By Denise Lugo
April 3 — A revenue recognition taxonomy exposure draft and implementation guide will be published in 2014 to give all constituents early opportunity to consider and comment on the model and choices, said J. Louis Matherne, chief of taxonomy development at the Financial Accounting Standards Board, during a panel discussion on eXtensible Business Reporting Language (XBRL) updates.
FASB is expected to publish a final standard in the near term on how entities should account for revenue from contracts with customers. While a final revenue recognition standard will soon be released, the proposed effective date is for fiscal years starting after Dec. 15, 2016, which would normally put revenue recognition under the 2017 update in terms of a published taxonomy, Matherne said.
“But we are considering including it in the 2016 release for two reasons: to make the elements available in time for Q1 2017 filings, as well as to have it available in a published taxonomy effective date so that preparers and users can start working with it before it becomes effective,” said Matherne.
There are some technical considerations that have to be worked out before this is done, he said.
The discussion, which was hosted by the FASB, provides information about how investors use XBRL and how it is considered in the standard setting process. It also includes an update by the SEC staff and a discussion by the FASB staff on 2014 U.S. GAAP taxonomy developments including XBRL implementation guides.
In separate comments during the panel discussions, FASB board member Harold Schroeder, clarifying that his comments were not on behalf of the board, said investment firms could save themselves millions of dollars if they allowed analysts to use XBRL as opposed to manually keying in data on spreadsheets.
Manually keying in the data takes a lot of time and account for some ten percent of analysts fixed labor costs, said Schroeder. He stated that hundreds of investments firms are incurring very significant costs by not using XBRL.
“Combined the cost incurred by all investors it's a cost that could easily be in the hundreds of millions of dollars,” he said.
Separately, providing updates from the Securities and Exchange Commission, Kimberly Earle, the associate chief accountant in the Office of Interactive Data, said now that U.S. public filers have the tools and knowledge they need to create fully compliant interactive data filings, the SEC is focused on the quality of the filings.
Earle said the SEC plans on using them to study disclosures across all public companies, to perform targeted examinations and analysis of filings and also use it in its risk analysis programs.
The SEC's monitoring reveals that overall the quality of submissions is continuing to improve in line with its expectation for the program, said Earle. “That said, we still continue to see some issues from filers,” she said.
To help improve data quality, the SEC is therefore exploring the development of a prototype to assist in the assessment of inline XBRL, said Earle. The prototype would allow XBRL formatted information to be embedded in a web browser display HTML document.
In updates related to taxonomy transition issues, Earle said the 2014 taxonomy will be made available with the next EDGAR update release but did not specify a date.
The SEC makes two taxonomy versions available for use: the current year taxonomy and the immediately prior version and removes any older version for use. “This means that shortly, the 2012 taxonomy will no longer be usable for filings with the SEC, and filers should be planning to transition from it in the near future,” said Earle.
U.S. generally accepted accounting principles (GAAP) taxonomies are approved when they are made available for use on the SEC's EDGAR standard taxonomies webpage. “The date that EDGAR will implement these changes has not been established but it will not occur before April 25, 2014,” she said.
An EDGAR filer manual was recently posted on the SEC's website.
Touching on international financial reporting standards (IFRS)-related issues, Earle reiterated comments posted on the SEC's website that foreign private issuers that prepare financial statements in accordance with IFRS are not currently required to submit interactive data to the SEC until a taxonomy is specified for their use.
Earle said the SEC received a number of questions about its current new action letter on the topic. “The commission staff is continuing to review taxonomies for use by foreign private issuers,” said Earle. “We encourage filers, investors, analysts, software service providers and other interested parties to participate in the IASB's public reviews of its taxonomy,” she said.
The SEC will update the public via its website or emails “when there's more news to share,” said Earle, “but we encourage you to become involved in the IASB's processes.”
To contact the reporter on this story: Denise Lugo in Norwalk, Conn., at email@example.com
To contact the editor responsible for this story: Ali Sartipzadeh in Washington at firstname.lastname@example.org
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)