Out of the Clouds and Into Reality: XBRL for the Business User

SEC Final Rule on XBRL for Operating Companies Now Available

So much for the mystery of whether the XBRL final rule would ever see the light of day...;o)

Today the SEC posted on their web site the final rule on XBRL for operating companies.  The link to the PDF is here and not that I'm telling anyone to skip pages, but the Summary of Adopted Amendments starts on page 20...=).  Hopefully you have a little free time on your hands as the document has grown from 143 pages (proposed rule) to 206 pages (final rule).

Happy reading...and stay tuned for more blog posts on specific aspects of the rule, as well as a Plain English overview of the final rule made available on our main XBRL landing page.

-Rob 

XBRL and the New Administration(s): Trouble Ahead?

How could one not feel at least a bit of (renewed?) pride in this country after watching President Obama's swearing in.  The people...the flags...the pomp...the circumstance...it was all there.  He took the oath, waved goodbye to GW and Mrs. B, and got down to business.  Oh alright, not right away, as he had a few galas to attend, but come Day Two...time to put away the tux and get down to business.

When it comes to XBRL and the new Adminstration (actually Administrations given the revolving door at the SEC), things were already a little up in the air with a new incoming Chair of the SEC (more on that later).  Not a big deal, right, as all the SEC had to do was move their rule making process forward and wrap the XBRL rules up before all this change started happening.  

What's that?  The XBRL rules didn't get finalized before yesterday?  Oh boy...I guess that means the government-wide memo from Obama's Chief of Staff Rahm Emanuel today effectively putting the breaks on all pending regulations comes into play with XBRL.  Although the SEC technically doesn't have to "follow"  a memo such as this (being an independent regulator), they almost always do...which means the final XBRL mandate rules are officially on hold since they had yet to hit the Federal Register.

On a quick digression, what's interesting to me about this is that Christopher Cox's time as Chair is over; he resigned yesterday.  As everyone knows, XBRL was Cox's baby.  He knew his time was short at the SEC and thus I would think have done everything possible to make the final rules official by getting them in the Federal Register BEFORE he left.  The reality is he didn't...or couldn't (Conspiracy Theorist Alert:  Was the holdup inter-agency vs. intra-?)...and now the rules have to wait in line for review by the Obama Administration. 

Adding to this air of XBRL uncertainty is new SEC Chairperson Mary Schapiro.  Although pro-investor and familiar with the turf, she takes over the SEC in a time of crisis with what I'll presume are a number of urgent matters in line ahead of XBRL.  Although it's expected her confirmation as Chairperson could come as soon as next week (Senate Banking Committee testimony coverage here, video here), I bet she'll want to get her new house in order before doing anything too drastic (good or bad) with XBRL.

So, where does this leave XBRL?  Although my crystal ball is a bit cloudy right now (nothing to do with the "I-really-wanted-to-be-at-an-Inaugural-Ball" beverages I had last night), I would tend to lean towards the sentiment expressed by Diane Mueller in her CIO post.  XBRL is a good fit at both the Administration and incoming SEC Chair level, does good for a number of key constituents in this information supply chain, and has even been embraced publicly by many companies (okay...fine...mostly larger ones, but any is better than none, right?).  

The next few weeks will obvioulsly hold the answer to the main question:  Can XBRL survive the storm of change hanging over DC?  I believe it can...and will...and thus my recommendation for all Group 1 companies to stay the course and continue preparing for a June 30th-based mandated XBRL filing.  Anything less would be...well, unpatriotic...=).

--Rob

Did Someone Say Guidance? SEC Releases XBRL Creation Rules...Not Once, but Twice

With all the holiday egg nog finally starting to dissipate, I reflect back on the mandate craziness that happened during the last part of December.  Much of the attention of course was focused on the meeting on December 17th but equally as important were two events that harken back to the mid-80's and the onset of the two-phase commit in the database world.  Although not a direct parallel (came across my SQL Server 4.21 install floppy disks...what can I say..=), the SEC has made it clear that the relative chaos that comprises today's voluntary filings is soon coming to an end.

The first phase of this commit(ment) to validation criteria on XBRL documents was the Public Validation Criteria, comprised of 26 rules that were originally released back in September but never enforced.  Although a good start, more interesting about these rules is that the SEC started validating them ahead of the mandate meeting...and they never really told anyone they were doing this (file at your own risk!).  Quite the surprise as companies filing that week and since found their filings rejected because they were suddenly missing required data (Criteria 2. Document and Entity Information).

The second phase of the commit(ment) came later in the month when the SEC released a draft version of the EDGAR Filing Manual Volume II Version 10.  These validation rules are the hammer to the Public Validation Criteria's nail in both size and depth, comprising over 50 pages and 100+ rules (Section 6, pages 153-206).  Although still in draft form and thus not being used currently to validate XBRL submissions, this (and the Public Validation Criteria to a lesser extent) is a significant move by the SEC. During the Voluntary Program it's been all open arms and welcomes. This marks the first time the SEC has provided detailed guidance on the preparation, submission and validation of XBRL data.

Given its in-your-face blend of heavy technical geekspeak intermixed with business reporting concepts, the time is now for anyone involved with SEC XBRL filings to begin digesting the draft rules.  Companies considering whether to tag themselves or outsource the effort should evalutate the difficulty in absorbing, implementing and keeping current with the requirements (trust me...the SEC is certain to revise these criteria) as well as making sure any vendors they choose can do the work correctly.

I've often been asked if the SEC has ever provided any rules of the road. Well, here they are...read 'em and weep.  No resting on the laurels of previous XBRL filings...play time is offically over.

R*Ed