XBRL & Taxonomy Changes

In our continued effort to share XBRL-related happenings from places ranging from hearing rooms to music festivals, we offer some of the latest news from the SEC on this topic.

Because the the Financial Accounting Foundation assumed responsibility for updating taxonomy in order to link better with accounting rules (taking over XBRL US), 2010 was an off year for updating taxonomy changes. This means that the 2011 document represents two years worth of changes, and in those two years, a number of tag problems have been identified.

The SEC published a summary of the changes, as did the Financial Accounting Standards Board.

As one organization stated, the SEC wants companies to use the new taxonomy to bring more consistency to the selection of tags and reduce the number of extensions. But oddly enough, the SEC is not explicitly requiring companies to use the 2011 taxonomy for their 2011 XBRL submissions.

We are heavily in favor of as much uniformity as possible when it comes to tagging in XBRL. With the requirement of all open-end mutual funds to file the Risk/Return Summary section in XBRL format as an exhibit, as well as publish the XBRL files to the fund’s website (when one exists), one of the most important endgoals has been increased transparency, which is what these changes will help accomplish.