XBRL US on the value of digital reporting and the Interactive Data rule
XBRL US has written to the Securities and Exchange Commission (SEC) in response to its recent consultation on the extension of its Interactive Data rule. This rule underpins digital reporting to the SEC, requiring issuers to file financial reports in XBRL, and also to post this data on their websites. While the SEC proposes to continue XBRL data collection, it sought feedback on the value of this data, reporting burdens and how to minimise them, and how the quality, utility and clarity of the information collected might be improved.
“We support the continued collection of data in interactive (XBRL) format as the XBRL standard renders data fully machine-readable and searchable, enables the commingling of data sets to make data interoperable, and reduces the cost of reporting and data collection for preparers, the Commission, and for investors and other data users,” says XBRL US. Digital data is not only of decision-making value for investors and analysts, but also for the SEC itself: two recent proposals, for example, will help it to monitor and respond quickly to cybersecurity threats, and to calculate filing fees more efficiently.
XBRL US also supports the Commission’s approach to incorporating validation rules into its EDGAR submission process to enhance data quality and accuracy. The Financial Accounting Standards Board (FASB) has begun incorporating rules developed by the XBRL US Data Quality Committee (DQC) into a DQC Rules Taxonomy (DQCRT). “We have seen an increase in the quality and consistency of filings with the incorporation of these rules into the EDGAR system,” says XBRL US, arguing that this improvement will continue as more DQC rules are adopted.
Finally, XBRL US encourages the SEC to consider the use of the xBRL-CSV format in future rules. “This specification is especially useful when large volumes of data are reported and where use of the data will be mostly computer-to-computer,” it states. In these circumstances, it is a better alternative to custom XML schemas, being less expensive to implement and easier to update and allowing for more robust validation.