What is XBRL?

XBRL stands for eXtensible Business Reporting Language. It is a new format to present financial reports over the Internet. XBRL makes the data in financial statements readily comparable and quicker to analyze for shareholders, investors, and analysts.

What are the compliance dates?

Depending on this size of your company, the SEC is requiring that financial data be reported in the XBRL format within one to three years. The following are the XBRL filing requirements:

• If your company is a Domestic or Foreign Large Accelerated Filers that uses U.S. GAAP and has a worldwide public common equity float above $5 billion as of the end of the second fiscal quarter of the most recently completed fiscal year, your company is required to file your quarterly or annual financial statements for fiscal periods ending on or after June 15, 2009 in XBRL.
   
• All Other Large Accelerated Filers must comply for their quarterly or annual financial statements for fiscal periods ending on or after June 15, 2010.
   
• All Remaining Filers, including smaller reporting companies, using U.S. GAAP must comply for their quarterly or annual financial statements for fiscal periods ending on or after June 15, 2011.
   
• Foreign Private Issuers with financial statements prepared in accordance with IFRS as issued by the IASB are required to comply for their annual reports on Form 20–F or Form 40–F for fiscal periods ending on or after June 15, 2011.

What are the costs and benefits of XBRL?

The costs your company will incur for XBRL adoption may include the following: internal employee costs for designing the approach and requirements, software, training, IT support and maintenance, potential third-party preparer services (ie, outsourcing), and potential third-party review services (if not outsourced).

Of course, XBRL is a requirement; however, there are some benefits too. XBRL will make financial statements more user friendly for exchanging data over the Internet. Data comparison and analysis will be more automated, cutting out time-consuming and costly re-entry of financial figures into financial analysis tools. Also, software can automatically validate data, highlighting errors and gaps to be addressed. Automating these processes provides cost and time savings. More time will be required for each report type template setup; although, subsequent reports can be completed much faster.

What steps do we need to take?

There are three primary steps: 1) learn the XBRL requirements and guidance, 2) design an approach to comply with the SEC’s requirements, and 3) execute the creation, review, approval, and submission of XBRL reporting documents. The following are some additional items you may want to consider:

• Involve the Information Technology department in the selection, implementation, maintenance, support and use of the tool
   
• Look for XBRL tagging software with additional tools like analytics or creating reports for internal use
   
• Remember to establish controls around the new reporting process and IT controls for the new software

Where can I go for more resources?

The following websites are authoritative and helpful:

• XBRL International – In-depth explanation of XBRL, including technical information
  http://www.xbrl.org/

• SEC Website – See the URL below for the full published mandate
  Rule: 33-9002, Interactive Data to Improve Financial Reporting
  Released on Jan. 30, 2009
  http://www.sec.gov/rules/final.shtml