This Week in XBRL: The End of Limited Liability Approaches

Until now, many companies reporting in XBRL fell under the SEC’s limited liability rule. This rule essentially granted a reporting company a certain level of forgiveness for a period of 24 months following their firstXBRL-compliant report. The rule was created as a method for companies to learn from XBRL reporting failures without punishment.

For companies that filed after June 30, 2009, this will be the first reporting period without that safety net.

KPMG has a few more details:

XBRL-tagged financial information submitted after the provisions expire will be considered filed and not furnished and therefore be subject to the same level of liability as other information included in the registration statement or periodic report that includes the XBRL instance document. Companies affected by the expiration should carefully evaluate its impact and discuss this matter with their audit committee, legal counsel, and other relevant parties.

We expect that many more companies will be making an effort to contact outside agencies to ensure the accuracy of their reporting. KPMG also lists several of the largest changes to the 2011 taxonomy, adding a further level of complexity to this quarter’s reporting.

Updates for Recent Accounting Standards. The updated taxonomy includes elements for new accounting guidance recently issued by the FASB. In total, the taxonomy adds elements for 17 recent accounting pronouncements.

New Industry Elements. New specific elements for the airline, entertainment, franchisor, and agriculture industries are included.

Cash Flow and Income Statement. New elements, many of which are frequently used extensions that were identified by the FASB, were incorporated into the taxonomy. 

Comprehensive List of Text Blocks. Text blocks are used for tagging a group of information, such as a footnote, in one tag even though additional tags may be necessary for individual facts within the group. New text blocks have been added. The FASB amended the labels of all text blocks to include an indication of their intended use based on the type of tagging with which it corresponds in the SEC rule.

For those companies looking at their first unprotected XBRL filings, we have a few services you may want to consider looking at.

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Merrill Corporation is proud to offer XBRL Complete, a suite of services that meets - and has options to exceed – the mandated requirements for XBRL for mutual funds. For more information, please click here or call 866-367-9110.