Bringing XBRL in-house--a trend?

• Author: Sinnett, William M.
• Position: TECH STRATEGY

For publicly held companies that file reports with the U.S. Securities and Exchange Commission, the final financial statements must be tagged using extensible Business Reporting Language (XBRL). This tagging process thus becomes part of financial statement production.

In many companies, this production is a loosely controlled process, in which a number of different players us a variety of documents and spreadsheets, providing the opportunity for error, inconsistency and inflated costs.

The most significant XBRL reporting requirements involve quarterly and annual reports to the SEC on Forms 10-Qand 10-K.

In their first year of compliance, companies must detail-tag their face financial statements and block-tag their footnotes.

In the second year of compliance, detail tagging of face financial statements and footnotes is required, would can be much more challenging.

Status of Compliance with Tag-ging Requirements

To find out how companies are complying with these XBRL tagging requirements, Financial Executives Research Foundation, the research affiliate of Financial Executives International, has partnered with the SEC Professionals Group to survey members of FEI and SEC Professionals Group.

The SEC Professionals Group was formed in late 2008 as a project of the Silicon Valley Chapter of FEI; it has grown to more than 1,600 individual members from 1,000 companies.

Survey participants were asked a number of questions, including:

* The size and composition of the financial reporting team;

* The nature of the financial reporting process, including the use of non-GAAP measures, and the participation of the team in the earnings release process;

* The time and effort required to close the books and complete the financial reports;

* The team's level of understanding and involvement in the XBRL tagging process;

* The approach the organization took to implement an XBRL solution--whether outsourced completely, employing a separate, stand-alone XBRL software application, or implementing an application that fully integrates XBRL into the financial reporting process; and

* Whether their XBRL tagging process would change next year.

Responses were classified by SEC filing status and SBRL filing status: SEC Filing Status:

* Large accelerated filer (public float of $700 million or more).

* Accelerated filer (public float between $75 million and $700 million)

* Non-accelerated filer (public float less than $75 million).

XBRL Filing Status:

* Tier 1 companies...