There’s been a lot of buzz surrounding Inline XBRL, but so far not a lot of concrete answers could be found. That’s all about to change. In an SEC press release dated March 1st, the SEC unanimously voted to require the use of iXBRL for public company reporting. Citing benefit to investors, improved accessibility, and data quality submitted by public companies, the Securities and Exchange Commission continues to push their disclosure modernization initiative with the latest batch of proposed amendments.
Think back to the original XBRL requirement in 2009. Prior to that time, investors had to rely on large data aggregators and manual collection of paper filings. Sounds painful, right? It was. Fast forward to today, and users can go directly to the SEC site and download XBRL data for filers big and small alike. There is no argument that the advancements in data collection and machine-readable data allow investors and rule makers access to powerful, decision-driving data.
The same is true of the trend to iXBRL. While it may seem scary and expensive on the surface, the SEC has included steps to reduce the lopsided impact to smaller organizations. SEC’s Acting Chairman, Michael Piwowar stated, “While XBRL technology has made disclosures easier to access for investors, there are legitimate concerns about the burdens smaller companies face when preparing their filings.” To reduce the disproportionate impact on smaller filers, the rule will require a phased three-year approach to inline XBRL based on filer category, giving smaller companies adequate opportunity to prepare for the effective date.
Now that we have moved past the scary presumption of cost to convert to inline XBRL, let’s talk about a few of the potential benefits to making the switch:
1. Inline XBRL allows filers to embed XBRL data directly into their filings instead of as attachments. When financial statement information is submitted as a separate data file on the SEC EDGAR system, it increased the chance of data inconsistencies.
2. Full control over the presentation of XBRL disclosures within the HTML filing.
3. Lower regulatory costs. While this may not seem as important to filers as benefits 1 & 2, it does reflect the SEC’s trend to use technology to reduce the regulatory burden they face.
The proposed amendments voted in the March 1st session are now out for a 60-day public comment period. Stay tuned for more in-depth information coming soon!