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SEC Staff Briefing: The Roll-out of Interactive Data Reporting for US-listed Public Companies David M. Blaszkowsky, Director, Office of Interactive Disclosure XBRL Canada Conference Toronto 5 November 2009 1 Disclaimer As a matter of policy, the Securities and Exchange Commission disclaims responsibility for the private statements of SEC employees. The views I am expressing today are solely my own, and do not reflect the views of the Commission, the Commissioners, or of any employees other than myself. 2 Interactive Data / XBRL: “News From the Front” Mandate started 15 June – How is it working? First Reporting period in XBRL went well >500 filings, >10 percent are Phase II/III “early” filers First detail-tagged, first 10K submissions Includes Canadian, other foreign private issuers Companies can tag successfully Modest cost, modest time Learning curve: Most frequent problems are the most basic, easiest “Best practices” starting Benefits of a large, comprehensive taxonomy “User-side” awakening Investor applications emerging Investor interest increasing Concerns about detailed footnote tagging Staff are reviewing XBRL exhibits for technical quality, tag choice, etc. 3 “Interactive Data” Add Structure and Meaning to Filed Financial Disclosures B-S “Taxonomy” Label: Net Sales Tag: NetSales Metadata: - Currency - Year - Amount - Scenario - Value P&L US-GAAP: List of Tags Mapping Tagging Flows OR: an “Extension” Footnotes Footnotes (Block, Detailed) 4 Why is Interactive Data Important for Company Information? Filers/Corporations Process improvements and savings Easier/Faster compliance Better communication, visibility to investors Especially caps for mid/small- Buy-side “Faster, cheaper, better” As-reported, and complete No introduced errors More useful, more functionality Higher analysis/analyst productivity Improved comparability Improved Market Efficiency 5 Public Company Reporting Using Interactive Data What will be required Who and when Important additional features 6 What Will Be Required Content: Primary financial statements (IS, BS, etc.) Footnotes Financial statement schedules. Certain company identifier information (“DEI”) Forms Periodic Reports (10Q, 10K, 20F, 40F) Transition Reports Reports on Forms 8-K and 6-K with revised audited versions of financial statements Securities Act registration statements (S-1, S-3, S-4, S-11, F-1, F-3, F-4, F-9, F-10) Not IPOs Interactive data requirements are provided as an exhibit “Disclosure Neutrality” Posting to the Filer’s website, if it has one, same business day, for at least 12 months 7 Phase-in Schedule What? Who? Year 1 Year 2 Filer Group Domestic/Foreign Large Accelerated Filers Using US GAAP • Public Float >$5 billion • All other Large/Accelerated Filers All other Filers in US GAAP (including smaller reporting companies) All Issuers using IFRS as published by the IASB • Face Financials: All facts • Footnotes: Block tag each footnote • Schedules: Block tag each schedule • All from first year • Footnotes: • Each significant accounting policy • Block tag each table • Tag each amount • Schedules: Tag each amount 8 Phase-in Schedule When? Who? Filer Group Year 1 Year 2 Begin with the first 10Q (or annual, for 20F/40F filers) for periods ending after 15 June Domestic/Foreign Large Accelerated Filers Using US GAAP • Public Float >$5 billion 2009 2010 • All other Large/Accelerated Filers 2010 2011 All other Filers in US GAAP (including smaller reporting companies) 2011 2012 All foreign private issuers using IFRS as published by the IASB 2011 2012 30 day grace period, from the filing date of the related report, for the initial submission (by amendment) of interactive data exhibit 9 Data reliability and non-compliance Data in the interactive data file submitted will be subject to a limited liability Subject to specified anti-fraud provisions except in connection with a failure to comply with the tagging requirements that occurs despite a good faith attempt to comply and is corrected promptly after the filer becomes aware of the failure Limited liability provision phase-out: Over a two-year period for each company. Provision would terminate completely on October 31, 2014. Interactive data files will be excluded from the officer certification requirements under the Exchange Act rules No requirement of auditor assurance on their interactive data exhibits Filers that do not provide or post required interactive data on the date required will be deemed not current with their Exchange Act reports “Curable” by providing/posting the interactive data file SEC Interactive Data Previewer, and automated validations are helpful 10 Thank You! Part 1… Contact Information for Questions [email protected] 202-551-4144 11 Feedback and Findings From Filings to Date Extensions Check to ensure against unnecessary extensions Recheck the taxonomy to make sure that a tag doesn’t already exist Don’t create a new tag if a standard tag exists Tag choices could be questioned by staff or by the marketplace If extending, include definition for monetary elements, and describe whether it has debit/credit attribute Negative values vs. negated labels: understand the element and its definition Taxonomy designed so that most elements have a positive value Tags versus labels… 12 Feedback and Findings From Filings to Date(2) Labels: Make sure the labels match those of the traditional (HTML) document exactly “Sales” vs. “Turnover”: Same tag, different label Labels can be extended without creating a new tag Use the pre-viewer to compare and check! Rendering aesthetics vs. tagging integrity XBRL is dependent on the integrity of the tags Focus on the accuracy of the tags, not the visual appearance of the rendering Make sure element labels match line item captions Some differences cannot be avoided, e.g. indenting, fonts, underlining, total/subtotal captions, brackets (on SSE) 13 Feedback and Findings From Filings to Date(3) Management review is prudent Senior management should have an opportunity to review Even if tagging is outsourced, they are still your financials and tags Remember: Voluntary Filing Program is closed for most public filers Public companies can only submit required filings VFP only open for Article 6 and for mutual funds FPIs: IFRS filings cannot be provided yet 14 Feedback and Findings From Filings to Date(4) Finally – Looking to make the Interactive Data roll-out effective and smooth Check regularly for SEC staff comments and FAQs Look for additional public information seminars Archive of 10 June 2009 event http://www.connectlive.com/events/secinteractivedata061009/ Reprise for the next phase of filers, and for footnotes Communicating with companies: web, phone, podcasts, other media as appropriate Best practices will emerge Above all: Start early! Whether for phase 2 , or for footnotes! 15 Thank You! Contact Information for Questions [email protected] 202-551-4144 16