XBRL Costs

Sep 27, 2010

A very interesting survey that I found today was the SEC survey related to XBRL. What intrigued me was the cost structure of the XBRL filing. The survey states that the first time filers with block text footnotes and schedules on an average require 125 hours, assuming a $250/hr charge the cost is $31K + footnotes and website posting and software the amount is around $40K. This is the lower bound. To mainitain that the SEC states will be less time comsuming, the survey puts the number of hours for future face of the financials filing to be 17, a reduction of 85%.

Once the first hurdle is taken care of, then comes the more detailed footnote filing and that would be another 70 hours leading to $18K. So in total the companies are looking at a total cost of $75-80K considering their footnotes and financials are comparitively straightforward.

Hopefully the costs associated with the charges of XBRL will be overshadowed by the benefits the process will lead to.

http://www.sec.gov/rules/final/2009/33-9002fr.pdf

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XBRL- The final filing dates

Feb 16, 2009

On February 10, 2009, SEC issued the final rule mandating that the 500 largest public companies start to file their financial results using XBRL. The effective date of the new rule is April 13, 2009, which means that most of the largest public issuers are required to file their quarterly results using XBRL for fiscal period ending on or after June 15. By 2010, all accelerated filers must comply with the new rule and by 2011 all public companies will have to file using XBRL.

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What are XBRL taxonomies?

Jan 31, 2007

XBRL Taxonomies,are the dictionaries which the language uses. Each item of data are identified by a specific tag, taxonomies are the categorization schemes that define these tags.

Based on the accounting regulations these taxonomies might change. So different countries have their own taxonomies, within the US different national jurisdictions may have different taxonomies, different industries will have different taxonomies. There are also taxonomies for internal reporting purposes called the GL taxonomy.

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How XBRL works?

Jan 28, 2007

Under XBRL every financial data has its identifying tag, which is computer readable. SO instead of having data as text, it is stored as a tag. Computer can read it, store it, analyze it, and present it in different forms. It will make not just intra company analysis easy, but facilitate inter company analysis. This is how: if the tag for Net Income is same for all companies, as is the case in XBRL, then the computer can generate a report analyzing the Net Income tag for one company against its competitors, other companies in different industries, suppliers, buyers, etc…It can compare data of not just national players but also international players.

The tags provide a range of information about the item, such as whether it is a monetary item, percentage or fraction. XBRL allows labels in any language to be applied to items, as well as accounting references or other subsidiary information.

XBRL can show how items are related to one another. It can thus represent how they are calculated. It can also identify whether they fall into particular groupings for organizational or presentational purposes. XBRL is easily extensible, so companies and other organizations can adapt it to meet a variety of special requirements.

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Who is creating XBRL?

Jan 28, 2007

An international non-profit consortium of approximately 450 major companies, organizations, and government agencies is working on XBRL. It is an open standard, free of license fees.

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What is XBRL?

Jan 28, 2007

eXtensible Business Reporting Language, is a language to communicate the financial data of an organization. It is a process of creating a standard platform/format for reporting. XBRL is a member of the family of languages based on XML, or Extensible Markup Language, which is a standard for the electronic exchange of data between businesses and on the internet.

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