XBRL for Mutual Funds: Are you ready?

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.
  

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.

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.

This Week in XBRL: What Makes an XBRL Expert?

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.

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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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 – Reviewing XBRL-Tagged Data

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."

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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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.

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:

1. The initial effectiveness of any new fund filed as a Pre-Effective Amendment to the N-1A;
2. The annual update of previously effective funds filed as a Post-Effective Amendment to the N-1A, pursuant to Rule 485(b);
3. Definitive materials, after going effective, and filed within five days of effectiveness, pursuant to Rule 497(c);
4. 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 – Filing and Publishing Considerations (Part 2)

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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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: Further your XBRL Education

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

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

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

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

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

Dodd-Frank Legislation

Benefits of Open Data

Governance Risk Compliance Software

Improving SEC Filing Submissions

Unusual Uses for XBRL Tagging

Learning from SEC Filing Reviews

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

Last Year in XBRL: A Launching Point for the Future

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

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

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

So, where does this leave us?

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

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

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

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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: “We’ll Make it Better, the Second Time Around”

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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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: For and Against XBRL Adoption

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.

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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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

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.

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.

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

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 – Filing and Publishing Considerations

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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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: December Headlines

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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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: XBRL and International Finance

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.

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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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: Improving Quality of Submissions

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.

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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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

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.

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):

1. Time Commitment - "The time spent on the XBRL may vary significantly, and will be split between internal and external resources."
2. 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)?
3. 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.
4. 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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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: Best Tagging Solution is Solid Mix of Technology, People and Process

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.

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

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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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: Bryant University Hosts 11th Annual XBRL Conference

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.

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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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.

Greg Carter Explains the Broader Possibilities of XBRL

Lorraine Lawson, of IT Business Edge, interviewed EDGAROnline CEO Greg Carter this week, pulling a wealth of information from him on the possible future of XBRL. Carter believes that the language holds the key to more successful business to business (B2B) companies.

You could really say that it would be used from one organization’s ERP or consolidated financial system and uploaded directly to a regulatory agency. It wouldn’t necessarily (be used), at this point, though it’s perfectly applicable to B2B transactions between businesses, but that’s exactly where it’s headed.

It’s a standardized way of communicating a transaction, whether that transaction is the close of a quarter, the close of the year or the shipment of a cargo container. That’s actually an example of an industry that is actively looking at XBRL: the shipping and logistics industry.

Much like recent efforts to promote XBRL on the National level, the language can also bring efficiency to a smaller scale. XBRL data is similar to today’s popular QR codes. It contains a large amount of data, in a small, easily-read package. Businesses using XBRL reporting could keep a better eye on their transactions, according to Carter.

But that isn’t the only industry looking at this technology.

Lawson: What’s it competing with in terms of standards in the B2B space?

Carter: There are a variety of older standards, such as HL 7 in the health care industry, that are kind of pre-XML standards.

 The beauty of XBRL is that it comes with a bigger framework. So, previously, organizations agreed, and HL 7 is an example. They came up with a static standard that described a relatively thick set of data points and there were tools that were kind of hardcoded to understand HL 7.

The way XBRL is used is a given set of trading partners or interested parties that come together. They agree upon a core taxonomy that represents maybe the minimum information required, or the maximum information required or different levels of information. Not only can they define the information structure, the taxonomy, they can also capture a lot of business rules that allow that information to be very dynamically validated and to be accurately represented…

The interview is a long, but fascinating look at the future of XBRL. If you have the time, I strongly suggest reading it, but the basic message Carter presents is that we have barely tapped the limits of XBRL. There are few businesses, and even fewer industries, that cannot take some benefit from the XBRL reporting language. Where do you see the future of 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.