XBRL Happenings...

No, the SEC hasn’t announced when it will meet to vote on a final rule on XBRL (following on its proposed rule issued for public comment earlier this year), but there are other happenings afoot on the XBRL front.

Last week, XBRL-U.S. announced the release of the latest version of the data tags (officially called, the ‘taxonomy’) for tagging information in interactive data form, relating to financial statements filed in accordance with U.S. Generally Accepted Accounting Principles or U.S. GAAP. Specifically, the latest version of the data tags, called U.S. GAAP Taxonomy, Release 2009, has been released by XBRL-US for a public review period, ending January 15, 2009.

Michelle Savage of XBRL U.S. told us, “The ‘taxonomies’ are collections of financial elements like net income or EPS that help describe your own financial statement information; each element has an associated label, definition and in some cases, authoritative reference materials. This set of taxonomies includes recent FASB pronouncements, including FAS141R, FAS160, FAS161 and FAS163.”

Savage added, “With an expected final rule from the Securities and Exchange Commission on mandatory XBRL submissions for all public companies coming any day now, this is a perfect opportunity to take a look at these collections of U.S. GAAP disclosures and common reporting practices and provide comment back to the XBRL U.S. project team. Are there elements missing? Labels or definitions that should be revised so that it’s easier for you to create XBRL-formatted financials?”

Further speculation on when SEC will come out with its final rule on XBRL can be found in Bob Schneider’s Nov. 30 post in the Hitachi XBRL blog, Data Interactive, “Waiting for a Mandate on XBRL.” Among the people Schneider quotes are remarks of SEC Chairman Christopher Cox at FEI’s Current Financial Reporting Issues conference. Schneider also cites a Nov. 21 post in the CrossBorder Group Blog, “Waiting for XBRL,” which cites to remarks by SEC Office of Interactive Disclosure Director David Blaszkowski at a Nov. 20 Business Wire webcast on “Understanding XBRL and the SEC’s Proposed Rule.”

• According to the CrossBorder Group Blog cited above, here is the conversation that took place on the Business Wire webcast as to expected timing of a final rule from SEC on XBRL: “Business Wire’s vice president of global disclosure and financial reporting services Michael Becker posed THE question to the interactive disclosure czar himself, David Blaszkowsky. ‘I’m going to have to ask you this… when does it happen?’ said Becker. The reply? ‘Our commitment is to bring this before the commission in the fall, recognizing we are deep in to the fall,’ said Blaszkowsky. ‘This is an important issue to the chairman and this will be reviewed. You’ll see some news shortly, I expect. No, I’m not ready to give a particular date.’"

Blaszkowski participated in a concurrent session on “The State of XBRL Today” on Nov. 17 at FEI’s CFRI conference. Although I did not sit in on that session, I understand from others who attended that his remarks as to timing of a final rule were similar to his statement on the Business Wire webcast quoted above.

In a related development, as previously reported, the SEC embarked on its 21st Century Disclosure Initiative (21CDI) earlier this year. As initially announced in June, the first phase of 21CDI, originally slated to be completed in 2008, is an SEC staff study led by Bill Lutz, PhD. The study is aimed at contemplating improvements to the SEC filing and disclosure system, including considering a potential move to an interactive company file system.

Also as originally announced, 21CDI’s second phase contemplates forming a Federal Advisory Committee in 2009 to review the SEC staff’s plan and make recommendations to the Commission for implementing it. There would then be a multi-year phase in which the Commission would consider and begin acting on the Advisory Committee's recommendations, which, said the SEC, would include its normal notice and comment rulemaking process. CFO.com’s Sarah Johnson reported on SEC’s October roundtable on the 21CDI in her Oct. 8 article, “On Defensive, SEC Touts Reporting Plan.”

Some have speculated that the change in administration (i.e. the incoming Obama-Biden administration and other changes at regulatory agencies) and the need to focus on the financial crisis may impact the ultimate timing of release of a final rule on XBRL - and its ultimate effective date - as well as timing of any proposed changes arising from SEC’s 21CDI.

In other news, the SEC voted yesterday to adopt certain final rules - and to release for public comment certain proposed rules - on credit rating agencies, see SEC’s press release and the NRSRO Fact Sheet.

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Webcast Dec. 2: COSO’s New Guidance and You

Final guidance is forthcoming from COSO on Monitoring Internal Control Systems. The guidance follows from COSO’s earlier Exposure Draft released earlier this year, with the COSO Project Team – led by Grant Thornton – incorporating certain changes based on comments received. COSO’s upcoming publication focuses on Monitoring – one of the five elements of internal control established in COSO’s 1992 Internal Control-Integrated Framework. (The five elements are: control environment, risk assessment, control activities, information & communication, and monitoring.)

Public and private companies have certain requirements set forth by the SEC/PCAOB and AICPA respectively relating to generally accepted internal control frameworks which reference the COSO framework. For example, the SEC’s rule for management reporting under Sarbox 404 states (in Section II. B. 3. a. of the SEC rule): “The COSO Framework satisfies our criteria and may be used as an evaluation framework for purposes of management's annual internal control evaluation and disclosure requirements.” [Footnote 67 in the SEC rule notes there may be other acceptable frameworks used outside the U.S., such as guidance issued by the Canadian Institute of Chartered Accountants and the ICAEW’s Turnbull Report]. Additionally, the SEC's rule states: “The final rules require management's report to identify the evaluation framework used by management to assess the effectiveness of the company's internal control over financial reporting.” Similar sentiments are expressed in PCAOB’s Auditing Standards No. 5 (AS5) (see e.g. AS 5 footnote 7, para. 87 and 88).

We referenced once before, but in case you missed it or were waiting to see how your calendar lined up, it’s not too late to register for a webcast taking place tomorrow where you can learn more about COSO’s Guidance on Monitoring Internal Control Systems – expected to be issued in December or early January. Tune into the webcast sponsored by Financial Executives International and Grant Thornton on Tues. Dec. 2 at 2:00 pm EST by registering at the following link; all registrants should enter company code 710004.

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