final rule without public input. Organizations such as the Data Coalition applauded the move but also struck a cautionary note about the lack of public review of the formal rule without public review.
“We have just one criticism of today’s announcement,” said (Hudson) Hollister, executive director of the Data Coalition. “The SEC issued its legal order without first publishing the inline XBRL data structure for review by public companies and the software firms serving them. Instead, the agency issued the order and published the structure at the same time. We hope that in the future, the SEC follows the practices of agencies like the Treasury Department in its DATA Act implementation, and publishes proposed data formats in advance, before the legal directives for their use are issued.” Source; http://www.datacoalition.org/press-releases/sec-announces-voluntary-inline-xbrl-filings-xbrl-will-end-duplicative-regulatory-reporting-but-only-till-2020/
The voluntary rule currently expires on March 30, 2020. This writer expects, however, that after a reasonable period of adjustment, the rule will move from voluntary to mandatory.
The SEC detailed certain conditions for the use of the voluntary format:
Conditions: The company must (a) file an Inline XBRL document as prescribed in the EDGAR Filer Manual; (b) file the Interactive Data File as prescribed in the EDGAR Filer Manual for Inline XBRL filers as an exhibit to the Inline XBRL document; (c) use XBRL tags within the Inline XBRL document that reflect the same information in the corresponding data as the HTML format part of the official filing; (d) state in the exhibit index item referencing the Interactive Data File that the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document; (e) not file in plain text ASCII; and 8 (f) not rely on the hardship exemptions in Rules 201 and 202 of Regulation S-T. By the Commission. Brent J. Fields, Secretary
As mentioned above, many jurisdictions around the globe are using the iXBRL format with success. Most notably, Her Majesty’s revenue and Customs (HMRC) in the United Kingdom is currently collecting tax information from corporations. Beginning in 2011, the HMRC adopted the iXBRL format for the collection of taxes. Touted as the most widely used application of XBRL in the world, the HMRC system currently serves over 1.9 million company filings per year.
The key reasons for success, according to XBRL International’s White paper “Company Reporting in the UK – an XBRL Success Story” are as follows:
“Under Inline XBRL, all XBRL data is contained within ordinary, human-readable files. These files are presented in HTML, the format of the web. This enables a single iXBRL report to operate as both a standard set of accounts which may be viewed on screen or printed, and as a file of XBRL ‘tagged’ data which can be analysed automatically by software. An individual company can thus present its accounts in exactly the way it wishes. No additional mechanisms are required to convert an XBRL filing into a human-readable form, saving complexity and cost.”
Even though iXBRL permits the human eye to read the HTML document while software can also use the same document, there exits the possibility of the tags not representing the intent of the financial statement. Each XBRL tag used in the iXBRL format still needs to be vetted by the financial reporting team to ensure the underlying XBRL tags fully represent the intent of the filing. Charlie Hoffman said it best back in 2011:
The SEC’s movement into the iXBRL world is voluntary through 2020. Given many successful world-wide implementations the long anticipated move will most likely result in a permanent filing format in the near future. Now is the time to begin your company to move to iXBRL.
Here in the USA, DataTracks stands ready to assist you in moving to the voluntary iXBRL reporting. Already participating in the HMRC”s iXBRL program as a recognized vendor ( DTracks Limited), DataTracks has experience helping companies file in the iXBRL format. Our expertise in iXBRL help you move quickly to the voluntary SEC iXBRL filing format.
https://www.sec.gov/structureddata/osd-inline-xbrl.html SEC’s iXBRL Voluntary Program Announcement
https://www.sec.gov/rules/exorders/2016/34-78041.pdf SEC Rule details
About DataTracks: DataTracks US is part of DataTracks Services Limited, leaders worldwide in preparation of financial statements in EDGAR HTML, XBRL and iXBRL formats for filing with regulators. With a track record of over 10 years, DataTracks prepares more than 12,000 XBRL statements annually for filing with regulators such as SEC in the United States, HMRC in the United Kingdom, Revenue in Ireland, ACRA in Singapore and MCA in India.
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