Since 2005, the U.S. Securities and Exchange Commission (the
"SEC") has permitted companies, on a voluntary basis, to
file financial statements in an interactive data format called
eXtensible Business Reporting Language ("XBRL"). XBRL
allows investors and other third parties to download information
from the SEC Web site directly into spreadsheets and to analyze the
data using their own software and investment models. On January 30,
2009, the SEC adopted rules that will require companies to provide
financial statements in XBRL. These rules will be phased in over a
three-year period so as to eventually apply to all reporting
companies that prepare their financial statements in accordance
with U.S. generally accepted accounting principles ("U.S.
GAAP") and foreign private issuers that prepare their
financial statements using International Financial Reporting
Standards ("IFRS") as issued by the International
Accounting Standards Board ("IASB").
The XBRL information is provided in a separate exhibit that does
not replace the financial statements that are filed as part of a
report or registration statement in the regular electronic format.
Large accelerated filers that use U.S. GAAP and have a worldwide
public common equity float above US$5 billion1 must
provide the new XBRL exhibit with their first Form 10-Q, Form 20-F
or 40-F filed for a fiscal period ending on or after June 15, 2009.
For all other large accelerated filers using U.S. GAAP, the same
obligation will begin for fiscal periods ending on or after June
15, 2010. For the remaining companies that use U.S. GAAP or foreign
private issuers that use IFRS as issued by IASB, the obligation
will begin for fiscal periods ending on or after June 15,
Once the XBRL requirement is triggered, all annual reports on Form
10-K, 20-F or 40-F, quarterly reports on Form 10-Q and current
reports on Form 8-K that contain financial statements must contain
the new interactive exhibit. Except in limited circumstances, the
Form 6-K for foreign private issuers will not require an exhibit
with XBRL information. In addition, for filers already subject to
the XBRL requirement, a registration statement under the Securities
Act of 1933, as amended (the "Securities Act"), that
contains financial statements must include the XBRL exhibit.
A filer that is required to provide its financial statements in
XBRL format must also post those same interactive financial
statements on its Web site.
The new rules do not apply to foreign private issuers that do not
prepare their financial statements in accordance with U.S. GAAP or
IFRS as issued by IASB. Because the EDGAR filing system is not yet
set up to accept interactive files that are not prepared in
accordance with U.S. GAAP, foreign private issuers preparing
financial statements in accordance with IFRS as issued by IASB will
not be able to file financial statement information in XBRL early,
on a voluntary basis, until the SEC announces that its system is
ready to accept these files. For similar reasons, foreign private
issuers that do not use U.S. GAAP or IFRS as issued by IASB may not
voluntarily provide the XBRL exhibit with their reports filed with
Companies that fail to provide the required interactive exhibit on
the proper date will not be deemed current in their reporting
obligations and therefore will not be eligible to use a Form S-3,
F-3 or S-8 registration statement (or to elect under Form S-4 or
F-4 to provide information at a level prescribed by Form S-3 or
F-3) for the succeeding 12 calendar months. In addition, they will
not be deemed to have adequate current public information for the
resale safe harbor provided in Rule 144 under the Securities
Interactive data files will be excluded from the officer
certification requirements under Rules 13a-14 and 15d-14 of the
Securities Exchange Act of 1934, as amended. In addition, during
the first 24 months that a company is required to submit
interactive data, the data will not be deemed "filed" for
purposes of specified liability provisions.
As the process of preparing financial information in XBRL format
can be complex, companies are advised to allocate sufficient time
to the preparation of the interactive data file to ensure the
accuracy and timeliness of their XBRL reporting.
1 Calculated at the end of the second fiscal quarter of
the company's most recently completed fiscal year.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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