Just in time for the holidays, large companies got a gift from the Securities and Exchange Commission: Six extra months to comply with the long-awaited new rule mandating the use of interactive data.

At its Dec. 17 open meeting, the SEC voted 4-1, with Commissioner Luis Aguilar dissenting, to adopt amendments that phase in a requirement for companies to provide their financial statements tagged in XBRL, or eXtensible Business Reporting Language, as an exhibit to their SEC filings.

The phase-in schedule adopted requires the first group of approximately 500 companies to comply with the reporting requirement beginning with the first quarterly report on Form 10-Q, or annual report on Form 20-F or Form 40-F, for fiscal periods ending on or after June 15, 2009—six months later than originally proposed back in May. For calendar year-end companies, the first required interactive data would be in connection with their June 30 Form 10-Q.

In year one, the new rules would apply only to domestic and foreign large accelerated filers that use U.S. Generally Accepted Accounting Principles and have a worldwide public float above $5 billion. All other domestic and foreign large accelerated filers using U.S. GAAP would follow in year two. All remaining filers using U.S. GAAP, including smaller reporting companies, and all foreign private issuers that prepare their financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board would comply in year three.

After the phase-in period, new public companies would begin filing interactive data with their first quarterly report on Form 10-Q or annual report on Form 20-F or Form 40-F.

As originally proposed, during the first year of reporting in interactive data, companies will tag their face financial statements and would tag the footnotes and schedules in block text only. After the first year, companies will be required to tag the detailed disclosures within the footnotes and schedules. However, in a change from the proposing release, the final rule permits, but doesn’t require, the tagging of narrative disclosures.

Full details on the final rule are forthcoming in Compliance Week’s Dec. 23 edition.

Topics