Posted on Thursday, November 19, 2020

On November 19, the Securities and Exchange Commission adopted the final rule Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information. The final amendments do not require registrants to structure disclosures required by the amendments in a machine-readable format as we proposed in the XBRL US comment letter submitted. Our comment letter suggested that the Commission adopt block text tagging to start as this would be beneficial to the marketplace and impose limited requirements on issuers. The final rule notes:

“Requiring registrants to structure MD&A disclosures could create benefits for investors (either through direct use of the data or through reliance on the data as extracted and analyzed by intermediaries) as well as other market participants by enabling more efficient retrieval, aggregation, and analysis of disclosed information and facilitating comparisons across issuers and time periods. 

However, filers could incur increased costs under this alternative, with a block text and detail tagging requirement imposing greater costs than a block text tagging-only requirement. In the Proposing Release, the Commission noted that such costs would be incremental to the costs that registrants already incur to structure financial statement and cover page disclosures in the Inline XBRL format and that concerns as to filer cost might be partially alleviated by the overall decline in the costs of XBRL tagging over time, including for small public companies. “