While a year ago, SEC permitted voluntary inline XBRL filing, this year in March; it proposed the use of Inline XBRL format for the submission of operating company financial statement information and mutual fund risk/return summaries. The SEC strongly believes that inline XBRL submissions will improve the data quality and over time, decrease cost of preparation of data. This will also decrease compliance requirement of dual filing of EDGAR HTML and XBRL documents since inline XBRL combines both XBRL and HTML into one single viewable document.
Though Inline XBRL filing is a first-time experience for US filers, it has been in the global arena for a while now, with regulators who have selected inline XBRL as their reporting standard several years ago.
IRIS has been involved in inline XBRL filing of annual financial and tax reporting for seven years now, in the UK market to the HMRC UK (the tax regulator) and in Ireland to the Revenues Authorities (the tax regulator). It is our experience that the ease it brings to preparers and analysts at large is phenomenal, and we at IRIS are very excited at SEC’s move to inline XBRL.
IRIS Carbon, our disclosure management platform for enterprises, is inline XBRL ready and helps filers create their documents as they normally would, and generate either XBRL or inline XBRL outputs through the platform.
Response to Inline XBRL Announcement
In the immediate few months after the SEC announcement, we recognized in our interactions with clients in the US markets that there were a range of reactions (and emotions) around inline XBRL – curiosity, a desire to understand more from us since we had experience around inline XBRL in other parts of the world, to fear of change and not wanting to deal with inline XBRL until absolutely necessary. Many clients, while aware of the announcement, didn’t know what their inline XBRL document would look like, how it would be prepared, and what changes would be required in their internal systems to accommodate this shift
With seven years of deep, hands-on experience with inline XBRL in the UK markets, we were able to guide our clients in the US around the standard, what it is all about, the benefits of inline XBRL and why clients should make a shift early, even if it is not mandatory. When SEC requested Comments on Inline XBRL, we also submitted our response to the SEC on our opinion on Inline, the advantages that Inline brings in, what companies feel about Inline. We also provided few suggestions which SEC should consider. From our product side, apart from generating inline XBRL output, IRIS CARBON also comes with an inline XBRL previewer. This helps the filers to actually ‘see’ their XBRL documents and identify the gaps if any from their actual statements and summaries.
The Inline XBRL previewer was received with open hearts. While we had immediate early adopters to inline XBRL filing through IRIS Carbon, there were a few clients who liked the concept but wanted to take it a little slower. Despite the fact that they did not start preparing the inline XBRL filing, they were happy to use the inline XBRL previewer functionality as well to easily ‘see’ their XBRL documents and compare it with their EDGAR outputs.
Inline XBRL Received with Open Hearts
Those who started using IRIS Carbon for Inline XBRL filing saw immediate benefits of easier access to their own XBRL data through the platform. They could instantly relate to the benefits that their investors and other users of information could have with data becoming much more meaningful and easy to access and understand. What’s more, the inline XBRL previewer comes with sophisticated search and filter options letting users reach specific sections in the document very easily. This was also helpful in reducing the iterations and time spent in returns preparation.
Here is what one of our clients had to say about their shift to Inline.
“We decided late in the first quarter of 2017 (Form 10-Q preparation calendar) to move forward with the use of iXBRL. I was impressed as a user with how smoothly this occurred in IRIS CARBON. It was really as easy or more than my prior effort since I was still getting acclimated in the use of IRIS Carbon at this stage. The support team has been top-notch throughout, carrying the process forward and taking on responsibility beyond my expectations, advancing edited copy as well as tag assignments in non-tabled information, as they rolled over prior drafts for my opening current document draft; and continuously working to eliminate any unnecessary departures from standard SEC taxonomy elements.”
Interim Chief Financial Officer and Secretary
MGC Diagnostics Corp.
When we take a look at the overall rate at which companies have adopted Inline XBRL, it has quadrupled in a year. In 2016, only 22 companies had moved the inline way, while 2017 has already seen more than 90 companies filing in inline XBRL. The base numbers might look small, but it indicates the accelerated growth with which companies are moving to inline. A voluntary standard which quadrupled the number of clients adopting it in one year clearly must be easing out the lives of the preparers to get that response.
We at IRIS are strong advocates of the inline XBRL standard, and would be more than happy to help you with any queries you might have around Inline XBRL Filing. You can contact me at email@example.com or drop a message at IRIS Carbon TM for us to get in touch with you.