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SEC Adopts Voluntary XBRL Financial Reporting
The SEC last week adopted rule amendments to permit registrants to voluntarily file tagged financial information using eXtensible Business Reporting Language as exhibits to EDGAR filings. The voluntary filers must continue to file their financial information in HTML or ASCII. Their supplemental submissions will enable the SEC to evaluate the usefulness of data tagging and XBRL to registrants, investors, the SEC and the marketplace (Rel. No. 33-8529, February 3, 2005). The rule amendments are effective March 16, the date by which accelerated filers with December 31 fiscal year-ends are required to file their Forms 10-K.
The voluntary XBRL program will permit any registrant to participate and will be publicly available. The XBRL exhibits will be considered furnished rather than filed, and will not be considered the official version of a filing. The final rules include a number of changes from the proposal in response to comment letters. The SEC also noted that it is in the preliminary stages of testing XBRL and may amend the voluntary program to reflect changes in technology and its experience with the program.
XBRL documents must be described as either unaudited, or for quarterly financial statements, unreviewed. They must contain cautionary language advising that the material is used to test the format and technology and should not be relied upon in making investment decisions. If a Form 6-K or 8-K is filed to submit an XBRL document as an exhibit and it presents information related to financial information filed as part of a different filing, the registrant must refer to the official filing from which the XBRL data was taken.
There is no submission deadline for furnishing XBRL data. The SEC was concerned that registrants would be discouraged from participating in the voluntary program if they faced deadlines for submission. In addition, the SEC decided not to mandate the inclusion of notes to financial statements in XBRL documents. However, if volunteers choose to tag the notes to the financial statements in their XBRL documents, they must tag all of the notes. Partial financial presentations are not allowed in XBRL submissions.
Volunteers may present, among other information, earnings reports, MD&A, management's discussion of fund performance, financial highlights, management accounting reports and certifications in XBRL format.
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