Amid the flurry of news about tariffs, scandals, mergers and trade wars, the SEC quietly adopted rule amendments that will require the implementation of the Inline eXtensible Business Reporting Language (XBRL) format “for the submission of operating company financial statement information and fund risk/return summary information,” according to the SEC.
The amendments are expected “to reduce the likelihood of inconsistencies between HTML and XBRL filings and improve the quality of XBRL data,” according to the regulator. The Inline XBRL “involves embedding XBRL data directly into the filing so that the disclosure document is both human-readable and machine-readable,” SEC officials note.
In addition, the use of the Inline XBRL format “enhances the usability of structured disclosures for investors through greater accessibility and transparency of the data and enhanced capabilities for data users, who would no longer have to view the XBRL data separately from the text of the documents,” according to the SEC.
The SEC is even pushing for the usage of the open source Inline XBRL Viewer “by filers and the public to review and analyze the XBRL data more efficiently,” officials say.
Keeping with the theme of greater efficiency, the SEC is also eliminating the “15 business day filing period for risk/return summary XBRL data, so that the data will be more timely,” according to the amendments.
The amendments will go into effect in phases with large fund groups with net assets of $1 billion or more will have to comply “two years after the effective date of the amendments,” according to the SEC. “All other funds will be required to comply three years after the effective date of the amendments.”
In fact, the SEC is presenting three effective dates for these changes, noting that the current “interactive data file” requirements “will become subject to Inline XBRL requirements beginning with fiscal periods ending on or after:
- June 15, 2019 — large accelerated filers that prepare their financial statements in accordance with U.S. generally accepted accounting principles (U.S. GAAP);
- June 15, 2020 — accelerated filers that prepare their financial statements in accordance with U.S. GAAP; and
- June 15, 2021 — all other filers.”
The SEC is making the case that “Inline XBRL has the potential to benefit investors and other market participants while decreasing, over time, the cost of preparing information for submission to the Commission. The amendments also eliminate the requirements for operating companies and funds to post XBRL data on their websites.”
Overall, while the amendments will move people beyond the XBRL requirements, they “do not change the categories of filers or scope of disclosures subject to XBRL requirements,” the SEC says.
For those brave enough, the full text of the 143-pages of the final rule can be found here.