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After the SEC XBRL mandate: What's next for IFRS filers?

Jennifer Fothergill, Director, External Reporting Solutions at Merrill Corporation and Ryan Coyne Director, External Reporting Solutions at Merrill Corporation | April 25, 2017

  

Video Transcript

Ryan:
Hello everyone and thank you for joining us today.  My name’s Ryan Coyne and I am a Director of External Reporting Solutions with Merrill corporation. My colleague Jennifer Fothergill and I are here to give you some more information regarding the SEC’s acceptance of the IFRS Taxonomy and the upcoming XBRL mandate for IFRS filers.

Jennifer:
On March 1, 2017, the SEC published a taxonomy on its website that will enable Foreign Private Issuers that prepare their financial statements in accordance with International Financial Reporting Standards to submit their annual reports in eXtensible Business Reporting Language or (XBRL) format.  For those of you that are new to XBRL, it’s a machine-readable interactive data format which allows users to more easily access and analyse financial statement data.

Ryan:
While the SEC’s XBRL rules have been in place for several years for both domestic and foreign issuers that prepare their financial statements in US GAAP, Issuers that file their financial statements in IFRS have been exempt from having to comply with the rules until the SEC approved an IFRS taxonomy. Now that a taxonomy has been approved, foreign private issuers may begin to submit their financial statements in XBRL immediately, and it’ll become mandatory for companies with a year end on or after December 15, 2017.

Jennifer:
The biggest impact will be on Annual Reports which file under Forms 20-F or 40-F. Most Form 6-Ks, even those with IFRS interim financial statements, will not require XBRL. If you have a December 31st year end, your first required XBRL filling will be with your 2017 annual report in Q1 2018. However, for those ambitious companies with a year-end before 15 December 2017, you can opt-in and begin filing XBRL with your next 20-F.

Ryan:
Unlike the phase-in period for initial XBRL filings on behalf of the US-GAAP community, there’s only a limited accommodation for first-time IFRS XBRL filers. In the first year of submitting mandated XBRL filings, XBRL can be filed as an amendment to the Annual Report on Form 20-F/A or 40-F/A up to 30 days after the filing of the Annual Report or the due date for the Annual Report, whichever is earlier. 

Jennifer:
Given the details of this mandate, companies should begin to understand what’s involved with XBRL now. Advance preparation, gaining familiarity with the IFRS taxonomy and understanding the complexities is vital to "getting it right". It’s highly recommended to get the heavy lifting out of the way and perform the initial mapping process well ahead of time.

Ryan:
The first two years of XBRL adoption are the most important since they set the foundation for all your XBRL filings to follow. Taking shortcuts at this stage may lead to poorly constructed XBRL files which are either non-compliant or contain underlying errors that portray misleading financial information to the investment community.

Jennifer:
The SEC mandate means the finance function will now need to understand the SEC’s XBRL rules and requirements and apply this knowledge to its financial statements – in the same timelines as in years past.

Ryan:
Firstly, relax! This change may look daunting but it’s a question of getting organised.  If you would like to book a consultation with an XBRL expert at Merrill, please get in touch with us on +44 (0) 20 3031 6300 or  email us at info@merrillcorp.com.

 

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