Is Your Company Ready for XBRL Tagging, Filing?

Lora Bentley

Other than acknowledging that the Securities and Exchange Commission has proposed a mandatory XBRL filing rule for reporting companies, and then outlining the compliance deadlines for that rule, the tech press hasn't said much about what that rule will require. So when a client alert on the proprosed rule from the law firm of White & Case hit my inbox Thursday, I paid attention.

The alert, written by firm partner Colin Diamond, not only lists the various compliance deadlines for the new rule, it also lays out the SEC estimates of additional time required to meet them in the first year and then in subsequent years, and addresses the different options companies have for achieving compliance. Here are a few highlights:

  • The XBRL filing requirement does not replace the existing filing requirements, so companies must still use EDGAR to file in HTML or ASCII format, and then also file in XBRL.
  • The requirement applies to Securities Act registration statements and Exchange Act reports.
  • The largest accelerated filers -- with a common equity float above $5 billion -- have the first deadline, for statements addressing fiscal periods that end on or after December 15 of this year.

Companies subject to the rule can go about achieving compliance in a couple of different ways, Diamond told me in a recent interview


[I]f you look at the SEC survey against other surveys that have been done -- in particular, one by Merrill Corp., the financial printer - the estimated amounts of time seem to vary significantly between those companies that are doing the tagging in house and those that are outsourcing it. Not surprisingly, the amount of time is significantly higher for those that are choosing to do the tagging in house....


...[I]n the survey by Merrill of the limited number of companies that have done this, the split between doing it in house or outsourcing it was approximately 50-50. And there's a certain percentage in the middle that did a combination of both approaches.

The determining factor between in-house tagging and outsourced tagging, at this point, it seems, is cost. Diamond continues:

[T]hey're going to have to measure the in house cost. It may not be an out of pocket cost, but there's going to be a cost in terms of time and resources... Do they have the resources internally to devote to learning how to tag and to going through that exercise? It's not overwhelming, but it's clearly hundreds of hours, most likely, for the first time they're going to do this.

The takeaway: Even if you're not the largest of accelerated filers, start preparing now. The more you know before you have to comply, the better off you will be.

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Add Comment      Leave a comment on this blog post
Dec 17, 2009 10:39 AM Janet B Janet B  says:

It looks like some of these issues you are encountering when your file could be solved by using software to keep track of your files. You can try The Paper Tiger Filing System to help you better keep track of your files. Give it a try! We are a BBB A-Rated business and are always looking for ways to help people file!


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