Lou Rohman, vice president of XBRL Services, Merrill Corporation | October 25, 2017
Companies that submit financials to the SEC which are prepared in accordance with International Financial Reporting Standards (IFRS) should be aware of a new proposed supplemental XBRL taxonomy for the upcoming mandated SEC XBRL filings, which start for financial periods ending on or after December 15, 2017.
Currently, when SEC IFRS filers select XBRL tags that correspond to specific SEC financial statement and schedule disclosure requirements, they are found in the U.S. GAAP Taxonomy. However, many of these tags will be moved over to a new Shared Reporting Taxonomy (SRT), which FASB placed out for formal public review through October 31, 2017.
What this means for SEC IFRS filers is that when searching for an XBRL tag, they will search not only in the base IFRS Taxonomy, as published by the IASB, but also in the new SRT taxonomy. The SRT is basically a supplement to the base IFRS Taxonomy.
The SRT consists primarily of tags for SEC-specific disclosures. So, when tagging a disclosure that is related to a specific SEC reporting requirement, it’s likely the appropriate tag will be found in the SRT rather than the base IFRS Taxonomy. I think IFRS filers will welcome the addition of the SRT because it provides the appropriate tags for their specific SEC financial statement and schedule disclosure requirements.
What's in the Shared Reporting Taxonomy, or SRT?
The proposed SRT consists of 442 tags, primarily for:
- Certain schedules required by SEC Regulation S-X
- Condensed consolidating financials for guarantors
- Oil and gas disclosures
- Various elements with broad applicability
A note of caution for US GAAP SEC filers: 434 of the 442 tags in the SRT will be removed from the US GAAP Taxonomy and placed into the SRT. A possible concern is that US GAAP filers will need many of these 434 tags to tag their disclosures, but they will no longer exist in the US GAAP Taxonomy. This may sound like a problem for US GAAP filers, but I expect it won't be. The reason is that for most tag searches by US GAAP filers, the tags from all applicable taxonomies (not just the US GAAP Taxonomy) are visible for selection. After this change, the SRT will be included as one of the applicable taxonomies, so the 434 tags will still be visible for searches by US GAAP filers, even though they aren’t part of the US GAAP Taxonomy. It’s likely that most US GAAP filers won’t notice the change.
Additional Tags Need to be Added to SRT
SEC registrants and consumers of the XBRL should review the proposed SRT to determine if it meets their needs, especially since I expect the SEC will approve the SRT for the upcoming IFRS filings for financial periods ending on or after December 15, 2017. At the very least, be aware of the importance of this new taxonomy.
At Merrill, we have been combing through the proposed SRT in detail and we believe there are more tags that should be added to this new taxonomy. Merrill’s XBRL team understands the SRT very well and has provided advice and comments to the FASB, including a listing of the additional tags which we suggest be added. Our recommendations will help improve the quality of SEC filings for our IFRS clients, as well as other registrants, in the ongoing effort to make the XBRL filings as accurate and consistent as possible.