Merrill Experts: Financial Services

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

2012-02-10T12:51:00.000-08:00

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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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.

Last Year in XBRL: A Launching Point for the Future

2012-02-03T12:10:00.000-08:00

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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Last Year in XBRL: Off to a Great Start!

2012-02-01T12:05:00.000-08:00

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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This Week in XBRL: Compliance Among Last Concerns of CEO’s and CFO’s

2012-01-20T10:48:00.000-08:00

Earlier this month, researchers at Compliance Week came upon a 2011 Forrester white paper in which “business decision makers” were asked to rank their primary concerns for the upcoming year. The universal thread that connected decision makers’ responses was a general lack of concern for compliance and government regulations.

“When Forrester asked business decision-makers from North American large enterprises to list their company’s top priorities for the coming year,” the report states, “complying with government regulations and requirements was an uninspiring 10^th on the list.” This put compliance well into the lower half of a list of 18 concerns which also included

Grow overall company revenue
Acquire and retain customers
Lower the firm’s overall operating costs
Improve your customer relationships and
Expand into new geographic markets

It’s clear that growing revenue and acquiring customers should be top priorities for CFO’s – and indeed, both options ranked in the top three choices – but CFO’s should also be aware of how significant a concept like compliance is in those areas. Noncompliance can lead to massive fines, loss of license, and countless hours of lost time, so there is no reason for CFO’s and other executives to be so dismissive of it.

Other surprising statistics from the report showed that a total of 50% of executives had no plans or interest in pursuing software designed to regulate and monitor compliance. Strangely, the report also showed that up to 58% of executives lacked confidence in their company’s ability to handle compliance challenges in three key areas: technology, processes, and people.

What do you think are the take-aways from this kind of information? It seems counter-intuitive for executives to accept that their company is unprepared for compliance, but that they don’t consider it to be an area of concern. Are executives poorly informed about compliance risks? Do they lack a fear of reprisal? Tell us your thoughts in the comments below.

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This Week in XBRL: “We’ll Make it Better, the Second Time Around”

2012-01-13T10:02:00.000-08:00

For filing publicly-held companies, XBRL has become an unavoidable part of financial reporting. Filers have had varying opinions ofthe tagging language, but the real question is whether or not XBRL has actually succeeded in simplifying the reporting process. Seeking the answer to that question, FERF asked members of Financial Executives International to report on the language’s ease of use during their second filings. The FERF survey found responses from 321 executives at 300 different companies.

Here are some of the survey’s answers, as compiled by CFOWorld and a FERF press release.

85% of large accelerated filers found their second use of the language to be “somewhat or significantly easier” than their first.
90% of Tier 3 filers and 72% of large accelerated filers reported that XBRL slowed their process by one or less than one day.
6% of the largest filing companies use outside help during peak reporting, and 22% of the smallest companies do so.
XBRL was considered the ‘biggest bottleneck in reporting function’ by 4% of small companies, and 45% of large companies. Alternatively, 26% of small companies felt that the review process was the biggest bottleneck, where only 16% of large companies agreed.
40% of Tier 1 and Tier 2 companies felt that XBRL had some significant impact on their ability to report efficiently.
Of those, the majority felt that XBRL tagging and slow turnaround from XBRL printing/service providers held them back considerably.

So there is good news and bad news from FERF’s survey. Nearly half of reporting companies still see XBRL as a major hindrance to their financial reporting, and many are having problems with their outsourcing solutions.

More optimistically, nearly every company agrees that XBRL is getting easier to use. More importantly, Merrill Corporation is still here to help. As financial experts, and masters of XBRL, we have solutions in place to simplify, accelerate, and analyze your XBRL tagging process. We have been working on the cutting edge of XBRL reporting since 2009, in partnership with XBRL US and the Consortium of Filing Agents and Software Developers. Contact us for more information on XBRL Solutions.

Title adapted from lyrics for ‘Step by Step’ written by Jesse Fredrick and Bennet Salvay.

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This Week in XBRL: What Can Open Data Do for Us?

2012-01-06T07:03:00.000-08:00

In the financial sector, among many others, experts all seem to be pushing XBRL use onto the government. We’ve already looked at some of the most obvious business benefits to the language, but there is more to it than that. As it turns out, government adoption of XBRL has far-reaching benefits to the everyman business-owner. Over on the Huffington Post, crisis management specialist W. Stephenson has come up with a list of obvious benefits XBRL could bring to government offices.

Stephenson’s article is well-worth reading, as he explores a number of benefits that other XBRL writers may have overlooked. This week, we’ll look at a few of his points, and provide our responses to his opinions.

“[XBRL] could radically reduce government costs by increasing inter-agency cooperation…”

As much as we write about the efficiency of XBRL, it really can’t be stated enough times. And, in this case, the concept really includes a whole bundle of benefits. Open, standardized data and reporting means a reduction in errors, a reduction in redundancy, and a reduction in cooperation barriers. There are very few aspects of agency documentation that wouldn’t benefit from such a system.

“Reducing the cost to businesses of complying with government regulations is a key concern…”

When the Netherlands approved a Standard Business Reporting initiative in 2007, the cost of business compliance dropped 25%. A move toward more government data API’s, on a city or state level, could be a step in the right direction, and according to ‘API Evangelist’ Kin Lane, it is already happening. “All of us API and data guys have all been screaming for city, county, state and federal government to open up their data via APIs for years now,” Lane says in a recent blog. “In 2011 I would say many government officials listened, and opened up almost 100 government APIs…”

“…opening the data to the public means that individuals…can fill the gap…”

An interesting topic that Stephenson brings up is crowd-sourcing. He argues that transparent reporting could give citizens and business owners an opportunity to spot potential improvements that government employees are too busy to notice. If government data isn’t being presented in a way that is easily readable for the average business owner (if it’s being presented at all), it can be exceedingly difficult for that owner to suggest improvements to the system. With government offices reporting data in a single format, such as XBRL, we can get closer to a unified system of discussion and improvement.

“…smart officials realize that public confidence must be earned through transparency.”

At the end of the day, business owners and citizens want to know what their tax money is going toward. Published XBRL reports would make that knowledge public, which could hopefully dispel some of the public’s current mistrust.

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This Week in XBRL: What Are the Real Benefits of XBRL?

2011-12-30T10:28:00.000-08:00

Over the past several weeks, we have been broadly discussing the benefits of XBRL, and the SEC’s campaign to sell corporations on them. However, it's about time to discuss what those benefits actually are. Today, we’re going in-depth, and laying out exactly why XBRL is a diamond in the rough.

Benchmarking

Among the most obvious of XBRL benefits is the ability to compare your company’s data easily with that of your competitors. You can analyze numbers from “suppliers, customers, shareholders, stakeholders…” and more, all with the tools already in your possession. There is really no reason not to make use of filings for this purpose.

Risk-Analysis

We’ve already pointed out how big Governance, Risk, and Compliance (GRC) is going to be in 2012, and XBRL filings can help shine a spotlight on your company’s weak links. To quote David A. Frankel’s December 12th interview, “[GRC] across the enterprise is a huge issue for companies right now -- and the solutions all revolve around harnessing intelligence from the data they and comparable companies are producing with their filings.”

Transparency

As we’ve stated above, and as Frankel says many times throughout his interview, the biggest single benefit of XBRL is providing companies with a tool to better investigate themselves. The penalties for GRC failings can be severe, and companies with usable XBRL data will be able to maneuver out of their paths before it is too late.

Unfortunately for many companies, the real benefits of XBRL won’t become clear until they approach the language with open arms and a critical but open mind. “Complying with SEC disclosure mandates does not necessarily yield useful results,” Frankel says, “just compliant filings.”

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This Week in XBRL: FERF Study Gathers XBRL Opinions

2011-12-23T11:43:00.000-08:00

A recent study from the Financial Executives Research Foundation (FERF) presented data on the opinions of 300 public companies in regards to XBRL reporting. The reported concerns are very much in line with what one would expect, with efficiency and liability being the among the most common. Below, we’ve pulled some of the most significant pieces of data from the report.

The most complicated parts of the XBRL process, according to Tier 1 companies, are education and the review process.
Legal liability remains the biggest concern for most companies, with cost-benefit in a close second.
Most of the responding companies are skeptical that investors are actually using XBRL data.
Companies are currently focused on improving the efficiency of the tagging process, and are concerned that they lack the resources to complete the process on time.

The report also found that companies have varying opinions based on their size.

Larger companies are more concerned about presenting two different sets of data (HTML and XBRL) to investors than small companies are.
Smaller companies are less concerned about auditor involvement.

Perhaps most interestingly, as pointed out in this Data Interactive synopsis of the report, the spread of methods that Tier 1 companies are using to handle XBRL reporting is vast.

Among companies that outsourced the process, 15 percent spent less than 40 hours on XBRL, 31 percent spent 41 to 80 hours, 12 percent spent 81 to 120 hours, and 32 percent spent more than 120 hours. The numbers aren’t significantly different for companies that handled the XBRL process internally: 8 percent spent less than 40 hours, 31 percent spent 41 to 80 hours, 23 percent spent 81 to 120 hours, and 38 percent spent more than 120 hours.

It may be discouraging to see such opposition to XBRL reporting, but we have confidence that the SEC’s efforts to promote the benefits of XBRL will take hold among reporting companies.

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This Week in XBRL: December Headlines

2011-12-16T13:38:00.000-08:00

It’s that time of year again: snow is falling, the wind is crisp, and corporations are asking tough questions about the future of finance reporting. XBRL has been at the top-of-mind for many finance industry analysts, and that means a lot of great news and discussion for the language. Here are some of the highlights.

XBRL As a Boon, Not a Burden.

As Ben Cole, at Tech Target, points out, the coming of XBRL wasn’t celebrated by everyone. “If you were to ask filers, some might say the fact that the SEC is mandating XBRL-tagged filings is a hardship, as they have the burden of the costs for compliance,” he says in this week’s article, How the SEC's XBRL Tagging Mandates Can Help Your Bottom Line. He interviewed XBRL supporter David A. Frankel, who responded by pointing out the intrinsic benefits of XBRL, including a greater understanding of your company’s risks, and the power to take better, more profitable risks in the future. Click here to read the full interview.

Finding Larger Uses for XBRL.

“Since the SEC issued the Interactive Data Mandate in 2009, the focus for companies has been to conquer the learning curve and simply become compliant,” says Accounting Today’s John Swirsding. “…understanding where XBRL goes from here presents companies with a number of new opportunities and risks.”

Swirsding believes that public and private companies can make use of XBRL in three key ways that will lead to a larger, global infrastructure, which he compares to the growth of the internet over the past thirty years. The areas Swirsding sees as the next frontier for XBRL are Legislation, Liability, and Leverage. By utilizing the infrastructures already in place, he argues, companies can reap huge benefits from systems they are already required to know.

FASB Talks XBRL.

At the National Conference on Current SEC and PCAOB Developments on December 6, FASB Chairman Leslie Seidman spoke about international accounting standards and private company reporting.

These are two of the most important issues facing our profession, our capital markets, and our companies, so I think it’s important for us to have a frank, constructive discussion of them… The reason we have accounting standards is to provide information that is useful to existing and potential investors and other users of financial reports in making decisions about whether to provide resources to the company or nonprofit organization.

Seidman explained his views on the two topics, and how reporting structures like XBRL are transforming the world of business and finance. The full transcript of Seidman’s address is here, and is well worth reading.

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This Week in XBRL: What’s Coming Up in GRC?

2011-12-08T06:45:00.000-08:00

Compliance 360 and MarketWatch have put together a list ofGRC trends that are likely to affect financial reporting in 2012. The full list is extensive, and worth reading, but we will summarize some of the highlights below, along with some of our own thoughts, opinions, and commentary.

Compliance Proof WillBecome Important.

“Historically, regulators have been satisfied with companies that have implemented compliance programs, but now they want proof that the programs are actually working.” Regulatory bodies have wised up to the fact that having compliance procedures in place, and those procedures actually functioning, are two separate concepts. Analysts predict that 2012 will bring about data and process distillation, which will test the effectiveness of compliance procedures.

GRC to be Used asBrand Strategy.

Compliance failures, ethics charges, and public court battles have become common knowledge in recent years, thanks to improving news and communication technology. As more and more consumers become aware of a brand’s compliance issues, board members will become more and more aware of the impact of their GRC actions. Compliance 360 predicts that smart company owners will promote their strong compliance record as part of a branding strategy.

Analytics Will Riseto the Top.

One of the important secondary features of software and languages like XBRL is the staggering amount of data that is collected and organized during compliance processes. Some analysts think that GRC software can be used for the same purpose, resulting in more effective compliance efforts. “From the board down, GRC users need to see trend lines and correlations to identify and address root-cause issues before auditors come calling. As examples, the additional insight corporations can glean by linking training programs to the types of issues received via a whistleblower hotline, or mining various systems to determine how to change audit plans for the next cycle, can be highly valuable.”

XBRL and compliance go hand-in-hand, and it will be important for any in the financial industry to keep an eye on these developing trends. Early actions can get you a few strides ahead in the compliance race.

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This Week in XBRL: A Bright Future for XBRL

2011-12-02T13:51:00.000-08:00

“With Year 3 of the SEC's mandate rolling on,” begins a recent CPA Success article, “nearly all public companies are filing their financial reports via XBRL, bringing us this close to realizing the data tagging language's long-promised potential.” If there is a success story buried in this decade’s financial world, XBRL is the likely hero. The reporting language has already brought efficiency to most of the country’s corporations, and is now quickly gaining a following on a federal level.

CPA Success reports on three signs pointing toward the language’s destiny.

Auditors are starting to pay close attention as they search for ways to help their clients make the switch to XBRL through services like assurance, knowledge-sharing and training.

The MACPA is serving as a case study of sorts for how private companies can use XBRL. In fact, the association has been asked by the Financial Accounting Standards Board to work on a separate XBRL taxonomy for non-profit organizations.

Even governments are getting into the act. The state governments in Nevada and Oregon are setting the pace, and others -- including Maryland's -- are testing the waters to find out if XBRL can boost transparency and accountability at a governmental level.

Of course, with great power comes great responsibility. A host of new regulations and best practices will accompany XBRL into the next few years, and a lot of them, according to FASB chief of taxonomy development Louis Matherne, will rely on CPA’s.

As always, Merrill Corporation will continue to monitor any changes to XBRL reporting best practices, to ensure that our services remain convenient, accurate, and above all else, compliant.

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This Week in XBRL: Site Outages, Congress Support, and IFRS Goes Global

2011-11-25T17:02:00.000-08:00

XBRL has had a rocky week! Despite a growing increase in the use and spread of XBRL, experts are starting to see cracks appear in the automated solutions that some companies in the UK are already using.

For several hours yesterday, many UK businesses were unable to access http://www.xbrl.org, or any of its sub-domains. For those companies, this meant that their XBRL software was unable to connect to online taxonomies, and Corporation Tax returns could not be filed. Software can be configured to reference locally-stored taxonomies, but the process is complex and would require downloadable taxonomy packages. For now, current best practices require XBRL software to reference the online document, or companies can rely on XBRL experts like Merrill Corporation, who are less effected by such outages.

When the site outage dust cleared, discussion this week turned to the likely spread of IFRS through more global jurisdictions. Already popular in the UK, Brazil, and Japan, most analysts believe the SEC will support the International Financial Reporting Standards by the end of the year, and that means a change in the way corporations report business.

Finally, another major talking point came this week when AICPA reported on the numerous bills in Congress calling for the use of a reporting system like XBRL.

[The Standard DATA Act] is certainly not the first bill that calls for the use of XBRL. Earlier this year, President Obama signed the Children and Family Services Innovation and Improvement Act into law. This law requires that the Department of Health and Human Services designate a common data reporting standard, i.e. XBRL. Specifically the law is aimed at standardizing the reports that the states submit to the federal government on how they spend federal funds for child welfare programs.

AICPA also pointed out the Digital Accountability and Transparency Act (DATA Act), which is still under consideration. All of these pieces of legislation point toward the adoption of XBRL reporting for congressional purposes.

As always, Merrill Corporation will continue to monitor changes in the XBRL environment, to be better prepared to provide your XBRL solutions.

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This Week in XBRL: CPA's Believe XBRL is a Perfect Fit for Government

2011-11-18T11:30:00.000-08:00

Continuing our theme of XBRL use in government, we are looking this week at an article published by the Maryland Association of CPA’s.

Portions of the federal government have already adopted XBRLfor financial reporting. The MACPA hopes that this trend will continue. They interviewed Hudson Hollister, legal council for the House Committee on Oversight and Government Reform.

"It should be possible," says Hollister, "for citizens, watchdog groups, media, and even the appropriators in Congress to use all of this spending data to judge whether government is working for them or not."

The solution, he and [California Representative Darrell Issa] believe, is a single platform for federal spending information, driven by a consistent, government-wide set of data reporting standards.

Sound familiar, XBRL fans?

MACPA believes that XBRL could allow anyone seeking financial information to find transparency in the federal government, something which many feel has been lacking up until now. Both Hollister and MACPA point out that the DATA Act would require the government to designate a reporting standard, and that XBRL would be the best fit for that purpose.

It is not hard to see how a system as widespread, versatile,and efficient as XBRL could be beneficial for a project as large as this, but only time will tell what the government decides.

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This Week in XBRL: How Can XBRL Improve Government Efficiency?

2011-11-14T14:29:00.000-08:00

“I’ve heard nothing in early discussions about the so-called supercommittee charged with finding more than $1 trillion in budget cuts to indicate that it is considering structural changes in how the government operates,” says W. David Stephenson of Stephenson Strategies. “That’s a terrible omission.”

In a lengthy commentary on Federal Computer Week, Stephenson explains that the Federal Government’s reporting systems are too antiquated to properly function.

There’s little hope for long-term savings if we continue to run the government using obsolete 20th-century methods. That’s why the final package of cuts should include a management plan that builds on the proposals by the GOP and the Obama administration to radically alter the way government agencies report on their operations and process information from corporations.

XBRL is one such solution.

XBRL, in its most basic essence, is a method to preserve the context of given pieces of financial data. This allows that data to move seamlessly from one form to another, preventing the need for it to be entered over and over again, costing time and money.

It would let employees better coordinate with suppliers and customers to improve efficiency and earn public confidence through transparency…In addition, regulatory reports could be generated automatically from that same data, which would achieve the Republican goal of cutting regulatory compliance costs.

An XBRL-based reporting system is already in use in Australia and the Netherlands, according to Stephenson, allowing businesses to file a single XBRL report which is automatically filtered through to relevant agencies. Because American businesses are already filing XBRL reports with the SEC, it seems obvious that government adoption of the system would be the best step for financial transparency.

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This Week in XBRL: GRC Software ROI

2011-11-04T21:14:00.000-07:00

There has been no shortage of publications this week regarding the umbrella concept of GRC, or Governance, Risk Management, and Compliance. In today’s blog, we’ll look at an analysis of the return on investment for GRC software, and explore how it may relate to your business.

Analysts at FierceComplianceIT.com have taken a look at the potential returns of a GRC initiative, something which has been somewhat dismissed until now. “Regarding GRC justifications, the returns can be somewhat hard to pin down, though I wouldn't say they are completely intangible,” the article reads. “The justification is usually there, it just has to be articulated in terms that key decision makers can understand.”

With help from Corporate Integrity’s Michael Rassmussen, they compiled a list of the most obvious ROI wins for using GRC software. One of these returns was a significant reduction in reporting errors, as high as “30 percent to 40 percent.” Other researched companies were able to save time and money by eliminating the need to manually update and compile paper manuals detailing compliance regulations.

“Lowering your overall risk creates a more stable environment … customers don't like to deal with unstable organizations,” said Stephen Fried, CISO and Vice President at People’s United Bank, “If you have a failure in your risk management program, it will affect your organization's ability to operate effectively.”

Of course, XBRL solutions, like MerrillCorp’s XBRL Complete, are one such way to control GRC in your financial reporting. XBRL Complete is an end-to-end service offering producing accurate and reliable data in XBRL format supported by dedicated XBRL experts, regulatory expertise, four decades of financial services experience, and a cost-effective and efficient process

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This Week in XBRL: XII Releases XBRL Abstract Model

2011-10-28T08:32:00.000-07:00

The 23rd XBRL International Conference began on October 25^th, and has obviously been one of the largest talking points in the industry this month. Headed by XBRL International, the conference is used a platform for some of the largest innovations in the eXtensible Business Reporting Language, and this year was no different.

XBRL International (XII) is a group that should be familiar to anyone dealing with XBRL reporting. Founded in 1998, the group was formed to improve and promote XBRL. Now, they are publicly delivering on that promise.

On October 26^th, XII released the first public draft of the XBRL Abstract Model at the conference. According to the press release, published on MarketWire,

The abstract model has been developed by XII's Abstract Modelling Task Force (AMTF) as a means of establishing a common framework for communicating and understanding the XBRL technology. The abstract model provides a conceptual framework for understanding XBRL and gives developers a strong foundation for implementing XBRL solutions.

XII hopes that this model will eventually provide developers with more tools to utilize the language. The bulk of the model is comprised of “use case diagrams, class diagrams, object diagrams, and sequence diagrams,” according to the release.

This first draft is intended to give the public opportunities to comment on the model, and to provide feedback that will bring XII closer to a functional Abstract Model. Merrill Corporation is always supportive of initiatives to broaden the reach of the XBRL reporting language, and we are happy to see XII’s initial success.

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This Week in XBRL: The End of Limited Liability Approaches

2011-10-21T11:20:00.000-07:00

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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Volcker Rule Draws Industry Criticism

2011-10-13T14:06:00.000-07:00

Back in March, we wrote a blog about a headlining scandal that threw Goldman Sachs into courts against the then-recently-created Volcker Rule. Since then, not much has been said about the legislation, until this week, as regulators released a proposal that was, “so complex that banks blasted it as unworkable and consumer groups dismissed it as too weak.”

The proposal has received almost universal opposition, due mainly to the unacceptable level of complexity in the document. Reuters interviewed American Bankers Association Chief Executive Frank Keating for his opinion on the proposal:

"Only in today's regulatory climate could such a simple idea become so complex, generating a rule whose preamble alone is 215 pages, with 381 footnotes to boot…How can banks comply with a rule that complicated, and how can regulators effectively administer it in a way that doesn't make it harder for banks to serve their customers and further weaken the broader economy?"

Consumer interest groups like Americans for Financial Reform also commented in the article, suggesting that the rule heavily favors bank flexibility over consumer protection. Reuters quotes them as responding, "Unfortunately, the proposal issued today falls well short of what the Volcker Rule could and should achieve.”

Other opposition states simply that the rule would require too many banks to fracture into smaller businesses in order to remain competitive. Many analysts are predicting that companies and investors will both fight for the rule to be dampened in those areas.

The public has until January 13, 2012 to comment on the proposal, giving companies plenty of time to suggest beneficial changes. We predict a lot of attention being paid to this legislation over the coming months.

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This Week in XBRL: IMA(R) Pushes for DATA Act

2011-10-06T09:28:00.001-07:00

In a continued effort to educate on the development of XBRL technology in industries such as financial services (and beyond), Merrill Corporation will share articles and columns published on the topic.

This week, the Institute of Management Accountants (IMA(R)) has distributed a press release showing their support for the use of XBRL in creating government transparency and efficiency through the Digital Accountability And Transparency Act (DATA Act). IMA(R) believes that XBRL will lend efficiency and accuracy to the government’s financial reporting. Part of this support is based in the Child and Family Services Improvement and Innovation Act, which requires states to report spending for child welfare to the federal level.

This Market Watch article includes part of IMA(R)’s statement, which they attribute to the Hon. Kim Wallin:

By requiring the Secretary of the Department of Health and Human Services to consider XBRL, the federal government is getting the tools it needs to deliver better data -- which will help the Department better administer its child welfare programs and ultimately help states better serve children…We need to know who is and isn't receiving federal aid to more effectively help our children in greatest need. I think it's fitting that the first U.S. law mandating XBRL is helping our government better meet the needs of our most vulnerable children.

We are always excited to see XBRL branch off into larger use, and an application as noble as improving children’s well being is even more cause for celebration. XBRL has proven to be an effective tool in nearly every industry it has been applied to, and we see no reason for it to fall short here.

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This Week in XBRL: Eyes on the Future

2011-09-29T14:59:00.001-07:00

On our Twitter and LinkedIn profiles, we put out a question: “What do you see in store for the future of XBRL?”

Admittedly, tagging systems for financial reporting may not be the most obvious subject for abstract thought, but over the past decade, we have already seen XBRL being adopted for any number of unusual uses. In theory, XBRL tags could be used for any software-based financial purpose:

Now, MarketBrief, a new start-up based in Mountain View, California, promises to publish over 1000 stories per day thanks to its software journalists.

It's easier than it sounds. SEC filings are published in a format called XBRL, or eXtensible Business Reporting Language, much like websites are published in HTML. MarketBrief's software generates articles by extracting key facts from the XBRL data and slotting them into pre-defined sentences.

This NewScientist.com article points out that the only real downside to this reporting software is the lack of humanity. “The result is readable, if dull,” says reporter Jacob Aron, “but MarketBrief will beat a human journalist to the punch every time, as the company claims it takes just three to 20 seconds for it to break a story.” If MarketBrief can iron out the dryness of their ‘software journalists,’ the site could easily become a go-to location for financial news, and that reality isn’t far off.

We cannot say whether or not MarketBrief is making the effort to remove the computer-generated tone of their reporting, but other software clearly is. AI “chatterbots,” like Cleverbot and Jabberwacky use complex algorithms to read and respond to live discussion from human participants. As time passes, the artificial intelligence gets smarter, learning more and more of the eccentricities that differentiate humans from computers. In fact, Cleverbot recently scored a 59.3% success rate on the Turing Test, a method of determining whether or not a speaker is human or software. That means that the majority of people having a chat session with Cleverbot could not tell that they were speaking with a computer.

Will Fortune Magazine replace their reporters with web-crawling software? Maybe, eventually, but we would suggest still picking up the phone if they call.

Do you have thoughts on the future of XBRL in the upcoming decades, share them below.

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This Week in XBRL: XBRL and International Finance

2011-09-22T15:58:00.000-07:00

XBRL has become an industry standard in the states, but until now, its reception worldwide has been mixed. These are a few of the global issues making headlines in the world of XBRL today:

The deadline to meet the newest XBRL taxonomy regulations in India is swiftly approaching, and many experts are still concerned about the unaddressed problems and hiccups in the system. Analyst Sangeeta Singh provides some insight:

There is no updated validation tool that will test the XBRL software developed by various vendors, the project lacks extensions to the glossary of financial terms—known as taxonomy—and analysts and investors are not allowed to download the data in the XBRL format, they add. By 30 November, around 30,000 companies with a paid-up capital of Rs.5 crore [around one million US dollars] and more, or a turnover of at least Rs.100 crore [around 20 million USD], have to file their profit and loss account and balance sheet for the year ended 31 March in XBRL. The ministry [of corporate affairs] missed a deadline of 30 September of implementing the project because both the taxonomy and the validation tool had to be revised.

The MCA hopes to improve financial reporting by adopting the United States XBRL system, but experts in India feel that they are missing the point. Vinod Kashyap, director of NextGen Knowledge Solutions Pvt. Ltd., says “MCA’s attempt of putting up statements filed by companies in PDF form and not XBRL form for public viewing will defeat the purpose of adopting XBRL and will disallow analysis and comparison”

Overall, the experts all agree that there will be some persistent issues with India’s system, but the primary concern now is for the MCA to get the project moving in time for that country’s financial industry to meet the already-set deadlines.

Meanwhile, in Japan, the system is having a much warmer reception. Japan’s financial markets are making a special effort to maintain an internationally-friendly XBRL system.

The country's main corporate companies still utilize pen-and-paper methods for most of their reporting and analysis, according to analyst Makoto Shibata. “[Japan] will develop a taxonomy or standard process…They will experiment with how they can handle and proceed with the process.” Since its introduction to Japan in 2008, XBRL tagging was limited to a few specific needs, but is now being brought into use in accounting, pricing data, and corporate sustainability reports.

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This Week in XBRL: For and Against XBRL Adoption

2011-09-15T16:02:00.000-07:00

Though it has already become an industry standard, there is still some debate surrounding the value of XBRL reporting. This week, two headlining articles made their way around the web, providing alternate views of the reporting system.

Federal Contractors Opposed to XBRL

The House Oversight and Government Reform Committee, chaired by Representative Darrell Issa, has come to the conclusion that federal agencies are still relying on outdated, manual financial reporting, and it is costing them time and money. Among these agencies are the Department of Veteran Affairs, and Homeland Security. Both departments use legacy financial assistance systems and manual processes. Describing the current reporting structure, FierceGovernmentIT.com had this to say, “Manual process are ‘inherently problematic’ since they're slow, inefficient, expensive, and conducive to human error.”

However, federal contractors have been opposed to the adoption of XBRL reporting, despite these obvious inefficiencies. Issa’s committee is supporting legislation that would require those contractors to switch to XBRL reporting.

Issa is sponsor of the Digital Accountability and Transparency Act, or DATA Act, a bill that would among other things legislatively institutionalize a spending monitoring board modeled after the Recovery Board. It would also create a single, government-wide reporting system, with all financial reporting to be done in eXtensible Business Reporting Language, or XBRL, an XML-based metadata schema. The XBRL requirement has proved unpopular particularly among federal contractors, who would have to also adopt it. Many say XBRL is cumbersome and would be a financial burden (FierceGovernmentIT.com).

XBRL to ‘Repair the Last Mile.’

Outside of government conflicts, XBRL has been widely adopted and enjoyed by corporate entities. The reporting method provides a much-needed way to remove the strain, the time, and the financial burden of manual closing procedures.

Things started to gel about three years ago when the SEC began requiring the largest corporations to use XBRL when filing information. Mark Lelyo, Executive Director of Corporate Financial Systems at Time Warner Inc., had this to say about the arrival of the XBRL mandate: "We had an added incentive to find a solution" to the slow and tedious financial reporting process…

…Time Warner claims internal consumers of its financial statements have since gained increased confidence in the accuracy and quality of its financial reporting. Process automation has helped ensure the consistency and integrity of numbers and associated text on a repeatable basis.

Financial institutions and corporate businesses nationwide are extolling the virtues and benefits of XBRL, but federal contractors still insist that the system is too big of a burden to bear. It’s clear that opinions will continue to waver on the issue of this tagging system, but for those that are ready to adopt the future of financial reporting, Merrill Corporation is here.

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This Week in XBRL: Bryant University Hosts 11th Annual XBRL Conference

2011-09-08T16:23:00.000-07:00

Today, XBRL is accepted as the standard for everything from finance reporting to daily news, but has it always been that way?

At the end of this month, Bryant University, in Rhode Island, will be hosting the 11^th annual XBRL Conference. The topic this year is, “Your Clients Begin XBRL Filings Soon - Are YOU Ready?” As one might expect, the conference theme implies the wide-spread use of XBRL, as well as the fact that there have been 10 previous annual conferences. We couldn’t help but wonder what the theme was in the past.

With a little digging, we got our answers.

During Bryant University's first XBRL conference in 2001, the event was organized by Professor Saaed Roohani, who has been said to be at the heart of XBRL since its creation:

One of Bryant’s own, Accounting Professor Saaed Roohani, has been at the forefront of the XBRL movement since the idea was conceived in 1998. At the time, he was one of only a handful of U.S. academicians who researched and taught the then-new standardized reporting language. Roohani recognized its importance in uniting world markets.

The theme that year? The XBRL Educational Resource Center, a website and academic program launched by Roohani.

The theme, and certainly the aesthetic style, of the conference has changed consistently over the years, but the effort to further the spread and education of XBRL has never wavered. We are impressed with Bryant University’s early adoption of XBRL tagging, and are further impressed by their commitment to continue it.

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This Week in XBRL: IFRS Announces Interim Releases

2011-09-01T15:21:00.001-07:00

As part of an update to the XBRL infrastructure of the 2011 IFRS Taxonomy, the IFRS has released a few interim releases in order to keep up to date with recent accounting standard changes.

These interim releases, instead of waiting for an annual Taxonomy update, will allow companies to gain access to new reporting tags. The IFRS hopes that this will prevent those companies from using out-of-date tags. The released tags affect:

Presentation of Items of Other Comprehensive Income (amendments to IAS 1) and IAS 19 Employee Benefits, both issued by the International Accounting Standards Board in June. Only a few weeks prior, the IFRS Foundation also published an interim release to provides tags related to IFRS 13 Fair Value Measurement and IFRS 12 Disclosure of Interests in Other Entities, issued by IASB in May.

These interim releases allow for electronic reporting, another initiative which may lead to a decrease in erroneous tag usage. The IFRS plans to include these interim changes in the 2012 IFRS Taxonomy, due in the first quarter of next year.

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This Week in XBRL: What Makes an XBRL Expert?

2011-08-25T14:35:00.001-07:00

The Global XBRL Team at Ernst & Young is looking for an XBRL specialist. We already have a job, but we thought it would be interesting to see what qualifications are required for the lofty title of ‘XBRL Specialist.’ The job posting begins with the kind of language one would expect:

Candidates for this role need a real enthusiasm for the technical aspects of financial reporting. They should be able to communicate fluently, both written and verbal, to audiences in accountancy circles.

After that, the group gets a little more specific.

The role:

Internationally focused
IFRS-focused XBRL Taxonomy design and review
Tagging of model IFRS financial statements
Analysing and consuming data from IFRS statements in XBRL
Writing and testing business rules
Evaluating software
Training and supporting clients required to report their IFRS financial statements in XBRL
Supporting the IASB, EBA and related international working groups.

What you will need:

A degree educated candidate, achieving 2:1 or above
Qualified accountant (ACA or CIMA) with good exam record
Experience working on the production of statutory accounts in IFRS
Flexibility for frequent international travel
Real technical facilitation experience - advantageous
A real enthusiasm for information technology
Broad experience applied in problem solving
Highly PC literate, with a knowledge of MS-Excel & Word
Assertive and proactive approach to the delivery/implementation of projects
Demonstrable project management experience a real advantage
Real technical facilitation experience an advantage
Strong communication skills written and verbal, communicating at all levels, in a clear, concise and fluent manner as dictated by the needs of the audience.

Intimidated? One thing you may notice with a second look is that very few of these requirements involve XBRL. One would assume that a job posting for an XBRL specialist would ask for someone to be a specialist in XBRL! Perhaps there is a reason for this oversight. Perhaps, XBRL isn’t that complicated after all.

FierceComplianceIT.com has collated a list of ten tips for anyone wanting to be an XBRL expert. The most important tip is number 4.

Recognize that XBRL is simply a different way of expressing the same financial information. - The SEC, HTML and XBRL filing formats are two different mediums for expressing exactly the same information. With the XBRL format, however, you can use automated computer processes to check that information ticks and ties correctly.

XBRL can be a daunting language to approach blindly, and the year two requirements have many companies and consultants scratching their heads. With a little research, a little help, and a little planning, you can breeze through your XBRL filing this year.

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This Week in XBRL: Registration Statements

2011-08-18T12:27:00.001-07:00

For the financial industry, the eccentricities of XBRL are well known. However, as pointed out in this Dodd-Frank.com article, most of those issues are associated with second quarter form 10-Qs. As it turns out, the confusion only increases when it comes to registration statements.

About the only thing that may be perfectly clear is XBRL exhibits are not needed for an initial public offering. Even to arrive at that conclusion requires a tortured reading of Regulation S-K Rule 601(b)(101) and the statement “first is required for a periodic report on Form 10-Q.” Obviously if an issuer is doing an IPO they have never filed a 10-Q.

Confused yet? How about this: according to the written regulations, XBRL is only required for a registration statement that includes a “price or price range.” However, as Jill Radloff points out:

That is almost never the case for a resale registration statement so one may be tempted to conclude XBRL exhibits are not necessary. We believe the SEC takes the opposite position. The reasoning is the securities have already been sold, a price has been determined, and therefore the registration statement must include XBRL exhibits.

Radloff’s article goes into great detail about a number of other tricky steps in this process for both form 10-Qs and form S-1s. We have also described a number of the regulations that must be kept in mind in previous blog posts.

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This Week in XBRL: Improving Quality of Submissions

2011-08-11T08:22:00.000-07:00

To continue our discussion on feedback on the XBRL filings already submitted to the SEC, we found a very good piece by Brad Monterio, the chairperson of the XBRL Committe of the Institute of Management Accountants, sharing his thoughts on the initial filings and suggestions moving forward. His points as far as improving quality were particularly notable:

We all remember Ford Motor Company’s slogan – the same applies to XBRL filings. Granted, the SEC has modified the liability provisions that will not penalize companies for errors in their XBRL filings until after October 31, 2014, but why wait to make sure everything is accurate and high quality? Set top quality standards for your XBRL documents from day one. Regardless of the moratorium on errors, the SEC, and the rest of the market for that matter, is watching nonetheless.

How can you improve the quality of your XBRL submissions?

1. Be diligent in your tag selections. This is one of the most important parts of the workflow. The SEC has published interpretive guidance at http://XBRL.sec.gov that can help you in selecting the right tags. Software applications for XBRL data conversion available today also include interfaces that help you select the appropriate tags from the U.S. GAAP XBRL taxonomy. Make sure that whichever application you use, the latest XBRL taxonomy is being used.

2. It’s preview time. Take advantage of the free viewer available on the SEC website to see what your filing will look like. This will help to identify potential problems before submission. Several commercially available viewers are also available in the market.

3. Validate, validate, validate. In addition to selecting the correct tags, you need to ensure that your submission is technically valid. Errors in filings are already being watched – don’t become another statistic. Use a validation engine from one of the software providers or the one available from the SEC in its test-filing tool.

4. Don’t be negative. Understand the differences between the HTML rendering of your filing and the actual XBRL documents. A common problem plaguing filers in the past is the inclusion of negative vales in the filing. Although some values may be shown as a negative item in a rendered version of the data (e.g., revenue may be shown as a negative number on the printed page), in many cases that item should not be shown as a negative vale in the XBRL document. See the SEC staff observations for some guidance on this issue.

5. Thoroughness is next to godliness. As year-two requirements come into play for you (i.e., detailed footnote tagging) or as you review subscripted text areas in financial statement disclosures, make sure you are complete and thorough in tagging all items. Monetary values, percentages and other types of numbers expressed in the statements need be tagged in both string form and as amounts. For example, a fraction (“one-third”) or a ratio (“four to one”) must be tagged appropriately.

Beyond Mr. Monterio's thoughts on quality, his statement regarding timeliness of troubleshooting will hopefully not fall on deaf ears for those companies not immediately worried about fixing potential errors.

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This Week in XBRL: Is XBRL Complementary, but Secondary?

2011-08-04T06:12:00.000-07:00

In our post last week, we discussed the fact that some are questioning whether learning XBRL will be worth it when it comes to the SEC mandate to tag filed financial information.

One of the reasons the question is being asked is because some of the more respected organizations throughout the world are classifying the reporting language in a confusing way. For example, this week, the International Financial Reporting Standards Foundation released a statement regarding XBRL taxonomy:

But "nearly all" of the participants cautioned against the foundation's recommendation that XBRL, or eXtensible Business Reporting Language, be integrated into the formal standard-setting process.

Instead, XBRL should be viewed as a "complementary, but secondary activity, that should not impair the ability of the IASB to make the necessary standard-setting decisions", the minutes state.

The SEC has made it clear that that XBRL is the wave of the future, but are others unwilling to take that step at this point?

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This Week in XBRL: Next Steps for XBRL

2011-07-28T15:09:00.000-07:00

As the XBRL mandate has been progressing, most of what has been written - both on this blog and in other places - has been focused on staying one or two steps ahead (or reviewing previous steps). This week, we got a breath of fresh air.

Fierce ComplianceIT put out an article focused on the next set of benchmarks for XBRL filers, now that the last group with a compliance mandate had to file statements after mid-June in the new format.

According to the article:

This is only the beginning of the XBRL era, mind you. We are far from the end given the phased approach the SEC has adopted. In the first year of compliance, companies must tag individual items (dollar values generally) in the primary financial statements, while footnotes and certain financial schedules are individually tagged as blocks of text. 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. There may be additional requirement along the way.

The XBRL transition is in that small category of business practices in which just getting started isn't the hardest part. This has caused many to ask, "will it be worth it?" This type of question should be expected, as it would be asked about any mandate in its early stages of being thrust upon an industry. We expect the answer, once a majority of the people feel more comfortable with the new processes, will be yes, especially as the technology and best practices get better developed.

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This Week in XBRL: Breaking Down the SEC's XBRL Review

2011-07-21T09:58:00.000-07:00

A couple weeks ago, we discussed the SEC's review of initial financial statements filed in XBRL. Overall, the review was positive, and while the SEC did go into specifics, we found a more concise breakdown of the SEC's thoughts.

Among the more intriguing aspects, as put forth by Moody, Famiglietti and Andronico include:

New filers have asked whether the rendered version of the XBRL financial statements need to look exactly the same as the HTML financial statements. The answer is no; filers should concentrate on the quality of the tagging rather than trying to make the two documents look exactly the same.
Filers are incorrectly entering an amount with a negative value. Most XBRL tagged numbers are positive even if the HTML financial statements show a credit or negative value.
Filers should not be extending when a US GAAP taxonomy element is already available Extending should only happen when there is a material difference between a standard element and the filer’s financial statement line item.
Filers should ensure that parenthetical amounts in the financial statements and monetary amounts found in subscripted text.
Each tagged item must have a unit attribute assigned to it.

In our opinion, the information provided by the SEC is extremely useful, just as the "review of a review" is. If the SEC can recognize that their points are coming across clearly to those that need to hear it, the open dialogue will be able to continue as the XBRL transition continues.

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This Week in XBRL: The XBRL Challenge Contest

2011-07-15T14:20:00.001-07:00

Like many other app-creating contests for computers or smartphones, the XBRL world has discovered that the best way to both improve and evolve their technology is by enticing some of the smarter programmers to explore new ways for XBRL to be used through the promise of cold, hard cash.

The XBRL Challenge is a contest developed and sponsored by Wharton Research Data Services and the CFA Institute. The goal is to create the best and most innovative for extracting data for multi-company comparison via desktop applications; or one that creates real-time valuation measures and delivers to mobile devices.

The prize: $20,000

Beyond the programming aspect, the contest will give contestants access to technical information, XBRL experts and a database of all XBRL-formatted financial statement data, updated within minutes of posting to the SEC to test out their projects. This will not only allow for proofing of the application technology, but because XBRL experts will be acting as pseud-trainers, these people can get an idea of who gets it and what needs to be done to better promote XBRL's benefits and advantages.

We will be very interested to see the results of some of the top candidates. With only about six months to plan, develop and submit projects (submissions must be made by January 31, 2012 with final judging and the awarding of prize will take place in February 2012) it is smart to allow participants access to XBRL experts. Additionally, with the panel of judges to include members of Google Finance, GIV Venture Partners, Pipeline Trading, Viano Capital and Wharton Research Data Services, even those that don't win will get a chance to have their work reviewed and critiqued by a number of influential people.

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This Week in XBRL: Reviewing the Initial XBRL Submissions

2011-07-08T18:33:00.000-07:00

This week, the SEC put out a review of the initial financial statements they received relating to the new rules on interactive data for financial reporting. Below are some excerpts from the executive summary:

Overall, the filings indicate that filers continue to devote significant effort to consider their responsibilities under this program, comply with the new rules and provide high-quality submissions.

The staff's reviews were conducted using data analysis tools to survey the entire population of filings and data points and, where appropriate, to review details of specific filings and tags on a targeted basis.

We have identified certain areas where there were common issues with the filings. As companies continue through the phase-in of the interactive data requirements, with the ongoing introduction of detailed tagging of notes to the financial statements and the phase-out of the limited liability provisions, we encourage them to prepare future filings that are consistent with the themes of our observations.

It is our expectation that where the issues identified are related to the rules of the Commission they can be addressed by filers in their next series of interactive data filings. We believe this will help increase the overall quality of the interactive data submissions and the usability of the data.

For the full report, click here.

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This Week in XBRL: An Interview with Robert Farrell

2011-06-30T13:42:00.000-07:00

EDGAR Online's newly-named CEO, Robert Farrell was recently interviewed on all things XBRL and beyond. Click below to hear a recording of the interview and his insights:

Listen to internet radio with Neal Hannon on Blog Talk Radio

This Week in XBRL: Dodd-Frank and XBRL

2011-06-23T11:53:00.000-07:00

The Dodd-Frank legislation has received a great deal of recognition because of the role it is playing in the overhaul of many aspects of the financial services industry. Highlights of the legislation include:

Consumer Protections with Authority and Independence
Ends Too Big to Fail Bailouts
Advance Warning System
Transparency and Accountability for Exotic Instrument
Executive Compensation and Corporate Governance
Protects Investors: Provides tough new rules for transparency and accountability for credit rating agencies to protect investors and businesses.
Enforces Regulations on the Books: Strengthens oversight and empowers regulators to aggressively pursue financial fraud, conflicts of interest and manipulation of the system that benefits special interests at the expense of American families and businesses.

Because of the range the legislation has, it was inevitable that XBRL best practices and tips were going to be connected to it. This week, two articles were published regarding the language as it relates to components of Dodd-Frank. including a review of the grace period for XBRL filings in case of unanticipated difficulties and rules behind fixing errors within XBRL.

While there wasn't a question of XBRL's continued importance in the financial industry, the fact that is has links and connections to legislation of this magnitude further cements its continued evolution has an important tool.

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This Week in XBRL: Beaches, Shorts and XBRL. Welcome to Bermuda!

2011-06-16T17:19:00.000-07:00

Anyone that has visited Bermuda for relaxation purposes knows that the islands offer an outstanding atmosphere for forgetting about day-to-day business life. However, for those interested in learning new best practices for the use of XBRL, Bermuda just maybe the place to enhance your day-to-day business life.

This week, the Bermuda Monetary Authority was recognized for helping to develop a new computer-based insurance reporting system using XBRL. The BMA was named as one of the first regulators in the world, "to adopt XBRL for insurance regulatory reporting and the standardized exchange of financial information between the Authority and Bermuda’s (re)insurance firms," according to the International Financial Reporting Standards (IFRS) Foundation. This puts the monetary authority of the 20 square mile island on par with organizations like the European Banking Authority and China.

This is another example of the evolution of XBRL's capabilities. From insurance to mutual funds, the technology is not only being adapted throughout the financial industry, but throughout the world...even to our favorite vacation spots.

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The IASA Conference (Leaving Booth 234)

2011-06-10T14:04:00.000-07:00

This year’s IASA show was a huge success. Not only was the show filled with pertinent information and excellent keynote speakers, but our own products gained a lot of attention as well.

Things kicked off Monday morning at breakfast with entertainment provided by the Nashville High School Marching Band. VP of Chapters, Chuck Gunkle, sang along when the players kicked in to God Bless America. Former Vice President Al Gore speak about the floods and droughts ravaging the country, and the possibility of readjusting Social Security Actuarial Tables. Mr. Gore also covered the cost of higher education, suggesting that higher taxes could help fix many of the problems in that institution.

On Day 2, we attended the powerful motivational talk given by Afterburner Inc., a group of fighter pilots that discuss the importance of maintaining focus at all costs. It was a busy day for us because of the number of questions people had about our 48 hour standard production time, and our ability to print on the spine of the Annual Statement. Finally, we were able to give an iPad 2 away to Brett Brad, from AXIS U.S. Insurance Company.

One of our biggest takeaways was that the National IASA team is working very hard to help all of the local IASA Chapters succeed. Some of the ways they are doing this is by committing to handling all of the local chapter show and meeting registrations, collection of dues for shows and meetings, and providing the chapters with the “Meeting in a box” that contains all of the badges, lanyards and misc. items for their meetings and shows. There is a large group of volunteers that make the local and national chapters a success. They are a mixture that consists of people from the insurance industry and vendors like me who support the industry.

It was a great event this year with a number of new contacts made and information learned. Next year’s conference is at the San Diego Convention Center on June 3-6, and you can bet we will be there.

The IASA Conference (from our view at Booth 234)

2011-06-02T10:43:00.000-07:00

For more than 80 years, the Insurance Accounting and Systems Association (IASA) National Conference has been one of the premiere events for those networking and learning within the insurance space, primarily because it includes companies that represent all insurance types (Property and Casualty, Life, Health, Fraternal, HMO and others). This year's event - starting June 5th in Nashville, Tennessee - should be no different.

As one of the few service providers in the insurance industry who execute the production and distribution of statutory reporting documents such as annual statements, quarterly statements, insurance expense exhibits and other supplements, Merrill Corporation looks forward to this conference as way to differentiate ourselves. This year expects to be particularly interesting, with keynotes from Vice President Al Gore and Social Media analyst Erik Qualman (which we are particularly interested in because of because of Merrill's active role in social media as a method of connecting with customers and colleagues. We will be very interested to hear what he has to add regarding the ongoing evolution of the medium).

So, we invite you to stop and visit us at Booth #234 (and if you can't, follow us on Twitter at @merrillconnect as we will be sharing thoughts on things we see and hear) if for no other reason than to register for a chance to win an Apple iPad2!!! Just like the conference theme, we at Merrill are “Energized” this year, and you will be to when you hear what we have to say.

This Week in XBRL: Could XBRL be the Next Superhero?

2011-05-25T12:38:00.000-07:00

Still frames of the next Batman movie have made its way on to the internet, but instead of Alfred or Robin, should the Cape Crusader think outside the box as far as a new sidekick? This was our first thought was when reading this recent article on using XBRL as a way to better identify and solve crime in the future.

In an intriguing piece of out India, the question came up of whether the government should seriously consider converting crime records into XBRL to avoid logistical and administrative occurrences associated with warrants, statutes of limitations, etc. This of course would make police work more efficient and prosecution more effective. The story lists a number of examples of international incidents that could have been handled differently because, "...moving the information to XBRL is about much more than merely creating a database of crime records. The XML nature of XBRL makes it machine readable; what comes over and above is the prescription of data standards which spells out how data will be captured fully."

Over the past couple weeks, we have written about the different aspects of XBRL from a financial services industry perspective, but as we know as communications experts, for something like XBRL to become better adopted and perceived, it has to have a stronger mainstream hook. Creating a message around preventing or solving crime is always well received, and would help in promoting the other uses of XBRL. We at Merrill aren't crime fighters by trade, but we like the concept this story presents.

So, while the exploits of The Penguin and Mr. Freeze may necessitate the capabilities of the Batmobile more than a software language, the idea that this evolving technology can play a role in public safety only adds to its credibility.

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This Week in XBRL: XBRL Jurisdictions

2011-05-18T11:33:00.000-07:00

The XBRL 22 Conference in Brussels ended this week, and one of the pieces of news coming out was the announcement that Switzerland is the next XBRL Jurisdiction.

XBRL International is the worldwide non-profit organization that is compiled of approximately 650 companies and agencies to build and promote the XBRL language and popularity. The mechanism they use to accomplish this are local jurisdictions which, according to their mission statement, "represent countries, regions or international bodies and focus on the progress of XBRL in their areas as well as contributing to international development. Members join through their local jurisdiction, except in areas where no jurisdiction has yet been formed, when they can join XBRL through a special direct membership category."

The consortium members meet periodically in international conferences, conduct committee work regularly via conference calls, and communicate in email and phone calls throughout the week.

For more information on XBRL jurisdictions, click here.

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This Week in XBRL: Lessons Learned by the SEC

2011-05-12T10:34:00.000-07:00

This week, Accounting Today provided an excellent summary of the SEC's phase-in approach with the XBRL mandate and some of the lessons learned. It is a topic we have covered a number of times on this blog, but this is a quick, concise refresher:

Data Quality – At the core of the XBRL tagging process, selecting the best tags to represent the information in your financial statements is the most critical part of the process. Carefully selecting the best tags is likely to be the greatest contributor to the quality of an XBRL submission. Some tips on how to select the best tags can be found in the Interpretive Guidance section.
Viewing Submissions – The SEC’s free previewer allows filers to view their submission before filing to see what it will look like on the SEC’s website. However, this rendering of the XBRL submission will NOT exactly visually match the corresponding HTML submission, and there is no requirement for it to do so. Filers should NOT make changes to their tagged data solely to achieve a particular visual effect. The previewer may be one of the tools used to help verify the completeness of the XBRL submission, but relying solely on the rendered document to review the tagged data will not identify all of the details necessary to assess potential filing errors. The filer’s software vendor or service provider may be able to provide reports that will help review these other aspects of your submission, including validation results.
Validation – Although selecting the correct tags is the most critical aspect of the process, if the XBRL submission is not technically valid it will not be accepted by the EDGAR system. The SEC said filers should consider using the validation tools from their vendor and the SEC test filing mechanism to make sure their submission is technically valid before filing.

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This Week in XBRL: The ICI Conference (from our view at Booth 303)

2011-05-04T12:52:00.000-07:00

A couple weeks ago, we shared some insight on upcoming conferences in which XBRL was the star. This week, we wanted to make a quick plug for a conference that, while XBRL isn't the main attraction, is one that we are proud to be attending, look forward to each year, and expect to both learn and network on a number of topics (including XBRL): The Investment Company Institute's 2011 General Membership Meeting.

From an XBRL perspective, we believe that Friday's breakfast session with SEC Chairman Mary Schapiro should offer some interesting insight into how the conversion process is going. Additionally, because of our presence on Facebook, Twitter and, of course, this blog, the Thursday afternoon session on social media should be an intriguing discussion on best practices.

Come visit the Merrill Corp team at Booth 303

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This Week in XBRL: Myths and Education

2011-04-28T18:20:00.000-07:00

Working within the XBRL world, it can be difficult for us to determine what information on the topic is being misconstrued by the public. Obviously, as experts in the platform, when asked questions, we can provide responses. But if the questions aren't even being asked, that makes it more difficult. This idea was made more obvious to us after reading an interesting blog identifying some common place XBRL myths.

The bottom line is that education is key. We know that it is a confusing subject, so just getting the basics is a start. For example, here in a brief article we found, they broke down three key concepts that are crucial to understanding how things function:

There are two forms of digital information: Structured and Unstructured. The former consists of data that is organized in a way that makes it easily handled by software. The latter is more chaotic in origin, with little or no clear organization. This type of data is impractical to use and difficult to navigate.
Data is structured in two different ways: Readability or Usability. For example, the same data would be written one way to be shared in a document or presentation, and in a completely different way to be analyzed by software.
There are two parts to structured information: Syntax or Symantics. Syntax describes the form of the information, generally relevant to a technical person, but not a business person. Semantics communicates the meaning of the information, which is more relevant for mainstream use.

Of course, these are just the basics. To take full advantage of XBRL's benefits, we suggest discussions with industry experts that work with the technology everyday.

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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.

This Week in XBRL - Financial Literacy Month & XBRL Conferences

2011-04-21T10:44:00.000-07:00

We are most of the way into April and have yet to wish everyone that reads the Merrill Corp. FinServ blog a happy Financial Literacy Month. While this concept is based on educating the consumer on their budgeting and banking, it does remind those of us within the industry that the learning process for us should never end either.

With that in mind, this is the perfect time to mention two significant conferences over the next several months in which education in XBRL will be at the forefront. The obvious one is the 22nd XBRL International Conference, which is is produced by XBRL International, Inc. and is hosted by XBRL Europe. Being held in Brussels next month, this year's theme is Sharing Economic Information in a Global World: The XBRL Contribution.

The Conference program lists a plethora of topic areas that those of us working with the technology - from mutual funds to accounting procedures - can benefit from hearing, including An Overview of XBRL Adoption around the World by XBRL International CEO Tony Fragnito and International Standards Board Strategy from the ISB's Ray Lam. As for, breakout sessions, we will be very interested to hear what comes out of the discussion on XBRL Technology and Best Practices.

In addition to this, later this year, XBRL US, the nonprofit consortium for XML business reporting, will hold its annual conference in Nashville, Tennessee to cover how public companies can use XBRL for reporting and communicating to investors and regulators, as well as practical educational sessions on implementing XBRL for SEC reporting. Highlights of the conference will include a keynote from Frank Brod, Chief Accounting Officer, Microsoft Corporation, as well as tutorials on SEC and non-SEC uses for XBRL; and industry-specific case studies.

We all know that we have budgetary margins that are razor thin, but also remember that educational opportunities can be the first step in improving company revenue.

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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.

This Week in XBRL - IFRS Foundation, Foreign Private Issuers and XBRL Accounts,

2011-04-14T11:38:00.000-07:00

Because Merrill enjoys columns that promote activities we focus on as a company, our favorite XBRL story of the week was on promoting XBRL Accounts, as well as the organizations that have an expertise in the technology (such as Merrill, who created the XBRL Complete platform and has an in-house team of experts). We thought the best part was this excerpt:

While iXBRL and XBRL accounts are unknown words for many companies there is no need to lose any sleep over it. There are some highly professional organizations that have started working on these languages and they have been providing professional consulting to some of the best companies in the world already. These professional consultants help companies outsource their financial report preparation and also help them prepare the reports in-house.

However, there were also two interesting, industry-focused pieces, both of which involved the International Financial Reporting Standards (IFRS). The first focused on the SEC ruling that foreign private users that use the IFRS to file in XBRL may be provided with additional time beyond June 1 because of the lack of specifics provided regarding the taxonomy that should be followed. The SEC sent a letter to the Center for Audit Quality in this regard, which can be viewed here. We will be very interested in seeing that the official ruling ends up being.

The other IFRS / XBRL-related news concerned the IFRS Foundation announcing it will be publishing supplementary tags for the IFRS Taxonomy. These "common-practice tags" will improve the ability to compare information by enabling entities to create IFRS financial statements with fewer entity-specific taxonomy tags. These new tags will be developed by the IFRS through the analysis of more than 200 financial statements, including statements of financial position, comprehensive income, cash flows and changes in equity, and block-tagged notes and accounting policies—that have been prepared in accordance with IFRS by entities across geographical areas and industries, and including financial institutions and insurance companies. They will be published as a draft supplement to the IFRS Taxonomy 2011. This information is just the latest example of how important consistently-improving taxonomy will play in the growth, adoption and understanding of XBRL by companies large and small. Very few - if any - financial services and IT experts have suggested that it is anything but essential.

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This Week in XBRL

2011-04-08T17:54:00.000-07:00

In the ongoing coverage of the recovery process Japan is going through as a nation, Homeland Security Specialist W. David Stephenson offered his thoughts on how Japan can begin building themselves back up:

Fast forward to today, which I suggest offers a perfect situation for Japan to again pioneer in a management innovation. In this case the distinction would be to become the first nation to create a framework for a seamless flow of information within and between both government and industry.

The key tool to achieving this breakthrough is the eXtensible Business Reporting Language, XBRL, a global standard, free tool for sharing data by attaching "tags" to it that give it context and meaning. For example, the number 1600 by itself could denote anything from the White House's address to calories in a recipe. However, when bracketed with the XBRL tag "quantity," (1600) its meaning is immediately apparent. Even better, once tagged, data can automatically flow anywhere you choose where those same tags are present: within your company, to a trading partner for supply chain integration, and to a government agency.

On a different aspect of the topic, with approximately 120 days left before the XBRL deadline, the IR Web Report recently published 4 main criteria for selecting an XBRL preparation solution (a solution like Merrill's XBRL Complete). The criteria is as follows (and should be weighted differently according to your company priorities):

Time Commitment - "The time spent on the XBRL may vary significantly, and will be split between internal and external resources."
Price - Every vendor will quote a price, but what is included in that price? Is it the price just for the software or does it include the consulting time (and which does your company need)?
How much XBRL do you actually want to learn? - In line with the "Time Commitment" component, vendors should be able to provide an idea of how much XBRL knowledge you need to know as a company vs. how much can be supplied by the experts on a need-to-know basis.
Vendor experience with XBRL - "In 2009, approximately 500 companies submitted XBRL to the SEC for the first time; in 2010, an additional 1000 did so. In the second year of XBRL filing for each of these companies, there was the additional burden of “detailed tagging” their financial statements to contend with. This year there are projected to be an additional 8700 companies providing XBRL for the first time."

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Testing the Volcker Rule.

2011-03-30T16:05:00.000-07:00

Last year, we wrote a blog describing an unusual turn of events when the Obama administration turned its back on Treasury Secretary Timothy Geithner in favor of Former Fed Chairman Paul Volcker. The event began legislation that removed the threat of Big Banks waging massive gambles with taxpayer money. Now, just over a year later, Volcker’s name is in headlines again.

Goldman Sachs has been seeing some very significant profits from the secretive investment operation known as Special Situations Group (SSG). Goldman Sachs argues that SSG is “more of a lending than a trading business,” but this hasn’t stopped regulators from questioning the legality of the group under The Volcker Rule.

According to those opposed to SSG, the problem here is in the semantics. To date, it has been very difficult to describe exactly what defines “proprietary trading.” Goldman Sachs, they say, is able to navigate through loopholes in the law, garnering huge profits with almost no risk.

For now, Goldman Sachs insists that they are doing nothing dodgy, and that their investments are not only legal, but helpful. Because SSG is primarily a lending company, such investments actually have the potential to improve the economy. According to them, SSG would only fall under the Volcker Rule if it operated through hedge or private-equity funds.

Regardless of the results of this particular case, the increased attention will likely lead to more definitive rules on this type of investment strategy. The Volcker Rule has had little opposition since its inception just over a year ago, and it is time to make sure that the law can actually function when put to the test.

XBRL & Taxonomy Changes

2011-03-23T13:33:00.000-07:00

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.

XBRL at SXSW

2011-03-16T14:53:00.000-07:00

Last week, we discussed the House Oversight Committee's hearing on FY2010 Consolidated Financial Statements of the U.S. Government. Well, half a country away (and in front of a much different audience) a similar conversation took place this week.

The South by Southwest Conferences and Festivals (also known as SXSW) in Austin, Texas qualifies itself as the premier destination for discovery by "offering the unique convergence of original music, independent films, and emerging technologies." While best known for music showcases and film screenings, SXSW has proven to be an event that doesn't talk about something that is buzz-worthy; rather creates an atmosphere to share and discuss topics, therefore making them buzz-worthy.

Amongst the panel topics this year was the following:

Power to the People: Regulating Big Business

After being witness to a multitude of massive corporate accounting scandals, the world has been forced to re-evaluate almost every area of how business is conducted. A new day is dawning in the world of information, and the people are demanding more visibility into the everyday operations of companies and governments. In order to pacify the public outcry for increased knowledge, regulatory controls such as Sarbanes-Oxley and Base III have been enacted. In addition, regulatory agencies like the SEC are rapidly embracing new approaches to providing the public with information and data through the use of eXtensible Business Reporting Language (XBRL). The SEC and other governing bodies have recognized that the democratization of corporate and government data, through the use of XBRL, will guarantee a higher level of transparency and usability.

Now like never before, transparency is allowing for a shift of power from corporations to the people. Because information is easily available for anyone to download for free, analysis and comparisons between the big guys can be done on a large assortment of public data. This information revolution will no longer allow companies to operate in secrecy and will provide people with the data they need to avoid future bailouts and economic turmoil.

Merrill has produced webinars, created tutorials and developed materials on topics like this, but our demographic is admittedly different than that of SXSW, and therefore, we applaud the organization for taking the time and risking its reputation on covering this subject. This type of information is important for younger individuals to hear, and with an audience and a following the likes of SXSW's, there is a legitimate opportunity that many walked away with knowledge they can utilize in (and for) their future.

Reviewing the Consolidated Financial Statements of the U.S. Government Hearing

2011-03-09T16:54:00.000-08:00

This week, the House Committee on Oversight and Government Reform held a hearing entitled, “A Look at the FY2010 Consolidated Financial Statements of the U.S. Government.” Witnesses included high ranking officials such as The Honorable Gene L. Dodaro, Comptroller General of the United States (Government Accountability Office); The Honorable Richard L. Gregg, Fiscal Assistant Secretary (Department of the Treasury); and The Honorable Daniel I. Werfel Controller and Director of the Office of Federal Financial Management (Office of Management and Budget).

We mention this hearing in particular because of the role XBRL played in the testimony and questions. This comes on the heels of an interesting couple weeks in which the XBRL technology saw some critiques in articles and blogs. Fans of this blog know we have covered this topic in great detail as it relates to mutual funds and the SEC mandate.

In general, the Committee on Oversight and Government Reform has legislative jurisdiction over, among other things, the District of Columbia, the government procurement process, federal personnel systems, and the Postal Service. However, they pride themselves in overseeing "everything government does – from national security to homeland security grants, from federal workforce policies to regulatory reform and reorganization authority, from information technology procurements at individual agencies to government-wide data security standards." With this in mind, it will be interesting to see what outcomes come from the this hearing.

BOA's Two Day Glitch

2011-03-02T13:22:00.000-08:00

Millions of Bank of America customers were unable to use their online banking services this week, forcing them to do their banking at a branch, in person, by phone or by ATM. (Luckily for BOA, it wasn't the most annoying technical problem of the week. That award goes to Gmail).

We won't comment on the technology behind the issue, but can say a word on their communications / public relations strategy. BOA blamed the online banking outage on a software update that became problematic. Tara Burke, a Bank of America spokeswoman, didn't want to release too many details, but did do an admirable job in her rapid response efforts, saying:

"We've been experiencing some intermittent service disruption throughout the day. This is not the result of any hacking or malware or anything like that. This is not an attack on Bank of America," adding that customer data had not been affected by the service disruptions.

Some could say that having to do banking the "old-fashion way" isn't a true crisis, but if BOA's competitors can prove they have a better track record when it comes to hassle-free service, it really could have a negative effect on new enrollments. A glitch lasting two days for an institution like BOA sets a dangerous precedent. In the future, they may need to consider proactively warning of software upgrades - even of the smallest kind - to avoid negative press and customer backlash.

What will Rise at CFO Rising?

2011-02-22T15:40:00.000-08:00

In just a few weeks, Orlando will play host to the 18th Annual CFO Rising Conference and Exhibition, and while the event will contain a number of impressive keynote speakers (as well as some creative networking opportunities), as usual, it is the breakout sessions that we at Merrill Corporation heavily endorse participating in. We specifically recommend:

Private Company Financial Reporting: What CFOs Should Know Now

In the United States and around the world, private-company financial reporting is undergoing significant, continuous change. In particular, financial accounting and reporting standards are increasingly influenced by global phenomena that private-company CFOs can no longer ignore. This workshop will explain the impact that recent and forthcoming developments in private-company financial reporting will have on your company, your department, and your career. It will also provide you with proven, actionable guidance for managing the associated risks both inside and outside of the finance department. Because this workshop focuses on major trends from the CFO’s perspective, your main takeaway will be a solid understanding of the critical decisions and plans that you will need to make and act on in order to lead your private company through a time of unprecedented change in financial reporting. That understanding will empower you to overcome the many near-term challenges that private company CFOs face.

Topics covered in this workshop include:

The Financial Accounting Standards Board’s (FASB’s) Accounting Standards Codification™.
Proposed changes to accounting and reporting standards for revenue, leases, and financial instruments.
Opportunities and incentives for private companies to adopt International Financial Reporting Standards (IFRS) or the IFRS for Small and Medium-sized Entities.
Other alternatives to U.S. Generally Accepted Accounting Principles (GAAP) for private U.S. companies.
The prospects for greater divergence between private-company GAAP and public-company GAAP in the United States and other countries.
Cost-effective internal control over financial reporting.
Talent management.

On the Front Lines: The State of Finance 2011 (A Panel Discussion)

Already so lean that they often escaped the deep cuts that other departments endured over the past two years, finance departments are slimming down even further. In fact, a combination of increasing automation, new business models, and offshoring has pushed down the average finance staff’s size by 30% over the past six years, according to The Hackett Group. How is that affecting the war for talent? Are finance jobs more strategic now? And what is the prognosis for the future?

Masterclass 2: Compliance

The debate over the convergence of international accounting standards is coming to a close. FASB and the IASB plan to release a slew of new standards this year that will dramatically affect financial statements. Changes in financial accounting promise to affect how CFOs communicate with stakeholders—and how they do their jobs. This session will address how some leading finance executives are coping with the latest developments, including the convergence of U.S. GAAP and IFRS and offer best practices.

As an organization that will play a role in the ongoing development of these issues, we strongly encourage our current and future clients to keep up-to-date with the most current information on some of these topics.

Another Year, Another Deadline for the Fund Industry

2011-02-18T10:26:00.000-08:00

Brokers had a busy 2010 preparing for the new cost-bases reporting rules that took effect in January of this year. Mutual Funds are next up with the IRS and cost-bases reporting slated to hit them square in the compliance expense pocket for 2012.

As Chris Kentouris explains in his article from Securities Technology Monitor, "Buying new software to calculate the correct number for the original cost of a tax lot of shares is just the tip of the iceberg in preparations." Adding, "Mutual funds, which have always relied on average cost accounting, will now be required to give investors the option of deciding which tax lot accounting methodology to use."

Confused? Read the rest of Chris' article here and a follow on article from Tom Steiner-Threlkeld and look for more information and solutions to help through the new regulations over the coming months.

You can read the final regulations brokers are currently working under here.

Hedge Accounting

2011-02-12T09:34:00.000-08:00

Do you have experience in hedge accounting? More importantly, do you have opinions on the reporting of hedge accounting?

This week, The Financial Accounting Standards Board (FASB) issued their latest discussion paper to solicit input on how to improve, simplify, and converge the financial reporting requirements for hedging activities.

Hedge accounting exists as a method for financial institutions and businesses to protect themselves from different economic risks associated with derivative financial instruments. The use of it, spelled out under the International Accounting Standards's IAS39 (Financial Instrument Recognition and Measurement).

The timeline for this process started in May 2010 with the FASB's proposed revisions to improve and simplify standards for financial reporting of financial instruments, including hedge accounting guidance. In December 2010, as part of its project to improve the accounting for financial instruments, the International Accounting Standards Board (IASB) issued its Exposure Draft (ED) Hedge Accounting, which seeks to align hedge accounting more closely with risk management while addressing inconsistencies and weaknesses in the existing hedge accounting model.

According to the FASB, differences exist between the International Financial Reporting Standards and the U.S. GAAP relating to hedge accounting. The revisions proposed by the ISAB's Exposure Draft would result in more differences compared with the FASB’s current and proposed hedge accounting guidance. The FASB Discussion Paper asks stakeholders whether the IASB’s proposals are a better starting point for any changes to U.S. GAAP as it relates to derivatives and hedging activities.

“The FASB is issuing this Discussion Paper to determine whether our constituents think the IASB’s proposed changes would improve the accounting for hedging activities,” stated FASB Chairman Leslie F. Seidman. “The information received during the comment period will be helpful to both the FASB and the IASB as we deliberate issues pertaining to hedge accounting.”

XBRL for Mutual Funds: How did it go?

2011-01-06T12:41:00.000-08:00

The effective date of the XBRL ruling – requiring 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) - has passed with very little fanfare.

While some have listed the XBRL mandate as one of the top tech stories of the year, it is difficult to determine whether the few public articles and reports is due to the lack of an interesting story or because organizations are keeping their process hush-hush for now. With approximately 8,700 companies providing XBRL for the first time this year, there would seemingly be something to share. (As a consolation, we can report that those utilizing the XBRL Complete have been very satisfied with the transition, both in the technology and expertise the Merrill Compliance Services Team has to navigate funds through the compliance waters, from the discovery process through “going live.")

Because nothing has been reported yet, we would like to make a suggestion as the first story or the first series of stories. In May 2010, the consultant-group Grant Thornton surveyed 496 CFOs and senior comptrollers from across the country about their plans for implementing XBRL. The results indicated that:

64 percent of public companies did not report financial results using XBRL at the time.
Of those, half had no plans to meet the 2011 deadline to report using interactive data.

Many of those companies likely developed those plans during the summer or later (we reported in this blog series that organization had until about 30-45 days before the new year to properly plan) but we would like to know how the process ended up for them. Did they meet the mandate? Were they rushed? Was it a simple process? Did they handle it in-house or outsource it? Have they see any benefits?

The XBRL mandate story is not over yet, it is simply switching from the planning process to implementation.

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XBRL for Mutual Funds: Other FAQs

2010-12-15T08:18:00.000-08:00

The calendar on the wall is on its last page. The effective date of the XBRL ruling – requiring 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) - is just days away.

We have spent the past several months on this blog answering questions we have received from the financial services community. The SEC recently joined in us in this effort to educate on the topic by XBRL by releasing a new series of FAQs regarding the mandate. The information it contains is a great compliment to some of the topics we have covered.

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XBRL for Mutual Funds: Will it be a Happy New Year?

2010-12-10T09:55:00.000-08:00

The first of the year is right around the corner, and the number of business days left are quickly dwindling away, which means the effective date of the XBRL ruling – requiring 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) - is upon us.

We have given our view of the XBRL language and technology through this blog, but wanted to share a brief (but pithy) article from The Financial Times regarding XBRL and its perception globally. The points that are made are interesting and give further credence for why products that can facilitate the XBRL process are beneficial.

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XBRL for Mutual Funds: Are You Ready.....yet

2010-11-30T13:18:00.000-08:00

2 1/2 months ago, we asked if you were ready for the XBRL mandate requiring 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). Since then, we have been providing a list of FAQ's and technical details regarding what will be needed come January 1, 2011.

With 30 days left, we wanted to republish our thoughts on what needs to be considered when choosing a vendor:

The core functions that are needed to meet these requirements include: tagging, filing and publishing. This is a simple synopsis of the mandate, and while there are also complex elements to the implementation, when choosing a vendor, there are two basic success factors to be considered:

1. Subject matter experts who are familiar with the ruling and its detailed implications.

Taxonomy? Element? Dimension? Extension? If these words are not in your vernacular, then an XBRL expert who is focused on U.S. mutual funds (not corporate filings or foreign mutual funds) will be a necessary addition to your team.

2. Systematic process for expeditiously and accurately tagging, filing and publishing your data in XBRL format.

An automated tagging solution ensures that your data is tagged correctly – the 1st time and every time. In addition, classes are handled with ease in a well-designed tagging platform.
Once your XBRL-tagged data is ready for filing – it flows seamlessly in our filing engine.
Afterwards, once the XBRL data is accepted by the SEC, our standard publishing option converts the XBRL data into human-readable, HTML-rendered format. Both the XBRL data as well as the HTML version are published to your fund’s website on the same day that it is filed. The HTML view helps your investors understand the content of the XBRL files.

Additionally, because the mandate only requires the XBRL files to be published to your website, few of a fund’s investors will be able to harness the true power of XBRL unless they have access to XBRL-enabled software. An enhanced publishing solution uses the XBRL data within a viewer that allows your investors to compare any combination of your funds – side-by-side – in a matter of seconds.

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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.

XBRL for Mutual Funds: Time to Make a Decision

2010-11-17T07:42:00.000-08:00

We are 43 days away from the effective date of the XBRL ruling – requiring 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).

As we have said in all of our XBRL posts over the past several months, the on-boarding process should be started approximately 30-45 days before the beginning of the year in order to understand and get comfortable with the tagging and publishing needs well in advance. Therefore, this is our first post that falls within that window, and based on industry analysis, only about 46% of the market has made a decision on how they will comply with this ruling. Of the 46%, only 5% have decided to handle this work themselves “in-house.” The rest have selected Merrill Corp. or another vendor.

While we have been posting weekly news, information and FAQs on the XBRL mandate, in general, there has been very little mainstream content published on the impending mandate. However, Tom Steiner-Threlkeld recently published a piece entitled, XBRL: To Insource Or To Outsource? which provides an objective perspective on XBRL as it pertains to mutual funds. For this week's post, we wanted to provide a couple excerpts from that piece:

"No matter what, before you decide whether to handle the task in-house or hire a service, get yourself a team that you trust to help make the decision and work through the process."

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"Allow yourself two or three months to get prepared. Give yourself time to evaluate your alternatives, understand the process, establish tags and gather or convert the information from existing sources to get ready to deliver them in the XBRL format to the SEC."

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"In the mutual fund case, the task looks a lot simpler than in making corporate financial statements interactive. There are only 250 reporting elements to deal with in the taxonomy for mutual fund summaries, compared to 17,000 elements in the taxonomy for financial reporting by public companies."

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"The question on insourcing versus outsourcing the tagging, filing and publishing tasks boils down, [said Guy Stanzione, SEC compliance services manager for Merrill Corporation], to whether a company wants to spend the money. The money not just to train staff up front, but to retrain staff as taxonomies change, to add or supplement staff as needed and to keep up to date with all changes made, over time, by the SEC, in its requirements."

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XBRL for Mutual Funds – Filing and Publishing Considerations (Part 2)

2010-11-08T14:56:00.000-08:00

We are 51 days away from the effective date of the XBRL ruling – requiring 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).

This week, we will continue our discussion of the functional steps of XBRL by including Part Two of the filing and publishing steps. Remember, until you file or publish your XBRL-tagged data, it does not exist to the SEC. So, this article will focus on these important final steps in the process.

As we have mentioned in previous blog posts, the XBRL data is not intended for humans to read. However, because it will be important to share information with your investors, having different publishing options becomes more important.

For this reason, the Merrill XBRL Complete product has incorporated into it three different publishing options to fit how you want to publish and share this information with your investors.

Option 1: A simple publish of the XBRL data to your fund’s website.

You can stop there as this is the only requirement of the ruling. However, a number of funds are interested in taking extra steps to ensure that their investors understand what is included in the XBRL-tagged file, so that leads us to ...

Option 2: A simple publish the XBRL-tagged data to your fund's website, as well as an HTML-rendering of that data so your investors can have a human-readable version of only the data included in the XBRL file.

However, in order to harness the true power of XBRL to the advantage of your investors, we have...

Option 3: A viewer that is similar to the SEC's Interactive Risk & Return Summary Report Viewer, but with a special twist. Instead of the SEC’s branding at the top of the website, it will contain your logo, branding, colors, etc. In addition, it will be anchored to your fund’s website so that your investors remain within your site (as opposed to navigating away to the SEC or other site). Further, your investors will be able to do side-by-side comparisons of only your funds or compare your funds against the entire universe of funds.

No matter which option you choose, because of the automated, systematic approach we have developed, the XBRL-tagged data will be published within the “same day” that it is filed with the SEC.

As we have said previously, maintaining compliance with respect to XBRL will be one part technology, one part process and one part human expertise. This is why we have developed not only a XBRL-solution based on solid technology and processes, but also the Merrill Compliance Services Team to navigate funds through the compliance waters, from the discovery process through “going live."

As always, our overall message is that the time to prepare is now. Don’t be caught off guard and start the on-boarding process approximately 30-45 days before the beginning of the year. This will allow you to understand your tagging and publishing needs well in advance to make the proper business decision. Being prepared is the key to a successful transition to XBRL.

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XBRL for Mutual Funds – Filing and Publishing Considerations

2010-11-01T14:37:00.000-07:00

We are 59 days away from the effective date of the XBRL ruling – requiring 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).

This week, we will continue our discussion of the functional steps of XBRL by covering the filing and publishing steps. With so much focus on the mechanics of 'tagging' the data in XBRL, filing and publishing seem to be after-thoughts when in fact they are where the “rubber meets the road.” Remember, until you file or publish your XBRL-tagged data, it does not exist to the SEC. So, this article will focus on these important final steps in the process.

In the end, the XBRL data needs to be filed and published to your fund’s website on the “same day.” If you have multiple funds filing and publishing on or around the same day, then it will be critical to have a structured, systematic process for both of these steps. A reputable vendor who offers XBRL tagging-filing-publishing services must be structured to scale and support many funds on any given day. When considering a vendor, you should carefully discuss each step in the process as well as the hand-off between each of the steps to ensure that the “same day” aspect of the ruling can be met. Look for manual steps in the process or hand-off as they will slow the process and introduce risk.

For example, at Merrill Corp, we simply modified our existing, time-proven process for filing EDGAR to fit the specific requirements for XBRL.

For publishing, we followed a similar approach as we used for tagging. To ensure that the published data is identical to the filed data – we, again pull it from the SEC. We call the data that is filed, accepted and stored by the SEC “golden data.” By pulling the golden data, we ensure that any last second changes to the XBRL data that was filed is included in the published data, too.

Now, the Interactive Data ruling requires only the XBRL-tagged data is to be published to the fund’s website. Here’s an example of XBRL-tagged data that your investors would see if they opened up that file:

As you and I know (and we have mentioned in previous blog posts), this data is not intended for humans to read. However, how you plan to convey this information to your investors is important. The XBRL Complete product has responded with three different publishing options to fit how you want to publish and share this information with your investors. We will explain these three options in our next post.

As always, our overall message is that the time to prepare is now. Don’t be caught off guard and start the on-boarding process approximately 30-45 days before the beginning of the year. This will allow you to understand your tagging and publishing needs well in advance to make the proper business decision. Being prepared is the key to a successful transition to XBRL.

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XBRL for Mutual Funds – Reviewing XBRL-Tagged Data

2010-10-22T09:16:00.000-07:00

We are 71 days away from the effective date of the XBRL ruling – requiring 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).

This week, we will continue our discussion of the functional steps of XBRL. As we mentioned last week, there are three (3) functional areas impacted by this ruling – tagging, filing and publishing. This week, we will cover some additional steps within the“tagging” phase.

Once you have completed the “on-boarding” process, your teams should have experienced the technology and process that will be used during ‘live’ production and should be comfortable moving forward. Whether you are tagging the data in-house or using an external vendor, it is important to remember that the accuracy of the data and corresponding tags is still yours. Therefore, you should always review the XBRL-tagged data before filing with the SEC and publishing to your fund’s website.


Native XBRL Language

So, the obvious question exists: Because XBRL is not intended to be read by humans (but rather for computers), how does one review the XBRL-tagged data? The answer is by simply letting a computer read it and present it back to you in such a way that you can read it.

As an example, software can isolate the tag and then show you the content that will be included within that tag. For example, the SEC’s “alfalfa” example shows the following tags and corresponding data:

(rr_distributionandservice12b1feesoverassets) 0.28%
(rr_otherexpensesoverassets) 0.13%

By using XBRL software to visually align the tags in a separate column from its respective data, this is one of many ways that a system can organize the XBRL-tagged data in such a way that it is easy for you to read, review and provide feedback.

What should also be included in the review of the XBRL-tagged data is the method to capture changes, questions, etc. This method should be constructed in such a way to expedite the review, feedback and approval steps, as opposed to a manual review process – which would include routing a file to the appropriate people who need to review and provide feedback. A systematic, controlled approach with built-in flexibility will ensure a complete and accurate review of the XBRL-tagged data.

What a web-based solution should do is act as a “gatekeeper” for compiling all feedback as well as reconciling the differences and making the appropriate changes.

For example, Sara logs into the system at 7 AM and makes three comments and requests one change. At 9 AM, Tom logs into the system. If he had not seen Sara’s comments, then he would have repeated 2 of Sara’s 3 comments and missed the change. Instead, he reviews her feedback and takes no additional action. In the end, the process serves as its own "gatekeeper" as the technology allows each user to see the feedback of others.

Once your team has reviewed and approved the XBRL data, the next steps are filing and publishing, which we will discuss in the next week’s post.

As we have said previously, maintaining compliance with respect to XBRL will be one part technology, one part process and one part human expertise. This is why, at Merrill Corporation, we have developed not only a XBRL-solution based on solid technology and processes, but also the Merrill Compliance Services Team to navigate funds through the compliance waters, from the discovery process through “going live."

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XBRL for Mutual Funds: Best Tagging Solution is Solid Mix of Technology, People and Process

2010-10-13T09:42:00.000-07:00

The countdown is now down to 79 days from the effective date of the XBRL ruling – requiring 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). To continue our XBRL blog series outlining the different aspects of the mandate, this week, we will move beyond the basics of XBRL and begin our discussion of the functional steps.

There are three functional areas impacted by this ruling: tagging, filing and publishing. In this edition, we will focus on the implementation or “on-boarding” process to setup your funds leading up to the tagging process.

Like the title of this post says, the key to a successful tagging solution involves a solid mix of technology, people and process. In the end, your solution will only be as strong as its weakest link. For example, if you have the best people using shoddy technology surrounded by a weak process, then the time and effort to produce accurately tagged XBRL data will become increasingly difficult, if not impossible.

A solid technology solution will utilize a systematic, controlled approach with flexibility. With a systematic approach, you can tag your funds utilizing a “one-to-many” method for those funds that have similar information and tagging structure, versus tagging each fund independently.

As a direct result of the Summary Prospectus ruling that went into effect in January 2010, the Risk/Return Summary section has six (6) standard sections that are expected to be presented in a prescribed order. Because there is a known, expected set of information in the Risk/Return Summary section, the taxonomy (dictionary) or elements (tags) is a concise set of tags – enabling technology-enabled solutions built to support it. However, because there will be occasions when tags will need to be customized, it will be important for your technology to also be flexible. An audit trail to track any changes including who, when and why a tag was changed will be important. By using the appropriate technology, you can be assured that your tags are correct the first time and every time.

Once you have the right technology to tag your funds, you need to make sure that the people running it understand the ruling, the technology itself and everything about the taxonomy and selection of the appropriate tags. Subject matter experts will be an integral component in the process.

Lastly, tying it all together will be the process that surrounds the technology and is used by the subject matter experts to tag your funds’ data in XBRL. If the process is precise, then the three parts should integrate seamlessly.

It’s a good idea to be begin the on-boarding process approximately 30-45 days prior to the “go-live” date of your first funds impacted by the January 1, 2011 XBRL ruling adoption date. Fund complexes and fund administrators are preparing now since they have larger numbers of funds and want to be ready in advance of the approaching holiday season at the end of the year.

Merrill has developed a synergistic mix of technology, people and process as part of our Merrill XBRL Complete solution. We ensure that the overlapping content from your EDGAR filing to your XBRL filing match by retrieving data directly from the SEC. So, we begin with “golden data” as it is data that has been filed and accepted by the SEC. From there, our technology has a solid audit trial to track who made each and every change to the tags, when and why. Additionally, our Merrill Compliance Services Team expert team understands the details and nuances of the ruling, as well as the taxonomy and application of it, so if questions or concerns arise, we have the knowledge on how to address them (which includes having a direct line of contact with the SEC if the question is not clarified by the ruling itself). This workflow represents the basics of our process in preparation for the mandate.

In other words, we are ready for your funds today.

Our overall message is that the time to prepare is now. Understand your tagging and publishing needs well in advance to make the proper business decision because being prepared is the key to a successful transition to XBRL. Maintaining compliance with respect to XBRL will be one part technology, one part people and one part process. This means that selecting a partner for this endeavor will necessitate finding the ideal match that encompasses all of these components. For this reason, Merrill Corporation spent time not only developing a XBRL solution based on solid technology, but also a team of experts and processes to navigate funds through the compliance waters, from discovery through “going live."

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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.

XBRL for Mutual Funds – To File or Not to File XBRL? That is the Question.

2010-09-30T11:48:00.000-07:00

We are 92 days away from the effective date of the XBRL ruling requiring 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).

To date, we have received tremendous feedback on our XBRL blog series outlining the different aspects of the mandate. This week, we will continue our Frequently Asked Questions series. In conjunction with the announcement of the Merrill XBRL Complete solution, we are going to delve a little deeper into specifics of the XBRL mandate of which our clients have inquired:

Q: This whole XBRL thing is confusing to me. How do I know when I have to file XBRL or when I don’t? Do supplements need to file?

A: What everyone should know is that after January 1, 2011, any updates to the Risk/Return Summary Prospectus will need to file with the SEC and publish to the fund’s website in XBRL format including the following:

The initial effectiveness of any new fund filed as a Pre-Effective Amendment to the N-1A;
The annual update of previously effective funds filed as a Post-Effective Amendment to the N-1A, pursuant to Rule 485(b);
Definitive materials, after going effective, and filed within five days of effectiveness, pursuant to Rule 497(c);
Supplements (stickers) filed throughout the year, pursuant to Rule 497.

XBRL can file simultaneously with the “traditional” EDGAR materials, or within fifteen business days of the filing. Post-EDGAR (within fifteen business days) allows you to catch your breath after meeting your effectiveness compliance deadline before focusing on the XBRL filing.

In addition to the filing XBRL with the SEC, the XBRL files must also be posted to the fund website and must remain accessible for the entire period of effectiveness of the fund – that is until the next annual update.

Q: How will I do this? How can I stay compliant?

A: Maintaining compliance with respect to XBRL will be one part technology, one part process and one part human expertise. This means that selecting a partner for this endeavor will necessitate finding the ideal match that encompasses all of these components. This is why, at Merrill Corporation, we not only developed a XBRL solution based on solid technology and processes, but also the Merrill Compliance Services Team to navigate funds through the compliance waters - from discovery process to "going live."

Our overall message is that the time to prepare is now. Don't be caught off guard. Understand your tagging and publishing needs well in advance to make the proper business decision. Being prepared is the key to a successful transition to XBRL.

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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.

XBRL for Mutual Funds: When the requirement hits will I be ready?

2010-09-21T07:32:00.000-07:00

To date our blog series on XBRL for Mutual Funds has covered the background of the XBRL mandate requiring all open-end mutual funds to file the Risk/Return Summary section in XBRL format as an exhibit, as well as publishing the XBRL files to the fund’s website when one exists. Additionally, we have also presented a solution created by industry experts to allow for funds to have a smooth transition.

The third function of this blog series is to address FAQs. At Merrill Corporation, because of our expertise on the subject, we have been working with our clients on both a broad overview and specifics as it relates to XBRL. To assist others that may have similar inquiries, here are responses to a few of the questions we have been asked:

Q: What does this all mean to me?
A: All open-end mutual funds will need to file interactive tagged data (XBRL) of their Risk/Return Summary section during the Prospectus’ annual update or any time a change is made through the year that impacts the Risk/Return Summary.

Q: When do I “go live”?
A: Based on the fund’s fiscal year end, the requirement could impact you as early as late-January/mid-February 2011. The September 30th funds will be the first impacted.

Q: When do I need to start preparing?
A: As of today, there are 101 total days remaining until this ruling goes into effect. Weekends, the upcoming holidays and vacation schedules push that number even lower. Most fund complexes want to have their funds on-boarded at least 30-45 days in advance of the associated EDGAR filings. For those companies who have funds that will file/publish XBRL in January and/or February, they will want to be “ready” by the end of the fall.

Q: What will I need to do?
A: Now is the time to review and select an appropriate vendorto manage the tagging, filing and publishing of your funds. Fund complexes holding approximately 18% of the funds on the market have already selected a vendor and are in the process of on-boarding their funds today. On-boarding your funds in advance will not only ensure that your technology is ready to go, but it is also a great opportunity for your teams to learn and put into practice their roles and responsibilities with the process. The end goal should be “no surprises.”

Our information and ability to answer these questions comes from our research and development of Merrill XBRL Complete, a robust, end-to-end service offering that produces accurate and reliable tagged through a cost effective and efficient process. Additionally, the Merrill Compliance Services Team has the ability to navigate the compliance waters, guiding those in need through the discovery process, on-boarding/implementation, “going live” and periodic updates.

Our overall message is that the time to prepare is now. Don’t be caught off guard. Understand your tagging and publishing needs well in advance to make the proper business decision. Being prepared is the key to a successful transition to XBRL.

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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.

XBRL for Mutual Funds: Are you ready?

2010-09-15T07:53:00.000-07:00

For the past several weeks, this blog has been covering some of the key components of XBRL as it pertains to open-end mutual funds, specifically the requirement to translate the Risk/Return Summary section into XBRL format, as well as to publish the XBRL files to a fund’s website, when one exists.

Merrill Corporation announced its answer to the XBRL question last week – XBRL Complete. This solution provides open-end mutual funds with a robust, end-to-end service offering that produces accurate and reliable data in XBRL format through a cost effective and efficient process.

As we know, starting January 1, 2011, all open-end mutual funds are required to file the Risk/Return Summary section in XBRL format as an exhibit. In addition, the XBRL files must be published to the fund’s website, when one exists. The core functions that are needed to meet these requirements include: tagging, filing and publishing.

This is a simple synopsis of the mandate, and while there are also complex elements to the implementation, when choosing a vendor, there are two basic success factors to be considered:

1. Subject matter experts who are familiar with the ruling and its detailed implications.

Taxonomy? Element? Dimension? Extension? If these words are not in your vernacular, then an XBRL expert who is focused on U.S. mutual funds (not corporate filings or foreign mutual funds) will be a necessary addition to your team.

2. Systematic process for expeditiously and accurately tagging, filing and publishing your data in XBRL format.

An automated tagging solution ensures that your data is tagged correctly – the 1st time and every time. In addition, classes are handled with ease in a well-designed tagging platform.
Once your XBRL-tagged data is ready for filing – it flows seamlessly in our filing engine.
Afterwards, once the XBRL data is accepted by the SEC, our standard publishing option converts the XBRL data into human-readable, HTML-rendered format. Both the XBRL data as well as the HTML version are published to your fund’s website on the same day that it is filed. The HTML view helps your investors understand the content of the XBRL files.

As of the posting of this blog, there are 108 days remaining until the mandate goes into effect. Are you ready? Over the next several weeks, we will continue to answer some of the critical questions regarding the mandate and solutions that demonstrate how ready you need to be.

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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.