The IFRS Foundation has published its 2013 draft IFRS Taxonomy, but that doesn't mean IFRS filers in the United States will be expected to use it any time soon.
The draft taxonomy consolidates the interim releases that were published by the foundation in 2012 as well updates and improvements to International Financial Reporting Standards issued by the International Accounting Standards Board. The taxonomy is intended to be used by IFRS filers in submitting financial statements formatted in XBRL. The IFRS Foundation is accepting comments on the draft taxonomy through March 18, and it plans to hold a webinar on Feb. 4 to explain the changes.
Whatever the changes the Foundation has put forth so far or might pursue as a result of the comment period, IFRS filers in the United States likely will get another year of reprieve from the requirement to submit financial statements formatted in XBRL. The Securities and Exchange Commission signaled the accounting profession late in 2012 that it doesn't expect to approve the taxonomy in time for calendar-year IFRS filers to be able to use it to submit financial statements in XBRL.
The SEC phased in a requirement from 2009 through 2011 for all U.S.-listed companies to submit their financial statements in XBRL, including IFRS filers. To submit financial statements in XBRL, however, registrants must use a taxonomy, or a designated system of tags that define and map financial data, that is approved by the SEC. Companies following Generally Accepted Accounting Principles use a GAAP taxonomy that is maintained and updated by the Financial Accounting Standards Board and approved by the SEC.
The SEC has not been satisfied, however, with the IFRS taxonomies that have been produced so far by the IFRS foundation. The SEC is concerned about some design differences between the IFRS and GAAP taxonomies and has called on the foundation to produce more tags to create more detailed mapping of financial data, ultimately making financial statements more easily comparable across capital markets. The SEC has said IFRS filers in the United States will not be required to meet the XBRL mandate until the SEC can get comfortable with an IFRS taxonomy.
At a November meeting of the Center for Audit Quality's SEC Regulations Committee, SEC staff members said they don't expect IFRS filers will have to comply with XBRL when submitting their 2012 annual reports, according to a recently published summary of the meeting. That suggests staff members don't expect the latest updates to the IFRS taxonomy to meet the SEC's expectations. The SEC has not said when or how it expects to approve a taxonomy that will work in the United States.
SEC staff also noted to the CAQ committee that it has noticed some IFRS filers attempting to submit financial statements in XBRL by following the GAAP taxonomy, a practice it is advising IFRS filers to quit. However valiant the effort, the staff said reporting IFRS financial information using the GAAP taxonomy “carries the risk of incorrect and confusing information being provided to investors,” the meeting summary states. “It is important, therefore, that (IFRS) filers refrain from submitting XBRL exhibits for IFRS financial information until the IFRS taxonomy is finalized.”