Global Capital Markets RR Donnelley SEC Hot Topics Interactive Data (XBRL) Prepared and Presented by: Sue Childs, EDGAR Online David Anderman, RR Donnelley Financial Services September 17, 2008
Interactive Data Electronic Applications (IDEA)
XBRL Technology Overview
Summary of SEC Proposed Rule
Data tagging alternatives
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)
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
Key XBRL Terms to Know
Machine-readable “barcode” that gives a standard definition for each line item in an income statement, SCF, or balance sheet
A “dictionary” of tags for:
Specific accounting standards (US GAAP, IFRS)
Industry segments (e.g., energy, REIT’s, Broker-Dealers, Commercial)
Collection of tags that is the building block to viewing and analyzing data
How Does XBRL Work? Financial Statements XBRL-Tagged Financial Statements SEC Consumed by:
Analysts / Research
Investors (corporate & individual)
Newswires / data aggregators
XBRL Taxonomy Tagging Software XBRL-Tagged Financial Statements Scenario 1 RRD EZ Start Scenario 2 XBRL in GL system XBRL-Enabled Financial Reporting Software XBRL Taxonomy Financial Statements Internal External
XBRL in Action
XBRL in Action Mutual Fund viewer on the SEC website to view XBRL for Risk/Return Summaries.
XBRL in Action Fund A Fund B Fund A Fund B Fund Comparison
XBRL Adoption Around the World Expected to be mandated in 75% of the World’s Market Cap by end of 2008 EUROPE Belgium -France – Bank de France, AMF Netherlands -4 Major Ministries Norway - Exchange Spain - Bank of Spain Sweden – Companies House UK – HMRC (Companies House) ASIA/PACIFIC Australia – Government Wide China – Shanghai & Shenzhen Exchanges, CSRC, SFC India – Bombay & India National Exchange, Bank of India Japan – Tokyo Exchange & Bank of Japan Korea – KOSDAQ Singapore - ACRA Thailand – Thailand Exchange MIDDLE EAST/AFRICA Abu Dhabi – Exchange Israel - Securities Authority South Africa - Exchange SOUTH AMERICA Argentina – Bank of Argentina Bolivia - Government-wide Brazil – Bank of Brazil Chile – Bank of Chile Columbia – Bank of Columbia Peru – Bank of Peru NORTH AMERICA Canada – CSA, Toronto Exchange Cayman Islands - CIMA US – FDIC, SEC, IRS World Bank – Micro Lending
XBRL Progression in US SEC gets involved in XBRL 1999 2000 SEC adopts HTML standard FDIC adopts XBRL 2005 2006 XBRL Voluntary Program for ‘ 34 Act filers 2007 XBRL Voluntary Program for ‘ 40 Act filers SEC mandates XBRL 2008 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
SEC Proposed Rules Released – May 30th, 2008 XBRL 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 2 nd 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
SEC Proposed Rules Released – May 30th, 2008 What 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.
SEC Proposed Rules Released – May 30th, 2008 XBRL 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.
SEC Proposed Rules Released – May 30th, 2008 EDGAR 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.
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).
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.
SEC Proposed Rules Released – May 30th, 2008 Liability Framework The Proposed Liability Framework There’s no additional requirement for an auditor attestation or senior officer certification of XBRL data. 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
SEC Proposed Rules Released – Summary of Comments
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)
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
Start with 10-Qs, not 10-Ks
Do not include Registration Statements – too burdensome
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
Alternatives for Tagging Your Data in XBRL Enterprise Solution Integrate the XBRL mapping into your financial reporting system Self Tagging Software Solution Export your financial statements, then use software to assign tags to each line item Full Service Solution Provide your financials to service provider for tagging, then review and validate
Identify XBRL software compatible with your enterprise GL system
Hire firm for enterprise implementation
Train staff on XBRL mapping
Map data at the GL level
Export data for creation of XBRL submission documents
Purchase XBRL tagging software
Output your financial statements
Train staff on XBRL mapping
Select taxonomy, then map each line item to the correct XBRL element