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