So now the hard work really begins. The SEC’s decision today to require
registrants (ie: companies with listed securities) to start filing their
financial statements in XBRL format is pretty similar to the proposed rule
announced in the middle of the year. As widely expected, there is a slip in the
timing. It will start for company filings (quarterly or annual) as from 15 June
2009, ie: 2009-Q2 10Qs instead of the larger and harder 2008-Q4 10Ks as
originally anticipated. They’ve also pushed back the timing for the roughly
8,000 mutual fund risk/return summaries to 1 January 2011, instead of the
middle of 2009.
The Commission is not unanimous on the liability arrangements. Commissioner
Aguilar is voting against the entire proposal because he wants the liability
and the assurance arrangements contained in the proposals greatly
For what it’s worth, I think that the liability carve-out arrangements are an
attempt to ease the transition costs – the change management involved in a
complex new technology – and the SEC (particularly the Chairman) are relying
on new SEC leadership to reinstate them. We need to wait for the final rule to
see the details, but there appears to be a phase-in arrangement for liability
(and therefore assurance) in any event. This should be a relief for a lot of
Commissioner Aguilar is pointing out that the current economic climate is the
exact moment at which the regulator could simply reject the need for a
carve-out. Since the requirements for audited financial statements in ASCII or
HTML are not going away, and the liability and assurance arrangements for them
remain, I suspect the issue is almost moot.
However, I think, from an accuracy and consistency perspective, we should be
looking for XBRL filings to be in iXBRL (embedded inside web pages) format.
This should happen very quickly and at that point, the liability arrangements
must be uniform. Cox seems to have made this point, right at the end of
A number of the other details will be in the rule. Final SEC rules tend to be
published a week or so after these open meetings. Stay tuned.
I think this decision today is much bigger than most people realise. Thanks and
congratulations to the SEC, particularly Paul Wilkinson, Jeff Naumann, David Blaszkowsky and (more recently) Walter Hamscher, all those involved in the US
GAAP XBRL taxonomy project at XBRL US under Mark Bolgiano and Campbell Pryde,
as well as the extraordinary international collaboration that XBRL continues to
represent, especially at XBRL International.