With compliance dates approaching, reviewing the SEC’s mandate for operating companies and funds that they report their financial information in Inline XBRL (iXBRL) is important. These requirements date back to June 2018, when the SEC passed rules seeking to modernize and simplify financial reporting for these filers. Unlike traditional XBRL which produces a XML document containing only tagged, structured data that is difficult for a human reader to understand and interpret, iXBRL involves embedding XBRL data directly into an HTML filing so that the disclosure document is both human-readable as a formatted report of financial information and machine-readable since the tagged data can be collected and used in subsequent analyses in any number of ways. Using iXBRL improves the data’s usefulness, timeliness, and quality, which benefits investors, regulators, market participants, and other data consumers. Inline XBRL also reduces burdens and complexity to registrants and preparers as only one document containing both the formatted report and the structured data must be produced.
Monday, June 17. 2019
These important changes apply to fund financial statement information and fund risk/return summary information. While the amendments altered existing XBRL reporting requirements, they do not change the categories of filers or the scope of disclosures subject to XBRL requirements. Specifically:
Operating Companies currently required to submit financial statement reports in XBRL will be required to transition to iXBRL as per the following phase-in:
- Large accelerated filers that use US-GAAP must comply beginning with fiscal periods ending on or after June 15, 2019
- Accelerated filers that use US-GAAP must comply beginning with fiscal periods ending on or after June 15, 2020
- All other filers must comply beginning with fiscal periods ending on or after June 15, 2021
Filers will be required to comply starting with their first Form 10-Q filed for a fiscal period ending on or after their applicable compliance date.
Funds currently required to submit risk/return summary information in XBRL will be required to transition to iXBRL as per the following phase-in:
- Large fund groups (net assets of $1 billion or more as of the end of their most recent fiscal year) must comply on September 17, 2020
- All other fund groups must comply on September 17, 2021
The changes also eliminate the 15 business day filing period for risk/return summary XBRL data to make the data available to the public in a more timely manner.
The following information that was recently discussed by SEC staff may also be pertinent to review:
- In terms of data points within bar charts or other graphical presentations, tags that would be in the chart should be placed in the hidden section. The data may or may not be tied to an image.
- There are sample registration statement amendments (485BPOS) and samples of supplements (497) available in an anonymized N-1A filing summary on the SEC’s website. This demonstrates what information must be tagged and what information should not be tagged.
- The current EDGAR Filer Manual and Preparer’s Guide remains applicable in terms of the Risk/Return technical specification. There will be no new Risk/Return Taxonomy for the transition to iXBRL.
- The process of aggregating information from multiple sources to a single format for iXBRL is very similar to how funds currently perform this task with HTML for EDGAR.
- There are multiple ways to preview the iXBRL document, including the SEC EDGAR renderer through the Arelle GUI. These previewers will make bar charts viewable as well.
- The SEC will not make changes to the linkbases, including the calculation linkbase. However, XBRL International now has a proposal available for Calc Linkbase 2, which should address issues that arise in financial statements.
- The EDGAR System already accepts test filings for risk/return submissions in iXBRL.
- The merge functionality process, as documented at the end of the Preparer’s Guide, has not been changed. The merge process is based only on the data, not the XBRL presentation.
- The SEC is aware of the potential conflict between redlining (tracked changes) and inline tagged HTML and is working on a method to resolve the issue before the compliance date for Mutual Funds.
- The filer may continue to use Table TextBlock elements and associated embedded text but as hidden items. They are no longer necessary with the transition to iXBRL.
As part of these changes, the requirement for operating companies and funds to post XBRL data on their websites was also eliminated.
Further updates during the transition period to iXBRL will be covered as they arise.