July 2024 Newsletter

July, 2024

Multiple FSOC Agencies Approve and Publish FDTA Rule Proposal. The Federal Deposit Insurance Corporation (FDIC), Securities and Exchange Commission (SEC), Consumer Financial Protection Bureau (CFPB) and the Federal Reserve Board published the draft rule proposal on their websites. The FDIC was the first to publish the rule which was announced through a statement by Martin J. Gruenberg, the Chairman of the Federal Deposit Insurance Corporation, who noted, “Having relevant and accurate information has always been an essential element of effective financial regulation. The establishment and subsequent adoption of data standards across the nine agencies that are issuing this proposed rule will advance the greater use, sharing, and interoperability of the information collected by the agencies.” Announcement releases were subsequently issued by the SEC, the CFPB, and the Federal Reserve.

The rule proposes to establish the International Organization for Standardization (ISO), Financial Services – Legal Entity Identifier (LEI) as the legal entity identifier joint standard. The proposal describes the properties of data standards required in the FDTA and notes:

“There are currently various data transmission formats that generally have these properties – for example, there are methods of using Comma Separated Values (CSV) or other delimiter separated files, eXtensible Markup Language (XML), and Java Script Object Notation (JSON) in manners that satisfy these properties. In addition, HyperText Markup Language (HTML) and Portable Document Format (PDF) are data transmission formats that may satisfy these properties in limited circumstances. For example, HTML may satisfy the standard if the data within the HTML document conforms to a schema (e.g., Inline XBRL), and PDF may satisfy the standard if the data within the PDF conforms to specification “A” (PDF/A) that uses advanced features for tagging fields with a reference schema and taxonomy and provides necessary metadata that allows for automated data extraction. HTML and PDF documents whose data does not conform to any such schema and taxonomy would not be considered machine-readable as that term is defined in the FDTA because the data contained in such HTML and PDF documents cannot be easily processed by a computer without human intervention while ensuring no semantic meaning is lost. Regarding schema and taxonomy formats, XML Schema Definition (XSD), eXtensible Business Reporting Language (XBRL) Taxonomy, and JSON Schema are currently available schema and taxonomy formats that have these properties.”

Several of the affected agencies have not yet approved the rule proposal. Interested parties are encouraged to comment during a 60-day public exposure period, which will begin after the proposed rule is approved by all agencies and published in the Federal Register.

XBRL US responded to the Department of Commerce (DOC) Request for Information on AI and Open Government Data Assets.

The DOC RFI aimed “to understand ways to improve Commerce’s creation, curation, and distribution of its open data assets to facilitate the development and advancement of AI technologies such as generative AI.” The XBRL US letter stated, “We agree with the Department of Commerce view that AI systems should be powered by data that is not just machine-readable and accessible, but that is ‘machine-understandable’. Artificial intelligence has enormous potential but AI algorithms must leverage high-quality, unambiguously understood data to generate reliable, useful results. The path to providing data of high integrity and accuracy is through open, nonproprietary (free) data standards, an approach that has been successfully employed around the world.”

FASB announced proposed GAAP Taxonomy Improvements for public exposure. The Financial Accounting Standards Board (FASB) re-exposed for comment, Proposed GAAP Taxonomy Improvements for Proposed Accounting Standards Update—Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The Taxonomy Staff is interested in feedback on its revised proposed taxonomy improvements for the disaggregation of income statement expenses. The comment period ends on August 30, 2024.

Separately, the FASB issued proposed GAAP Improvements for the Proposed Accounting Standards Update— Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for a Share-Based Payment from a Customer in a Revenue Contract, to address stakeholder feedback related to (1) the application of derivative accounting to contracts with features based on the operations or activities of one of the parties to the contract and (2) the diversity in accounting for a share-based payment from a customer that is consideration for the transfer of goods or services. The comment period ends on October 21, 2024.

To respond to either request, submit comments to xbrled@fasb.org.

XBRL US Events

Webinar Replay: Preparing for Digital, Machine-readable Climate Reporting: Impact on Business
Global climate-reporting mandates call for data to be reported in structured XBRL format to improve data integrity, increase interoperability, and reduce reporting burden. Attend this 90-minute session to learn about XBRL and assurance requirements in non-US and US markets, including state initiatives in California, New York, and Illinois. Find out why investors are demanding climate-related data and how they use it. Speakers join from the AICPA, the London Stock Exchange (LSEG), FactSet, XBRL International and XBRL US. Register to watch the replay: https://event.on24.com/wcc/r/4611087/
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Public Review – Version 25 of Data Quality Committee Rules
The XBRL US Center for Data Quality kicked off its 25th public exposure period which will end on September 9, 2024. This version includes three new rules and non-negatives for filers using the IFRS 2024 Taxonomy. To learn more and participate go to: http://xbrl.us/public-review.

XBRL US Meetings

Data Quality Committee
The next Committee meeting will be held Wednesday, September 25. Register to attend online: https://xbrl.us/events/dqc-240925

The Domain Steering Committee will meet Tuesday, August 27, at 2 PM EDT. https://xbrl.us/events/dsc-240827 – all XBRL US Members are invited to attend

The Communications Steering Committee will meet Tuesday, August 27, at 3 PM EDT. https://xbrl.us/events/csc-2400827 – all XBRL US Members are invited to attend

The Regulatory Modernization Working Group will meet Tuesday, August 13, at 3 PM EDT. (membership@xbrl.us for details)

The XBRL US Standard Government Reporting Working Group will meet Tuesday, August 27, at 12:30 PM EDT. (membership@xbrl.us for details)

The XBRL US Technical Advisory Committee (XTAC) will meet on Wednesday, August 7, at 4 PM EDT. (membership@xbrl.us for details)

XBRL US Articles, White Papers, and Blogs

Blog Post: Identifying the Obligor for Municipal Securities – The complexities of the municipal bond market make it challenging for users of bond data to quickly find what they need when searching in the Municipal Securities Rulemaking Board (MSRB) Electronic Municipal Markets Access (EMMA) system. The Financial Data Transparency Act (FDTA) presents an important opportunity to enable easier, more concrete search capabilities at a granular level by leveraging entity identifiers and standardization of data. The XBRL data standard and the Legal Entity Identifier (LEI) can be used together to identify the issuer and obligor responsible for a specific security and associate an identifier for the security and the obligor to facts reported about the security to obligor relationship. Read: https://xbrl.us/identify-municipal-obligor

Blog Post: Defining Success for the FDTA – The standardization of regulatory requirements called for in the FDTA is of critical importance to us all. Why? Campbell Pryde, XBRL US CEO discusses the key ingredients to success FDTA: reduced cost, flexibility, and better data, and how these goals can be met. His post also addresses successful standards programs like railroad tracks, shipping containers and the UPC code, and the objections that they ultimately overcame. Many of these objections are the same ones we hear about the FDTA today. Read: https://xbrl.us/defining-fdta-success/

Blog Post: Stay Within the Guardrails for Successful Data Quality
Since 2015, the Data Quality Committee (DQC) of XBRL US has been creating freely available validation rules that provide clearly defined guardrails for corporate issuers to follow. The accomplishments of the DQC can be attributed to standardization, attention to detail, ease-of-use, and perhaps most importantly, collaboration. Staying “within the guardrails” has helped issuers improve data quality. Read: https://xbrl.us/guardrails.

XBRL US Members are committed to engaging and collaborating with other members, contributing to the standard through involvement of their teams, and striving to build awareness and educate the market. Members of XBRL US represent the full range of the business reporting supply chain.

Not yet an XBRL US member? Maybe it’s time to consider joining XBRL US for yourself ($55 – $500/ year) or your organization (fees vary). Find out more about the benefits of membership and how to become involved by visiting https://xbrl.us/benefits.