For companies falling into the third phase of mandatory XBRL filings this year, the Securities and Exchange Commission is offering some tips and resources based on what it's seen in XBRL submissions so far.

The SEC has published a summary of XBRL information that might be helpful to those phase-three filers that will be submitting their financial statements for the first time in XBRL in 2011. The largest public companies completed their first mandatory XBRL submissions in 2009, followed by a second wave of larger and middle-tier public companies in 2010. The final phase focuses on the smallest of public companies, those with a public float below $75 million, and foreign private issuers; however, the SEC has already granted some leeway to foreign companies as it awaits a workable taxonomy from international standard setters.

XBRL is an interactive reporting method that enables desktop computers to read financial information and use it in analytical tools. The SEC says XBRL is to financial reporting what bar codes are to merchandise tracked in a computerized inventory system. Filers must select tags from the US GAAP taxonomy that best describe their myriad financial reporting concepts, then attach them to their specific financial data to submit their financial information via XBRL.

Companies can use do-it-yourself models to create their XBRL submissions, or they can use various software solutions and service providers that are proliferating in response to the new requirement. “Ultimately, you should choose a solution that matches your company's resource and expertise requirements based on an evaluation of the available options,” the SEC staff advises.

Key among its observations, SEC staff advises companies to select tags carefully. “Selecting the best tags to represent the information in your financial statements is the most critical part of the process,” the SEC writes. The SEC's interpretive guidance provides suggestions on how to make the best tag selections possible.

The staff also advises companies to use its free previewer to look over the submission before sending it to the SEC, to help verify the completeness of the submission. The staff cautions, however, that the XBRL preview will not produced an exact graphic match to the HTML submission, and companies should be careful not to alter tag selections to achieve an exact graphic match. Software vendors and service providers can help reconcile differences and validate results, the SEC says.

Finally, the SEC advises companies to use validation tools from XBRL venders and the SEC test filing mechanism to test the technical validity of the filing. “If your XBRL submission is not technically valid, it will not be accepted by the EDGAR system,” SEC staff warns.

The summary includes additional resources such as:

·         a small business compliance guide;

·         staff interpretations and frequently asked questions;

·         the final rule release; and

·         information about the U.S. GAAP taxonomy.