Your work in 2020 sets the stage for an exciting 2021
Campbell Pryde, President and CEO, XBRL US
This week, XBRL US held its Annual General Meeting and invited member leadership to share their insights about 2020, and plans for the coming year. Despite many challenges, much has been accomplished, which sets the stage for an exciting 2021.
Opportunities in 2021
First, there is increasing acceptance of data standards among government regulators. The Securities and Exchange Commission (SEC) continues to propose XBRL for new disclosures like filing fee calculations and resource extraction. And the Commission this year mandated XBRL for new types of reporting entities, including variable annuity and life insurance companies, and closed end investment companies. They also announced this month, the creation of a new Division of Data Science and Analytics under the Division of Economic and Risk Analysis (DERA), which will be headed by Mike Willis, Associate Director at the SEC.
This month the Commission also concretely acknowledged the importance and value of the XBRL US Data Quality Committee (DQC) rules. On November 4, they announced that the FASB had published the proposed XBRL US DQC Rules Taxonomy. The announcement stated “The SEC staff encourages filers, investors, analysts, software service providers, and other interested parties to participate in this public review to continue to improve the process for creating and using XBRL-structured financial statements.” We thank the ongoing support of the members of the XBRL US Center for Data Quality, without which these rules would not be possible.
And separately, SEC Commissioner Allison Herren Lee, in her recent speech at the XBRL US Investor Forum, noted that in addition to the work of the SEC staff and the FASB, she “…commend[s] the work of XBRL’s Data Quality Committee in the development of tools to help enhance accuracy and quality.”
Separately, the Federal Energy Regulatory Commission (FERC) adopted XBRL in a program that goes live next year, and more FERC XBRL requirements are expected to follow.
At the state level, Florida has completed their XBRL Taxonomy, and the team at the Florida Department of Financial Services’ has clearly articulated a strategy emphasizing the importance of the data model. We expect to see their program expanded to the collection of all types of government data over time. In addition, state pilot programs are underway, or being developed, in California, Illinois, Georgia, and Colorado.
Second, the development of an XBRL Taxonomy based on standards developed by the Sustainability Accounting Standards Board (SASB), combined with increasing use of ESG standards by U.S. public companies, makes ESG disclosures another key focus in 2021. Investor demand has resulted in a big increase in sustainability reporting in the US, with 58% of S&P 500 companies publishing these reports, up from 37% in 2011. We are working with SASB to help push this forward.
And finally, new specifications like XBRL-CSV, developed by the specification experts at XBRL International, and open source applications like XULE, XBRL API, and XBRL Renderer, are helping to make XBRL easier to create, extract, and use.
Member Initiatives and Support
These accomplishments would not have happened without the members of XBRL US, who worked tirelessly this year to demonstrate, develop, advocate, and support the XBRL standard. While every member has been involved, I want to point out our member leads:
- Joan Berg of Toppan Merrill, and Chair of the Data Quality Committee (DQC), and Ami Beers of the AICPA. Joan and the DQC have diligently produced multiple rulesets this year, and worked closely with the SEC, the FASB, and the IASB. As noted earlier, the efforts of the DQC have resulted in the FASB incorporating DQC rules into the official, SEC-approved US GAAP Taxonomy. Ami Beers of the AICPA manages the day-to-day activities of the DQC and manages all things XBRL within the AICPA. With her CPA background and in-depth knowledge of XBRL, she plays a critical role in setting the strategy of XBRL US, not only in SEC reporting, but on assurance, public sector, advocacy issues, and any area where accounting plays a role.
- Marc Joffe of the Reason Foundation, and Chair of the Standard Government Reporting Working Group. The tireless outreach and development contributions made by Marc and the numerous public sector and XBRL specialists in this working group have resulted in great progress on pilots and awareness building, despite the impact of COVID-19 on state and local governments.
- Scott Theis of Novaworks, and Chair of the Domain Steering Committee (DSC). Scott, his team at Novaworks, and the rest of the DSC, spent much of the year developing a comprehensive “start to finish” guide for regulators on building good quality taxonomies. This body of knowledge, called the Taxonomy Development Handbook (TDH), is critical to demonstrate the usability of the standard and to help regulators get started. The DSC produced a webinar series to promote the TDH which will continue into 2021.
- Chase Bongirno of Toppan Merrill, and Chair of the Communication Steering Committee (CSC). Chase and the CSC have led the preparation and submission of comment letters to the SEC, the FERC, the SBA, the CFTC, and the BEA, in addition to developing webinars, blog posts, and videos to communicate our message.
- John Truzzolino of Donnelley Financial Services (DFIN), and Chair of the newly formed Regulatory Modernization Working Group, which falls under the DSC and CSC. This new working group aims to establish a dialogue with regulators to ensure the efficient implementation of structured data standards programs. Through John’s efforts, the new working group already held its first meeting with the SEC, and is slated to continue the discussion with the SEC, about pilots and testing environments, in January.
- Patrick Loughry of Toppan Merrill, and Chair of the Earnings Subcommittee, which falls under the DSC, has moved the needle forward on this important initiative to investigate the XBRL formatting of earnings announcements, which was cited by SEC Commissioner Lee in her keynote speech on November 17 where she noted “.. earnings releases, particularly given their often market-moving nature, appear to be another well-suited candidate for tagging.”
Thank you for making this a year of accomplishments. We look forward to working with each and every one of you in the New Year.