On June 13, the Securities and Exchange Commission announced that they would allow organizations to voluntarily submit their financial statements to the SEC in the Inline XBRL (iXBRL) format. Forms that are currently required in XBRL format can now be filed with the SEC in iXBRL. These include 6-K, 8-K, 10-Q, 10-K, 20-F and 40-F form types.
The volunteer period would start immediately and end in March 2020. This extended voluntary filing period allows the SEC to further explore the advantages of iXBRL, which could signify a broader intent to replace the existing dual filings requirement with one filing.
1. What is iXBRL?
Currently the SEC requires organizations to file quarterly reports and annual reports in dual formats – EDGAR-compliant HTML (for web viewability) and XBRL (for financial statement data processing). The iXBRL specification allows you to embed your XBRL tags into your HTML-formatted financial statements, rather than needing a separate filing. This format keeps the human-readable aspect of the financial statements so it remains viewable in a web browser while adding the computer-readable XBRL tagging to the statements. In effect, the iXBRL document is a straight-up replacement for the XBRL instance document. Through browser extensions or other software, the XBRL information contained in the HTML document can also be viewed directly or even exported into standard XBRL.
2. What are the expected benefits for using iXBRL?
According to the SEC, iXBRL is expected to have a number of benefits for filers and investors including:
- Less time and money. iXBRL reduces your burden of preparing two separate filings, decreasing the time it takes to create and submit the required filings.
- Improved quality and reliability. By embedding XBRL tagging into the HTML document, it is expected to help preparers better detect and correct data errors that occur with dual filing requirements. In particular, during the review and revision process, changes will only need to be made in one document. By improving the quality of data, the SEC expects investors to increase their use of XBRL data.
- Viewable in any browser. With iXBRL, your financial statements will now contain XBRL-tagged information in a format that is viewable in any web browser. Since the rendering of your financial statements is in HTML document format, investors will be able to see your XBRL data within the textual context of your report.
3. When should I start using iXBRL?
As the filing is voluntary until March 2020, filers are not immediately required to use the iXBRL format. The long lead time by the SEC is to ensure a smooth transition to the new filing format for companies, investors and the SEC itself. It is expected that SEC rules will be adopted in the future to permanently mandate inline XBRL at a later date. As a filing agent, Computershare will work with you to help you make a smooth transition to any new filing.
Computershare anticipates fully supporting iXBRL by the next quarter filing deadline in November for all clients who want to take advantage of the benefits of the voluntary inline XBRL filing format.
Learn more about our full service EDGAR filing services.