Written by Peter Boritz     Posted on December 3, 2009

Peter Boritz is the architect and chief technical officer for Snappy Reports XBRL and can be reached via e-mail.

This is the first installment of a four-part series on filing XBRL statements with the SEC.
 
The SEC has adopted interactive data for financial reporting, and the largest US companies began submitting XBRL statements this year. But creating XBRL filings that pass muster with the SEC can be a complex process. Despite the best of intentions and the easiest to use XBRL software, the road to filing can be bumpier than expected. A filing:

• Must be complete and accurate
• Must include both disclosures and financial data and possibly be detail tagged
• Be syntactically XBRL correct
• Pass a consistency check
• Pass best practices verification
• Be properly mapped from an accounting perspective
• Be quality controlled. The contents of XBRL documents must be viewed and compared against paper filings for completeness and accuracy.
• Be presentable in the Interactive Financial Report Viewer
• Include all required document entity information in its proper format
• Include report templates for public viewing
• Include proper import, namespace, and decimal declarations
• Optimally, be able to provide an audit trail of who did what and when and why for internal audit and SOX compliance

Filings can be managed in-house or outsourced. In-house provides you with more security and control, but it requires staff time and training. Although outsourcing makes life easier, you still share the responsibility of working with your provider to be sure your filing is complete and accurate.

Guidance for filings is designated by the EDGAR Filer Manual (EFM) published by the SEC, which elaborates in great deal the requirements of a proper filing. Preparing an XBRL filing requires a combination of professional reporting skills and XBRL technical skills. A good software product should keep the XBRL technical skill requirements to a minimum.

A comment was once made to me that XBRL clients do not want to think. I’m sorry. Thinking is a requirement for any XBRL filing. Careful consideration must be made not only to the mapping, but also the general layout of the filing and when to extend elements. And being able to complete a filing and pass an XBRL syntax check puts you only at the beginning of the starting line. Your filing will be checked for best practices and may be rejected if it’s not.

Notably, the SEC requires that your XBRL presentation be as close to identical to your paper filing as possible. Your filing must be displayable — proper presentation is important. In my next post, I’ll discuss making your data displayable in the SEC’s Interactive Financial Report Viewer.  

Add to Del.icio.us | Digg this

This entry was posted on Thursday, December 3rd, 2009 at 12:15 pm and is filed under General, . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.