The Securities and Exchange Commission voted on June 28, 2018, to adopt amendments to eXtensible Business Reporting Language (XBRL) requirements for operating companies and funds. The amendments are intended to improve the quality and accessibility of XBRL data.
The amendments, which will go into effect in phases, require the use of Inline XBRL for financial statement information and risk/return summaries. Inline XBRL has the potential to benefit investors and other market participants while decreasing, over time, the cost of preparing information for submission to the Commission. The amendments also eliminate the requirements for operating companies and funds to post XBRL data on their websites.
“The amendments are part of the Commission’s continued efforts to modernize reporting and to improve the accessibility and usefulness of disclosures to investors, including our Main Street investors. The Commission will continue to monitor industry practices and market developments in disclosure technologies and ensure our rules adapt with the times,” said Chairman Jay Clayton. “The amendments reflect the Commission’s effort to use developments in structured disclosure technology to lower costs borne by filers and investors. I want to particularly thank Commissioners Stein and Piwowar who, over their tenures and in the interests of investor protection and efficient markets, have worked to ensure that information can be disseminated more quickly and more broadly through many historic and new channels.”
The amendments require the use of the Inline eXtensible Business Reporting Language (“XBRL”) format for the submission of operating company financial statement information and fund risk/return summary information and make related changes. Inline XBRL involves embedding XBRL data directly into the filing so that the disclosure document is both human-readable and machine-readable.
The amendments are intended to improve the data’s usefulness, timeliness, and quality, benefiting investors, other market participants, and other data users. The amendments are also intended to decrease, over time, the cost of preparing the data for submission to the Commission.
While the amendments modify existing XBRL requirements, they do not change the categories of filers or scope of disclosures subject to XBRL requirements.
Inline XBRL for operating companies
- Operating companies that are currently required to submit financial statement information in XBRL will be required, on a phased basis, to transition to Inline XBRL.
- Large accelerated filers that use U.S. GAAP will be required to comply beginning with fiscal periods ending on or after June 15, 2019.
- Accelerated filers that use U.S. GAAP will be required to comply beginning with fiscal periods ending on or after June 15, 2020.
- All other filers will be required to comply beginning with fiscal periods ending on or after June 15, 2021.
- Filers will be required to comply beginning with their first Form 10-Q filed for a fiscal period ending on or after the applicable compliance date.
Inline XBRL for funds
- Funds that are currently required to submit risk/return summary information in XBRL will be required, on a phased basis, to transition to Inline XBRL.
- The amendments also eliminate the 15 business day filing period for risk/return summary XBRL data, so that the data will be more timely available to the public.
- Large fund groups (net assets of $1 billion or more as of the end of their most recent fiscal year) will be required to comply two years after the effective date of the amendments.
- All other funds will be required to comply three years after the effective date of the amendments.
Website posting requirement elimination
- The requirement for operating companies and funds to post XBRL data on their websites will be eliminated upon the effective date of the amendments.
Benefits of the Inline XBRL Technology
- Among the potential benefits, Inline XBRL:
- Is expected to reduce, over time, XBRL preparation time and effort by eliminating duplication and facilitating the review of XBRL data.
- Gives the preparer full control over the presentation of XBRL disclosures within the HTML filing.
- Is expected to reduce the likelihood of inconsistencies between HTML and XBRL filings and improve the quality of XBRL data.
- Enhances the usability of structured disclosures for investors through greater accessibility and transparency of the data and enhanced capabilities for data users, who would no longer have to view the XBRL data separately from the text of the documents.
- In addition, tools like the open source Inline XBRL Viewer (more information; download) can be used by filers and the public to review and analyze the XBRL data more efficiently.
- For fund investors, the benefits of Inline XBRL are expected to be enhanced by the more timely availability of risk/return summary XBRL data due to the elimination of the 15 business day XBRL filing period.
- For funds, the amendments also will facilitate efficiencies in the filing process by permitting the concurrent submission of XBRL data files with certain post-effective amendment filings.
This post comes to us from the U.S. Securities and Exchange Commission. It is based on the commission’s press release, “SEC Adopts Inline XBRL for Tagged Data,” dated June 28, 2018, and available here.