Tips for filing detailed footnotes in XBRL: the proliferation of XBRL for financial reporting is reaching another milestone--detailed footnotes. This new process might be daunting, so users should consider these seven pointers to make it trouble-free and more efficient.

Author:Jones, Richard
Position::Financial Reporting - Extensible Business Reporting Language
 
FREE EXCERPT

For companies that have fulfilled their year-one U.S. Securities and Exchange Commission requirement of block-note tagging in extensible Business Reporting Language (XBRL), the second year brings the next major milestone: required filing of detailed footnotes (DFN) in XBRL

Generally, a DFN filing is about two-to-five times the size of a block-note filing with considerably more custom elements. This adds complexity and time to the process of preparing, reviewing and finalizing the XBRL for concurrent filing with EDGAR filing (the Electronic Data-Gathering, Analysis and Retrieval system).

Many companies may have already made adjustments to their financial reporting and approval processes while they implemented the first phases of the XBRL filing requirement. But it still makes sense to review the timeline in light of the increased size and complexity of the submission.

Last-minute changes that can be handled in the print process and even for block-note XBRL tagging become more difficult and protracted with detailed footnotes and can impact a company's ability to file on its expected date. Though perhaps this situation is not favorable to many financial executives, digital reporting is a reality and XBRL is the medium.

The more time invested in learning and planning, the more successful the company will be in making the transition from paper-based to digital financial reporting.

To accomplish the first DFN filing successfully, companies should keep in mind the following: Recognize that XBRL processes differ greatly from HTML production. XBRL is the most significant change in regulatory financial reporting since the implementation of EDGAR in 1984. Consider that, with the HTML EDGAR filings, individuals complete much of the work of validating the financial statements and all the references to specific pieces of data.

With XBRL, the structure of the filing and available validation software enables automated review for completeness, accuracy and consistency. This provides improved data quality and will drive efficiencies in the creation and use of the information, especially as the technology behind XBRL is more widely adopted by companies, financial analysts and investors.

On the other hand, the initial implementation of XBRL for detailed footnotes in SEC financial reporting may add significant time to a company's regulatory reporting processes. It is with the initial implementation that companies and their service providers create the data...

To continue reading

FREE SIGN UP