Merrill Experts: Financial Services: February 2012

Thursday, February 23, 2012

This Week in XBRL: Further your XBRL Education

XBRL is a broad topic to master. We have been perfecting and mastering the language for years, and we are still finding new information each day. So, to help our readers get a better understanding of this concept, we've tracked down some of the best articles online to help further your XBRL education! We highly recommend checking these stories out. In addition to our exposition on the subject, you’ll be an expert in XBRL by the end of the day!

For us, XBRL can be an incredibly interesting topic, but we understand that the feeling isn’t shared by everyone. Our friends over at Hitachi found a way around that problem, and even though the article was written in 2008, it is still making the rounds in the financial industry today.

You’ll be about halfway through this article before you realize that the extended discussion of baseball statistics is actually an obtuse method of explaining the merits of XBRL analysis. The story does an exceptional job of explaining the benefits of analyzing your XBRL reports, and was one of the first stories to do so.

For a more serious tone, there’s this piece by XBRL USA. Going into painstaking detail, XBRL USA’s write-up of Edgar XBRL definitions is one of the more informative pieces of XBRL education available on such a narrow topic. Anyone seeking to improve their understanding of XBRL would do themselves a favor by diving into this.

Of course, we have also covered a myriad of XBRL topics over the past two years on this very blog. Click on any of these links to check out some of our best single-topic explorations of XBRL concepts.

Dodd-Frank Legislation

Benefits of Open Data

Governance Risk Compliance Software

Improving SEC Filing Submissions

Unusual Uses for XBRL Tagging

Learning from SEC Filing Reviews

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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.

Friday, February 17, 2012

Explaining Dodd-Frank

We have sweepingly referred to the Dodd-Frank Act a few times in the past, but we haven’t yet taken the time to explain exactly how this legislation could affect your business. Dodd-Frank is large and complex, and includes a few proposed rules that could severely alter your compliance and reporting methods. At its most basic, Dodd-Frank requires the registration of several market areas that were not previously monitored, including: Large Traders, Private Equity Funds and their advisers, and Swap or Derivative participants. In this week’s blog, we’ll explain a few of these concepts in more detail.

Swap Registration

Swap registration would require security-based swap dealers and major security-based swap participants, such as clearing houses, to register with the SEC and provide certain basic information. Currently, the swap-based security market, also known as derivatives, is not monitored or regulated. Though this rule has not yet taken effect, the Dodd-Frank Act requires registration and potential oversight of the securities swap market. The specific date for potential final rule is unknown. The SEC has already released proposed forms as an indication of what filers may be required to file when mandated by the SEC.

Form PF

You may be required to file a Form PF, if you are registered or required to register with the SEC as an investment adviser; or you are registered or required to register with the CFTC as a CPO or CTA and you are also registered or required to register with the SEC as an investment adviser. You must also manage one or more private funds, and you and your related persons collectively had at least $150 million in private fund assets under management as of the last day of your most recently completed fiscal year.

As usual, the world of financial compliance is a complex and ever-changing animal. To stay on top of the most recent changes, check our Compliance Service News page, and the official SEC Anouncements.

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Friday, February 10, 2012

This Week in XBRL: Last Year’s Concerns are This Year’s Solutions

In the latter half of 2011, the predominant topic of discussion in the XBRL world was whether or not the language would be picked up for use in federal expense reporting. The main arguments in favor of its adoption centered on the transparency and simplicity of such reports.

We’re barely two months into 2012, and these headlines are popping up again, albeit in a more positive light.

After widespread support in 2011, Congress has proposed a handful of bills calling for the use of XBRL in government finance reporting. While none of these bills have become legal mandates, yet, the federal government has already begun tagging expense data with XBRL. Perhaps the most interesting angle of this story, though, is what these efforts suggest for the near future.

In a recent AccountingWeb interview, IMAXBRL chair Brad Monterio had this to say:

"There is no reason that the benefits of XBRL should be limited to public companies and external compliance reporting," Monterio said. "XBRL streamlines and automates information sharing. It is platform independent. It helps bridge the gap between systems in an organization. Data from different systems within the organization can be viewed and analyzed more easily through XBRL.

"Companies of any size and not-for profits of any size can realize real efficiencies and major cost savings through data sharing internally where information is presented in an XBRL format.

Monterio was also quick to point out that the reporting system has already seen wide success in state governments, and even on a nationwide level in some European and Asian countries. It seems that the high benefits of XBRL reporting are starting to make an impression on a global scale, and we are excited to see how high our favorite language can go.

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Friday, February 3, 2012

Last Year in XBRL: A Launching Point for the Future

Here on the Merrill Corporation Financial Experts Blog, we’ve been writing about XBRL advances since 2010, and a lot has happened in that time. Last time, we began looking back over the past year to see how the XBRL landscape has changed, and where it is going. So, journey back with us, and let’s take a look at a year’s worth of XBRL data and analysis.

What is possibly the most significant event in XBRL last year occurred at the 23^rd annual XBRL International Conference. It was here, on October 26^th, that XBRL International announced the first public draft of the XBRL Abstract Model. This tool was designed to give companies and organizations a wider range of tools to make better use of the XBRL language. The successful launch of this model put into place the foundation for dozens of organizations to build innovative uses for what was initially seen as a nuisance requirement.

In the last two months of the year, XBRL was thrown into the spotlight once again, as political groups discussed its use for government financial reporting. The language, it was thought, could bring federal reporting into a much more transparent light. This possible use saw wide support from CPA’s, and made ‘XBRL’ a common phrase for political writers.

So, where does this leave us?

Throughout 2012, we expect to see XBRL take up more and more space in federal discussions. All signs from last year’s data point toward government agencies adopting XBRL for government reporting. It’s a decision that made sense in 2011, and one that makes sense now. With one, universal, reporting system, any agencies, companies, and investors can easily acquire the data they need to make decisions.

We also think that a lot of 2012 will be spent writing about incredible new innovations in the technology. At this point, most companies are at peace with XBRL, or at least they have learned how to use it. We would like to see more financial institutions explaining the benefits and perks of the language, but those stories will likely come in behind more sensational news.

XBRL has been a wild ride, so far, and we’re looking forward to sharing the next year of the journey with you.

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Wednesday, February 1, 2012

Last Year in XBRL: Off to a Great Start!

Here on the Merrill Corporation Financial Experts Blog, we’ve been writing about XBRL advances since 2010, and a lot has happened in that time. Over the next weeks, we are looking back over the past year to see how the XBRL landscape has changed, and where it is going. So, journey back with us, and let’s take a look at a year’s worth of XBRL data and analysis.

In January of 2011, many companies were recovering from their first foray into XBRL tagging. According to data at the time, 50% of surveyed companies had no plans in place to meet the required 2011 deadline, and later data would show similar numbers of disappointment in the system.

XBRL made some of its first national headlines in March, when it was featured at the South By Southwest Conference in Austin, Texas. The conference feature focused on XBRL’s promises of transparency and public data.

May of 2011 saw some great innovation in the XBRL space, with developers in India planning ways of using the tagging process to improve efforts to quell an exploding crime rate. The software would see a series of other innovative uses over the coming months.

Over the summer, XBRL requirements increased. Many companies began questioning whether or not the complicated mandate was worth the time and effort it required. “This is only the beginning of the XBRL era,” said a July FierceComplianceIT article. “In the second year, each amount in the notes and financial schedules must also be tagged. So the process will continue for at least a few years.”

Join us for our next installment of Last Year in XBRL, where we’ll look at the tail end of 2011, and how the final advances of the year set the stage for this year’s financial climate.

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