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SEC Staff Briefing:SEC Staff Briefing:The Roll-out of Interactive Data Reporting The Roll-out of Interactive Data Reporting for US-listed Public Companiesfor US-listed Public Companies
David M. Blaszkowsky,
Director, Office of Interactive Disclosure
XBRL Canada Conference
Toronto
5 November 2009
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DisclaimerDisclaimer
As a matter of policy, the Securities and Exchange Commission disclaims responsibility for the private statements of SEC employees. The views I am expressing today are solely my own, and do not reflect the views of the Commission, the Commissioners, or of any employees other than myself.
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Interactive Data / XBRL: Interactive Data / XBRL: “News From the Front”“News From the Front”
Mandate started 15 June – How is it working? First Reporting period in XBRL went well
>500 filings, >10 percent are Phase II/III “early” filers First detail-tagged, first 10K submissions Includes Canadian, other foreign private issuers
Companies can tag successfully Modest cost, modest time Learning curve: Most frequent problems are the most basic,
easiest “Best practices” starting Benefits of a large, comprehensive taxonomy
“User-side” awakening Investor applications emerging Investor interest increasing
Concerns about detailed footnote tagging Staff are reviewing XBRL exhibits for technical quality, tag choice, etc.
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““Interactive Data” Add Structure and Interactive Data” Add Structure and Meaning to Filed Financial DisclosuresMeaning to Filed Financial Disclosures
Mapping
Label: Net SalesTag: NetSalesMetadata: - Currency
- Year- Amount- Scenario- Value
Tagging
OR: an “Extension”
Footnotes (Block, Detailed)
US-GAAP: List of Tags
P&L
B-S
“Taxonomy”
Footnotes
Flows
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Why is Interactive Data Important for Why is Interactive Data Important for Company Information?Company Information?
Filers/Corporations Process improvements and
savings
Easier/Faster compliance
Better communication, visibility to investors Especially for mid/small-
caps
Buy-side “Faster, cheaper, better”
As-reported, and complete
No introduced errors
More useful, more functionality
Higher analysis/analyst productivity
Improved comparability
Improved Market Efficiency
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Public Company Reporting Using Public Company Reporting Using Interactive DataInteractive Data
What will be required
Who and when
Important additional features
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What Will Be RequiredWhat Will Be Required
Content: Primary financial statements (IS, BS, etc.) Footnotes Financial statement schedules. Certain company identifier information (“DEI”)
Forms Periodic Reports (10Q, 10K, 20F, 40F) Transition Reports Reports on Forms 8-K and 6-K with revised audited versions of
financial statements Securities Act registration statements (S-1, S-3, S-4, S-11, F-1, F-3,
F-4, F-9, F-10) Not IPOs
Interactive data requirements are provided as an exhibit “Disclosure Neutrality”
Posting to the Filer’s website, if it has one, same business day, for at least 12 months
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Year 1 Year 2
Filer Group
Domestic/Foreign Large
Accelerated Filers Using US GAAP
• Public Float >$5 billion
• All other Large/Accelerated Filers
All other Filers in US GAAP
(including smaller reporting companies)
All Issuers using IFRS as published by the IASB
Phase-in SchedulePhase-in Schedule
Who?
What?
• Face Financials: All facts
• Footnotes: Block tag each footnote
• Schedules: Block tag each schedule
• All from first year• Footnotes:
• Each significant accounting policy
• Block tag each table• Tag each amount
• Schedules: Tag each amount
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Year 1 Year 2
Filer Group Begin with the first 10Q (or annual, for 20F/40F filers)
for periods ending after 15 June
Domestic/Foreign Large
Accelerated Filers Using US GAAP
• Public Float >$5 billion 20092009 20102010• All other Large/Accelerated
Filers 20102010 20112011
All other Filers in US GAAP
(including smaller reporting companies)
20112011 20122012
All foreign private issuers using IFRS as published by the IASB 20112011 20122012
Phase-in SchedulePhase-in Schedule
When?
Who?
30 day grace period, from the filing date of the related report, for the initial submission (by amendment) of interactive data exhibit
30 day grace period, from the filing date of the related report, for the initial submission (by amendment) of interactive data exhibit
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Data reliability and non-complianceData reliability and non-compliance
Data in the interactive data file submitted will be subject to a limited liability
Subject to specified anti-fraud provisions except in connection with a failure to comply with the tagging requirements that occurs despite a good faith attempt to comply and is corrected promptly after the filer becomes aware of the failure
Limited liability provision phase-out: Over a two-year period for each company. Provision would terminate completely on October 31, 2014.
Interactive data files will be excluded from the officer certification requirements under the Exchange Act rules
No requirement of auditor assurance on their interactive data exhibits
Filers that do not provide or post required interactive data on the date required will be deemed not current with their Exchange Act reports “Curable” by providing/posting the interactive data file
SEC Interactive Data Previewer, and automated validations are helpful
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Thank You! Part 1…Thank You! Part 1…
Contact Information for Questions [email protected]
202-551-4144
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Feedback and Findings Feedback and Findings From Filings to DateFrom Filings to Date
Extensions Check to ensure against unnecessary extensions
Recheck the taxonomy to make sure that a tag doesn’t already exist
Don’t create a new tag if a standard tag exists Tag choices could be questioned by staff or by the
marketplace
If extending, include definition for monetary elements, and describe whether it has debit/credit attribute
Negative values vs. negated labels: understand the element and its definition Taxonomy designed so that most elements have a positive
value
Tags versus labels…
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Feedback and Findings Feedback and Findings From Filings to Date(2)From Filings to Date(2)
Labels: Make sure the labels match those of the traditional (HTML) document exactly
“Sales” vs. “Turnover”: Same tag, different label
Labels can be extended without creating a new tag
Use the pre-viewer to compare and check!
Rendering aesthetics vs. tagging integrity
XBRL is dependent on the integrity of the tags
Focus on the accuracy of the tags, not the visual appearance of the rendering
Make sure element labels match line item captions
Some differences cannot be avoided, e.g. indenting, fonts, underlining, total/subtotal captions, brackets (on SSE)
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Feedback and Findings Feedback and Findings From Filings to Date(3)From Filings to Date(3)
Management review is prudent
Senior management should have an opportunity to review
Even if tagging is outsourced, they are still your financials and tags
Remember: Voluntary Filing Program is closed for most public filers
Public companies can only submit required filings
VFP only open for Article 6 and for mutual funds
FPIs: IFRS filings cannot be provided yet
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Feedback and Findings Feedback and Findings From Filings to Date(4)From Filings to Date(4)
Finally – Looking to make the Interactive Data roll-out effective and
smooth
Check regularly for SEC staff comments and FAQs
Look for additional public information seminars Archive of 10 June 2009 event
http://www.connectlive.com/events/secinteractivedata061009/
Reprise for the next phase of filers, and for footnotes
Communicating with companies: web, phone, podcasts, other media as appropriate
Best practices will emerge
Above all: Start early! Whether for phase 2 , or for footnotes!