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The third and final wave of the SEC's financial reporting overhaul is effective June 15, 2011. Accordingly, all reporting issuers must upgrade their financial statements to XBRL format.
XBRL is a new technology that transforms financial statements into standardized, interactive data. Investors can use XBRL files to compare apples to apples when assessing different stocks.
The burden of upgrading to XBRL is on issuers, who must bear the time and costs of implementation.
Failure to upgrade to XBRL in a timely manner could result in an issuer "going dark" and make Rule 144 sales unavailable to certain shareholders. It is very important to prepare today! |
Preparation Tips
The SEC estimates that issuers will spend about $30,000-40,000 in the first two years of implementing XBRL. The process of creating a unique taxonomy for your financials is a time-consuming and labor-intensive process.
- You should prepare for XBRL implementation as soon as possible.
- Evaluate your filer options, and seek experienced professionals to assist you in implementation.
- Budget for expenses above and beyond your routine EDGAR costs.
- Communicate with your entire filing team, from internal prep to external auditor, to ensure that everyone is ready for XBRL.
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