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Kimberly Earle, an Associate Chief Accountant in the SEC’s Office of Interactive Data (OID), Lou Matherne Chief of Taxonomy Development, FASB, and other members of FASB’s XBRL team will discuss “current XBRL filing issues,” in addition to the FASB staff’s focus on the changes to the proposed 2015 U.S. GAAP Taxonomy.
Given the recent attention to XBRL filing error rates (XBRL-US table; SEC’s July 2014 ‘Dear CFO letter’), and custom tagging rates (SEC staff report, July 7, 2014), the SEC staffer’s comments on Tuesday’s Taxonomy webcast should be an interesting part of the program.
Beyond that, there may be a distinct advantage to familiarizing yourself with the latest version of the upcoming draft taxonomy, if your goal is to minimize SEC filing errors.
Based on FEI Daily’s email exchange with FASB's Matherne, it would seem to make sense to begin implementation planning with the ‘draft proposed’ taxonomy, since significant changes in the final taxonomy are relatively rare.
FEI Daily:
Are the draft proposed U.S. GAAP taxonomies generally finalized close to year-end or the start of the new year, such that there is a relatively short time period for issuers to ‘get up to speed’ on them, once finalized?
Matherne:
Issuers can review and comment on proposed changes year-round using the FASB’s Taxonomy Online Review and Commenting System. However, the optimal window to provide comments on the following year’s proposed Taxonomy Update is during our 60-day comment period, which begins at the end of August and runs through October 31 of each year.
This 60-day period is the ‘sweet spot’ for our stakeholders to become familiar with the proposed changes, particularly because it is accompanied with detailed release notes, and also because we make every effort to have this proposed Taxonomy as the final. That is not to say there aren’t changes after the proposed Taxonomy is posted, but at that point, we only make changes for critical errors and new Accounting Standards Updates that are finalized late in the year.
Each annual Update technically is not final until the SEC accepts it for use. Generally, the SEC approves it sometime after December, during the first half of the new year. As I mentioned earlier, all changes we make to the Taxonomy are exposed throughout the year and are available for review and comment in the Development Taxonomy.
FEI Daily:
Are there generally few changes in the final vs. proposed GAAP taxonomies issued by FASB?
Matherne:
We encourage issuers to familiarize themselves with the proposed Taxonomy during the annual comment period. All changes in the proposed Taxonomy are easy to identify using the shared search function in our Taxonomy Online Review and Commenting Tool, which contains Release Notes that describe the changes both narratively and in a detailed spreadsheet. You can see these here.
FEI Daily:
Any other comment you wish to make to the preparer community in particular for FEI Daily?
The number of changes made to the annual Taxonomy release based on observed common reporting practices and efforts to improve its overall quality has dropped dramatically from the first couple of years. (A summary of this can be found in the graph on page 3 of the release notes.)
Now that the Taxonomy is established and stakeholders are more familiar with it, we have concentrated our focus and resources on changes required for new Accounting Standards Updates and disclosures with identified data quality concerns. These are disclosures that we, along with stakeholders, have identified as having more data quality concerns than other areas.
These areas are reviewed in a comprehensive manner with the objective of delivering an implementation guide for the topic and making targeted changes in the Taxonomy that are required to address the data quality concern. It is possible that few Taxonomy changes would be required and implementation guidance will suffice, but this will vary by disclosure. Currently, we are reviewing Pensions and Fair Value. We expect to expand our disclosure coverage next year.
We expect to see less of the so-called “roller-coaster effect” as the 2014 and later Taxonomies are used because the volume of non-specific changes will continue to decline. We anticipate that most of the changes going forward will be in targeted topics that have been widely socialized before they are finalized. It should be easier for issuers to focus on these targeted changes and this is particularly true with Accounting Standards Update-related changes where issuers already are focused on the new Update disclosure requirements.
Don’t Get Spooked by Comment Deadline
The Comment Deadline on both the FASB's 2015 Draft U.S. GAAP Taxonomy, and the SEC's 2015 Draft Non-GAAP Taxonomy Files (pertaining to the EDGAR Filer Manual); is October 31, 2014.
Find out more about FASB’s Sept. 9 webcast at which SEC and FASB staff are slated to speak about XBRL in this FASB's in FOCUS outline.