Happy New Year! 2023 will be an especially important year for data standards and XBRL. The Financial Data Transparency Act (FDTA) was just signed into law. The rapid expansion of XBRL requirements for SEC corporate and investment management companies is placing greater demands on our members and on the Commission itself. And there’s a groundswell of support and development efforts to standardize climate- and ESG-related data worldwide.
XBRL US and our members have a lot of work ahead to continue supporting existing programs like the SEC and FERC, and to ensure that new initiatives are implemented efficiently and effectively. The XBRL US team looks forward to working together with our members to capitalize on the significant opportunities ahead.
President Biden signed H.R. 7776, the National Defense Authorization Act (NDAA) for FY23, into law on December 23, 2022. The NDAA includes TITLE LVIII, the Financial Data Transparency Act (FDTA) which requires 8 federal agencies (SEC, FDIC, OCC, CFPB, NCUA, OCC, Federal Reserve, FHFA) to adopt standardized data requirements. The legislation calls for the use of common identifiers and data standards that shall,
“(i) render data fully searchable and machine-readable; ‘‘(ii) enable high quality data through schemas, with accompanying metadata documented in machine-readable taxonomy or ontology models, which clearly define the semantic meaning of the data, as defined by the underlying regulatory information collection requirements; ‘‘(iii) ensure that a data element or data asset that exists to satisfy an underlying regulatory information collection requirement be consistently identified as such in associated machine-readable metadata; ‘‘(iv) be nonproprietary or made available under an open license; ‘‘(v) incorporate standards developed and maintained by voluntary consensus standards bodies; and ‘‘(vi) use, be consistent with, and implement applicable accounting and reporting principles.”
SEC requirements per the FDTA call for standardized data reporting by issuers of municipal securities, in addition to other entities reporting to the SEC. XBRL US and the University of Michigan Center for Local State and Urban Policy (CLOSUP) recently completed development of the open-source Annual Comprehensive Financial Reporting (ACFR) Taxonomy which can be leveraged to support FDTA implementation for municipal bond issuer reporting. XBRL US and CLOSUP are conducting a free webinar on January 24, at 3:00 PM ET on the data standards available and how governments can benefit.
The SEC adopted final rules with XBRL and custom XML requirements, with more new final rules expected early in 2023. The Commission’s final rule, Insider Trading Arrangements and Related Disclosures, calls for new disclosure requirements for insider trading policies and procedures, and amendments to director and executive compensation disclosures. New disclosure Items 402(x), 408(a) and 408(b)(1) are required to be tagged in Inline XBRL including block text tagging of narrative and detail tagging of quantitative amounts disclosed within the narrative. Registrants must comply with the Inline XBRL tagging requirements beginning with the filing that covers the first full fiscal period beginning on or after April 1, 2023, for companies other than Small Reporting Companies (SRC). SRCs will be required to provide and tag the disclosures after an additional six-month transition period.
A second rule that was finalized, Enhanced Reporting of Proxy Votes by Registered Management Investment Companies; Reporting of Executive Compensation Votes by Institutional Investment Managers, adopts amendments to Form N-PX and requires Form N-PX to be prepared in a custom XML schema.
Nine additional proposed rules with XBRL requirements are in the queue to become final rules, many with expected timing during the first half of 2023. An additional six proposed rules with structured XML requirements are also expected to be finalized in the first half of 2023.
2023 US GAAP Taxonomies published by FASB. The Financial Accounting Standards Board (FASB) made available the 2023 GAAP Financial Reporting Taxonomy (GRT) and the 2023 SEC Reporting Taxonomy (SRT) (collectively referred to as the “GAAP Taxonomy”). The FASB also is making available the 2023 DQC Rules Taxonomy (DQCRT), which together with the GAAP Taxonomy, are collectively referred to as the “FASB Taxonomies.”
The 2023 GRT and 2023 SRT are expected to be accepted as final by the SEC in early 2023. The FASB Taxonomies are available on the FASB’s Taxonomy (XBRL) pages and through these links: 2023 GRT, 2023 SRT, 2023 DQCRT.
FASB proposed taxonomy improvements for ASU-Leases (Topic 842): Common Control Arrangements. Release notes have been published for a comment period scheduled to end on January 26, 2023. Comments should be sent to email@example.com. The changes address the proposed Accounting Standards Update on accounting for leases between entities under common control: Leases (Topic 842) – Common Control Arrangements.
SEC reopened comment period for Executive Compensation Disclosure (ECD) Taxonomy. The SEC has reopened the comment period for the draft ECD Taxonomy which has now been updated to reference the 2023 version of the US GAAP Taxonomy. Comments must be submitted by February 17, 2023 to StructuredData@sec.gov and include “Draft 2023 ECD Taxonomy” in the subject header. Taxonomy files are available at https://www.sec.gov/structureddata/
osddrafttaxonomyfiles. The new draft 2023 version (unlike the previous draft version released on November 4, 2022) references the 2023 version of the U.S. Generally Accepted Accounting Principles (GAAP) taxonomy.
XBRL US comments on MSRB Request for Comment. In response to the Municipal Securities Rulemaking Board (MSRB) RFC on Draft Amendments to MSRB Rule G-32 to Streamline the Deadlines for Submitting Information on Form G-32, the XBRL US letter encouraged the MSRB to consider allowing municipal securities bond issuers to optionally submit their continuing disclosure documents which include event-based and financial disclosures in fully searchable, machine-readable format. Using the Inline XBRL format would render the data reported in both human- and machine-readable format.
XBRL US Events
Webinar: Government Financial Reporting – Data Standards and the Financial Data Transparency Act, January 24, 2023, 3 PM ET
The recently passed Financial Data Transparency Act (FDTA) requires data standards to be used by municipal bond issuers for financial statement reporting to the Municipal Securities Rulemaking Board (MSRB). Attend this 60-minute session to explore government data standards, find out how governments can create their own machine-readable financial statements, and discover what impact this legislation could have on government entities. Most importantly, discover how machine-readable data standards can benefit state and local government entities by reducing costs and increasing access to time-sensitive information for policy making. Hear speakers from the City of Flint, Michigan, the University of Michigan Center for Local State and Urban Policy (CLOSUP), Public Sector Credit and XBRL US. Register: https://xbrl.us/events/230124/
Webinar: Digitizing Environmental Social Governance (ESG) Disclosures, February 2, 2023, 1:00 PM ET
International investors with global portfolios are increasingly calling for reliable, consistently reported data from companies on climate and other ESG matters. Regulators and standard setters are turning to XBRL as the appropriate data standard to render ESG data fully machine-readable and searchable. Attend this 60-minute session to learn about the benefits of ESG digitization and get the latest updates on US and global activities surrounding digital ESG. Explore findings from a case study on preparing ESG data in XBRL format featuring The Gap, Inc. Register: https://xbrl.us/events/230202/
Webinar: Solutions to Common Issues in XBRL Preparation, February 7, 2023, 3:00 PM ET
Corporate issuers submitting their financials to the Securities and Exchange Commission (SEC) are faced with many choices when working with the XBRL US GAAP Taxonomy. Attend this session to learn how to navigate the taxonomy and successfully produce high-quality XBRL-formatted financials. Find out about resources available from the SEC, the Financial Accounting Standards Board (FASB) and XBRL US that can provide valuable input to your preparation process. Register: https://xbrl.us/events/230207/
Upcoming XBRL US Steering Committee and Other Member Meetings
The next Data Quality Committee will be held on Wednesday, January 25, 2023. Get information about the Committee and register to attend: https://xbrl.us/dqc.
The Domain Steering Committee will meet Tuesday, January 17, at 2PM ET. https://xbrl.us/events/dsc-230117 – all XBRL US Members are invited to attend
The Communications Steering Committee will meet Tuesday, January 25, at 3 PM ET. https://xbrl.us/events/csc-230125 – all XBRL US Members are invited to attend
The Regulatory Modernization Working Group will meet Tuesday, January 10, at 3 PM ET. (firstname.lastname@example.org for details)
The Standard Government Reporting Working Group will meet Tuesday, January 31, at 12:30 PM ET. (email@example.com for details)
XBRL US Members are encouraged to attend and get involved.