Proposed SEC rule mandates phase-in of Inline XBRL
On March 1, 2017, the SEC passed a proposed rule requiring Inline XBRL as the format for submitting financial statements to the SEC. The requirement will be phased-in for operating companies, with a likely start in 2018 for large accelerated filers, followed in 2019 for accelerated filers, and then completed in 2020 for all remaining filers, including all IFRS companies. For more detail on Inline XBRL, see Merrill Corporation's recent Dimensions article "Inline XBRL is Here: What You Need to Know".
Although XBRL has been a requirement of the SEC since 2009, the proposed rule means that instead of submitting an HTML document separately from the XBRL instance document, the two must be combined into a single document that contains the benefits of both. The new document will contain the computer-readable XBRL tagged data, plus the human-readable HTML which is the traditional format that is pleasing to the eye. You might say that with this new format, you can have your XBRL and read it too.
Inline XBRL is becoming a global standard
Interestingly, the year 2020 is not only when the SEC’s inline program is expected to be fully in place, but 2020 is also the year that the European Union has chosen to require certain listed companies to start submitting financial statements using Inline XBRL. The European Securities and Markets Authority recently selected Inline XBRL as the single electronic format for EU companies to submit annual financial reports.
Adding to this movement is the fact that many other XBRL programs, such as in the UK and Japan, already have been submitting financials using Inline XBRL. It’s easy to see that Inline XBRL is becoming the standard format for regulators to receive financial information.
Continuation of SEC’s commitment to structured data
The SEC has been increasing its commitment to structured data as a filing format, so this proposed requirement for Inline XBRL was a likely next step. The announcement continues the SEC’s advancement toward a more progressive way to provide financial information – a way in which analysts and investors are now beginning to consume the data...and demand it.