Will The SEC Be Ready For Its Own XBRL Mandate?

The Securities and Exchange Commission (SEC) is getting a bit behind on XBRL. Since publishing the final rule in the federal register (http://www.sec.gov/rules/final/2009/33-9002.pdf) on February 10, 2009, the SEC has been preparing for the first official filing

gs in XBRL. According to the guidelines, large accelerated filers with a world-wide capital float greater than $5 billion USD as of June 30, 2008 are required to begin filing XBRL with the first quarterly filing for periods ending after June 15, 2009.

In preparation for the new filings, XBRL US released the 2009 version of the US GAAP XBRL taxonomy. The new taxonomy contains guidance on the latest FASB pronouncements (FAS 160, 161, 163, 141 for example) that are required for most filers after December 15, 2008. FASB’s timetable requires companies to adopt the new Financial Accounting Standards and have their SEC filing for 2009 reflect the changes.

The new standards were published long after the present official XBRL 2008 US GAAP taxonomy. In other words, the new 2009 US GAAP taxonomy, which does incorporate all filing requirements for US GAAP as of December 31, 2009, is required for the filing of correct XBRL.  XBRL US has released the 2009 taxonomy and they are now available on their web site but they are not available on the SEC’s website.

As of May 24, 2009, the taxonomies listed on the SEC website as official (see http://www.sec.gov/info/edgar/edgartaxonomies.shtml ) are dated March 31, 2008. This means that any filing entity subject to the new FASB regulations will not have an official taxonomy with which to file. In fact, a few companies have already submitted XBRL to the SEC using the new 2009 taxonomy only to receive a swift rejection. The EDGAR system is not yet ready to accept the 2009 taxonomy and will not be until it is announced and listed on the SEC’s website. The XBRL viewer will also not accept the 2009 US GAAP taxonomy leaving filers with no means to validate their XBRL.

Will the SEC correct this problem? Of course they will. In the meantime, individual filers and filing agents are without any official means of determining the correctness of filings. Companies that are subject to the new FAS pronouncements are encouraged to prepare their filings with the new 2009 taxonomy and wait for SEC notification. Let’s hope that day arrives very soon.

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