XBRL US supports expanded digital reporting at SEC
XBRL US has submitted a comment letter to the Securities and Exchange Commission (SEC) on changes to its reporting rules, as captured in its proposal on ‘Updated EDGAR Filing Requirements.’
The proposal, which aims aims to improve investor access to information submitted by companies, would mandate electronic submission via the SEC’s Electronic Data Gathering, Analysis, and Retrieval system – or EDGAR – for most reporting where this is currently optional. It also includes a requirement for companies to use Inline XBRL to tag both financial data points and accompanying notes in Form 11-K filings. This form is used to report on employee stock purchases, savings and similar plans.
The letter from XBRL US supports the use of Inline XBRL for Form 11-K, observing that this structured format would render the data more functional. With every public company in the US now accustomed to working with Inline XBRL, “issuers would be able to use many of the same elements already available in the US GAAP Taxonomy and use the same applications they use today to tag their financial statements.” In addition, XBRL US advises the establishment of a mechanism for companies to assign unique identifiers to the various plans reported on Form 11-K, enabling them to reference these in their base financial reports.
XBRL US further suggests that the cover page of Form 6-K, filed by foreign issuers in response to certain triggering events, be tagged using Inline XBRL; this would mirror the somewhat similar Form 8-K used by US-based issuers. It also recommends that the SEC require the tagging of financial content in both Forms 6-K and 8-K to make the data more useful for consumers. One more filing that should be digitally tagged is Subsidiary Listing reported on Exhibit 21. “Understanding business and investment risk associated with a company is not possible without understanding the various subsidiaries of that entity. Providing this important data in structured format would greatly enhance its usefulness,” asserts the letter.
Finally, XBRL US encourages the Commission to conduct a beta program with an appropriate test environment and technical materials prior to implementation of the final rule, to give vendors and issuers sufficient time and instruction to ensure successful compliance. We at XBRL International heartily concur with all these recommendations, and welcome the ongoing broadening of fully digital, structured reporting in the US – and the useful data this brings.
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