Foreign private issuers who file their financial statements following international accounting standards are getting some helpful tips from regulators on how to do so in XBRL.
For companies following International Financial Reporting Standards, the Securities and Exchange Commission has approved an IFRS Taxonomy that will enable those companies to file their financial statements in the interactive XBRL format. While GAAP filers have been using an approved GAAP taxonomy to submit financial data in XBRL for several years, the SEC took several more years before it became satisfied with the IFRS taxonomy in March 2017 such that it would approve it for filer use.
Now that the SEC has approved the IFRS Taxonomy, foreign private issuers are required to prepare interactive data files for their financial statements for periods ending after Dec. 15, 2017. That means foreign filers with calendar year ends will soon be tagging their financials statement data using the newly approved taxonomy for the first time.
Remembering the learning curve for GAAP filers when the SEC first began requiring XBRL submissions nearly 10 years ago, the SEC decided to issue some guidance in the form of questions and answers, to help IFRS filers through their first tagging exercise.
The Q&As address, for example, whether files can submit their financial statements using a taxonomy of their choice — the answer is no. The SEC explains only taxonomies listed on its website are eligible for use for filings with the SEC.
The guidance also gives FPIs some help on where to find taxonomies for financial statement elements other than those governed by the IFRS Taxonomy, like schedules required under various rules in Regulation S-X, disclosures about oil- and gas-producing entities required under Form 20-F, and dimensional elements whose underlying recognition and measurement are not specified by accounting rules. For many such items, IFRS filers will need to refer to GAAP taxonomies, the SEC explains.
GAAP filers are also getting up to speed on some new taxonomy issues this year as companies adjust to a new SEC Reporting Taxonomy, which contains elements for items that are often reported by GAAP filers but are not specified by GAAP.