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XBRL and the SEC: What You Need to Know

June 18, 2009
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The SEC is making an effort to assist companies and preparers as they try to comply with the new rules that require financial reports to be filed using XBRL. The SEC staff has posted frequently asked questions about its interactive data program (SEC terminology for XBRL). The FAQs represents the views of the staff of the Office of Interactive Disclosure.

The Division of Corporate Finance staff also posted Compliance and Disclosure Interpretations related to the Interactive Data rule. In addition to these aids, now would be a good time to read (or re-read) the original XBRL rule (33-9002) to be certain that all of the nuances in the rules are understood. That was the advice of SEC staffers at a June 10 public seminar on XBRL.

“To the extent that lawyers have been deferring reading the release, now is probably a good time to start,” Tom Kim, chief counsel in the SEC’s Division of Corporation Finance, told attendees at the June 10 public seminar. He also stated that the rules have “a lot of bells and whistles.”

Kim discussed some of the nuances of the XBRL mandate that may create confusion. For instance, interactive data exhibits are required for Securities Act registration statements that contain financial statements and a price or a price range, but they are not required for initial public offerings. Additionally, the term “disclosure controls and procedures” in Item 307 of Regulation S-K includes the controls applicable to the filing of XBRL exhibits in periodic reports, but that phrase is not deemed to cover any controls with respect to the filing of interactive data file exhibits for the officer certifications under Section 302 of Sarbanes-Oxley. According to Kim, that distinction is described in the adopting release, “but is not intuitive.”

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