Category Archives: XBRL

XBRL tagging advice from an alpaca?

AIPCAOne of the biggest frustrations – and errors – is around the labeling and tagging of negative values. To that, our XBRL team is always looking for the best insight and advice for clients.

Our lead XBRL CPA strongly suggests that all preparers read this whitepaper. Although it’s inexplicably written by an alpaca, it’s the clearest guide he has ever come across.

To quote the alpaca:

“One of the most common XBRL errors cited by the Securities and Exchange Commission (SEC) continues to be incorrect sign values on tagged amounts in the XBRL files (that is, an incorrect number is input because a negative should have been input as a positive or vice versa). This may have significant implications for users of XBRL-formatted financial statements because this error may cause inaccurate analyses (for example, calculation of incorrect ratios or misinterpretations of gains and losses). Errors in the XBRL files also have implications for the filer.

Not only is a company’s reputation at risk if it includes incorrect information in its XBRL files, but most companies’ XBRL files are subject to the same legal liability as the filed financial statements.”

Getting these values correctly labeled is a simple, yet core quality issue – and we are all keenly aware of the heightened importance of XBRL quality.

As an ongoing demonstration of our dedication to the quality of our clients’ XBRL, our fleXBRL SaaS portal solution (Crossfire) clients all receive a deep, comprehensive training program with 1.) in-person XBRL executive Bootcamps,  2.) module-based online training and our 3.) exclusive double team support. There’s no gap to be bridged between self-service and full-service: our XBRL team correctly labels it as “client service.”

Again, the importance of correctly labeling your positive and negative values cannot be understated. Download the 11 page guide here.

OoooOOOOoooh. AIPCA. Boy, that goes to prove the importance of proper labels!

Have a great weekend.

The Senate takes a dedicated step towards transparency (coughcoughXBRLcough)

Yesterday afternoon, the Senate passed S.994, the Digital Accountability and Transparency Act (DATA) of 2014. This is a bill to expand the Federal Funding Accountability and Transparency Act of 2006, increasing the accountability and transparency in Federal spending.

You can read the bill here: http://thomas.loc.gov/cgi-bin/bdquery/z?d113:SN00994:@@@L&summ2=m&

From the bill:

…include data reporting standards that…

(I) incorporate a widely accepted, nonproprietary, searchable, platform-independent computer-readable format;

(II) be consistent with and implement applicable accounting principles;

(III) be capable of being continually upgraded as necessary;

(IV) are structured to specifically support the reporting of financial and performance-related data, such as that any data produced, regardless of reporting need or software used for creation or consumption, is consistent and comparable across reporting situations;

(V) establish, for each data point, a standard method of conveying the reporting period, reporting entity, unit of measure, and other associated attributes; and

(VI) incorporate nonproprietary standards in effect on the date of enactment of the Digital Accountability and Transparency Act of 2013.

Why we care about the DATA Act:

Even though it is not identified, we’re talking about XBRL. The bit about “computer-readable format” was the clue. What’s important to take away (and appreciate) is that XBRL is not a proprietary reporting process created by the SEC to torture us all in the capital markets. It’s a universal electronic language for ALL financial information. XBRL is also – and this is very core – a culture of accounting accountability.

DataTNGIn an odd juxtaposition, the passing of the DATA Act is the Ying to the Yang of another bill: the Small Company Disclosure Simplification Act, a bill that lobbies for more than half of the companies on US exchanges to stop filing in XBRL. (aka: to revert back to manual spreadsheets and PDFs)

Granted, XBRL has not been the smoothest nor simplest SEC regulation to follow. Nor is it free. XBRL US, the consortium whose charge is to support the implementation of XBRL, puts fees at $2,000 to $25,000 per year depending on the commercial solution and the complexity of the financials. Our fees are on the low-end of that spectrum – thanks to our fleXBRL program.

The new discussions, in light of the DATA Act passing, are what will the new bill do on The Hill? Does accounting accountability play favorites? Does this mean investors should mistrust large companies more than small? Can the capital markets really be just “half compliant” in regard to equity financial fundamentals data?

Regardless if the bill passes or dies on The Hill, we urge emerging growth companies to shop better. XBRL should not be a fiscal concern. We help hundreds of companies throughout their IPO process and into the post-IPO life. We understand that being transparent and compliant are the costs of going public… and we “sell” services that can easily (and fairly) work for all companies, small or otherwise. Size doesn’t matter.

Have a great day.

New report: The cost of regulation not the “success barrier” for small company IPOs

DISCLOSURE: The issue of “ROI of regulation” has been elevated once again, specifically in context to XBRL being viewed as a fiscal barrier for reporting-micro and smallcap companies. If you follow this blog or have spoken with our executives, you’re familiar with our proactive stance on reducing the cost of XBRL compliance… and “spending more” on initiatives that spur growth: aka marketing and shareholder communications. We promote a balanced approach to corporate transparency.

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DAVIDOFFA fascinating report was posted on the Harvard Law School Forum of Corporate Governance  and Financial Regulation blog (3/10/2014) by Steven M. Davidoff, Professor of Law and Finance at Ohio State University College of Law – soon to be Professor of Law at the University of California, Berkeley School of Law.

As the title states, Disappearing Small IPO and Lifecycle of Small Firm, analyzed the maturation of smallcap companies – and the cause for few and fewer smaller companies going (and successfully staying) publicly listed.

From the report: 

Our findings do not support the regulatory explanation for that dearth [ of small IPOs ] but instead we theorize that the evidence supports to a decline in investor demand. Namely, these small IPOs have simply not performed well. They delist at high rates and remain small when listed. This evidence points against legislation such as the JOBS Act or other regulatory tinkering having any material effect on the lifecycle of IPOs or the IPO market itself.

Instead, our conclusions support a counter-narrative that the small IPO drought is simply due to market judgments and changes in the market ecosystem. Investors appear to no longer want to invest in these opportunities because the return is not commensurate with the risk taken. With the decline of supply side forces that pushed these IPOs into the market, they have simply disappeared due to their inability to survive and grow in the public markets.

You can read Professor Davidoff’s synopsis here. Scroll to the bottom of that page to download the PDF of the report. 

Coincidently, Forbes just published (3/6/2014) an article on the costs v. benefits of SOX. You can read that article here.

We speak with micro and smallcap companies executives each day – and we are keenly aware of their frustrations. Both Vintage Filings and PR Newswire offer services and –frankly– pricing expressly tiered for small companies and the regulatory cards that ALL companies are dealt.

The Davidoff report’s bottom line indicates that investors are not hearing and/or understanding the corporate vision. What do investors want? This report will tell you.

Have a great day.

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Hone your work each quarter in advance of the final XBRL Limited Liability expiration

Untitled-1FRIENDLY REMINDER (ignore the bully club cop) If you are still swinging over the Limited Liability safety net, it’s about time take a sharp look at your XBRL work.

Under Rule 406T, the SEC provided for limited liability during the XBRL phase in period. During the limited liability the XBRL exhibits were considered “as furnished” as opposed to being “as filed”. The limited liability starts with the registrants’ first XBRL filing and expires after 24 months, but no later than October 31, 2014. 

Under section 406T, entities are subject to the antifraud provisions under the Securities Act of 1933 and Exchange Act of 1934. However, under 406T, no liability with result for the XBRL files if:

  • The registrant makes a good faith attempt to comply with Rule 232.405 (Regulation S-T general rules for electronic filings; and…
  •  The registrant promptly amends the XBRL exhibit to comply with Rule 232.405 after becoming aware of a compliance failure.

SEC’s Accounting Quality Model (AQM) and Enforcement Priorities

The SEC’s Division of Risk, Strategy and Financial Innovation (RiskFin) is implementing the AQM program (dubbed “Robocop”) that will utilize XBRL among other data sources to assess registrants’ financial statements for anomalies. AQM is designed to identify earnings management, companies that stand out from their peers or other outliers, information that may assist the commission in its examinations.

(In other words - create custom (extensible) tags ONLY if there is no other comparable, appropriate taxonomy defined. )

Talk with your counsel. Also, more information about AQM can be found here.

What is your XBRL workflow? Tell us here and see how fleXBRL will work for you.

Have a great day

We’ll be happy to help The White House Office of Management and Budget with their XBRL

In news leaked yesterday, the Office of Management and Budget is not so keen to work with XBRL – and establish standardized reporting for federal spending. Titled The DATA Act (Digital Accountability and Transparency Act) the legislation was created to – in vocabulary akin to our niche – bring XBRL reporting practices to The Hill.

You can read the original legislation here.

POTUS

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From FCW.com

According to a leaked draft of proposed revisions to the Digital Accountability and Transparency Act, the Office of Management and Budget is seeking to remove the open-government legislation’s dedicated funding stream and edit language calling for standardized governmentwide data elements for reporting federal spending.

The proposed revisions are unacceptable to many of the bill’s key supporters.The original legislation appealed to open-government activists because it would establish integrated data standards using machine-readable languages to allow developers to build applications that would monitor federal spending.

We meet with hundreds of public company that sure as heck wish wish they could remove their “dedicated funding stream” for XBRL. As a silver-lining, our fleXBRL program (please click here) is helping hundreds of issuers meet their transparency obligations to their constituents without overburdening their funding stream.”

XBRL compliance is a cost center. Here is our view on how to make it less invasive.

Have a great day

Microcaps need to “Think Mega” to position and protect themselves in 2014

In case you have not noticed, the SEC has been very active toward ferreting out fraud ~ and have widely publicized their success. The three enforcement groups they announced this year have been a perfect storm, especially with the fraudulent activities surrounding corrupt microcap companies and their “advisors.”

think-mega

The three task forces:

  • The Financial Reporting and Audit Task Force dedicated to detecting fraudulent or improper financial reporting, whose work will enhance the Division’s ongoing enforcement efforts related to accounting and disclosure fraud.
  • The Microcap Fraud Task Force targeting abusive trading and fraudulent conduct in securities issued by microcap companies, especially those that do not regularly publicly report their financial results.
  • The Center for Risk and Quantitative Analytics employing quantitative data and analysis to profile high-risk behaviors and transactions and support initiatives to detect misconduct, increasing the Division’s ability to investigate and prevent conduct that harms investors.

The Microcap Task Force focuses on fraud in the issuance, marketing and trading of microcap securities – developing and implementing strategies that detect and fight microcap fraud, especially by focusing on advisors, such as attorneys, auditors, broker-dealers, and other significant participants – including investors. This task force uses the “big data” tools of the Center for Risk and Quantitative Analytics: assisting the Microcap Task Force via delivering analytical techniques and computing capacity with special expertise in big data mining.

The Financial Reporting Task Force will expand the Microcap Fraud Task Force’s ability to identify violations concerning the preparation of financial statements; issuer reporting and disclosures & audit failures.

How we help transparent microcaps:

  • You must “Think Mega” to separate your company from the pump-and-dump companies that poison the microcap well. Implement the exact same philosophies and shareholder communications practices of megacap issuers. Yes, that means spending some money on investor relations. Start with a true IR website – not just a couple links off to Yahoo, OTC markets or SEC.gov sites. Remember what we’ve learned (click here). Over half of investors will not take a position in a company that does not have an IR website. We have a specially priced IR website JUST for OTC listed companies.
  • Our fleXBRL program assures your company is getting high quality XBRL tagging and filing at a flexible price point that is in concert with a micro-cap’s budget and with how you work. Certainly, there are cheaper providers, but XBRL is very precise and the complexity of error is exponentially higher than straight-up EDGAR. Metaphorically, you need to consider XBRL as “computer code…” and one bad line can be your “glitch” that alerts the SEC’s perfect storm of task forces. You do NOT want that.

2014 is coming. Think Mega!    

Click here to learn about our investor relations websites. Click here to tell us your preferred XBRL reporting workflow.

Have a great day. 

Re-visiting Re-balancing for 2014 (video)

Why have Vintage Filings been successful this year? One reason is that when we talk with clients and prospects, we present a strategic cross-departmental perspective regarding our tactical products. We first introduced this POV last year and it continues to ring true – especially as many of our meeting are C-suite.

This quick video explains. Once it starts playing, be sure to click the HD button, upper right. Apologies in advance for “the spokesmodel.”

It is essential that you minimize your XBRL spend. Per the video, there is a lot of outbound opportunity trapped in there.

Safe travels to you and yours this holiday weekend.

Mr. Data Goes To Washington

DataTNGLast week, the House of Representatives passed The Digital Accountability and Transparency Act – aka the DATA Act.  This act is the most important federal financial transparency bill since 1967’s Freedom of Information Act.

Basically, it’s XBRL for DC… government-wide standardization and publishing of federal spending data.

How this may help us here in the corporate XBRL world:

It further socializes the entire concept of XBRL – standardized financial data reporting. The more people who understand this value will only help “end-user” consumption of the big data already produced by public companies.

Adoption is the missing link for XBRL.

We can also speculate that may of the tags that corporations use now to report could be used for the DATA Act cross-over, particularly if you are a government contractor. Could this be a selling point FOR your company? All your financials will move to XBRL – not just the current “earnings” silo.

Until then, our task remains the same. Accurate XBRL reporting. Reasonable XBRL fees that match your workflow. What is your workflow?

Happy Thanksgiving!

SPECIAL XBRL WEBINAR: Understanding the XBRL Cloud

XBRL Cloud Demonstration Webinar

  • October 30th, 2013 at 2:00 pm EDT
  • Presenter: Cliff Binstock, President & CTO, XBRL Cloud
  • Join us online and/or on the phone:  
  • Webcast: https://join.me/xbrlcloud
  • Phone: 1-712-432-3066  Pin: 991449

cloud

Webinar program discussion includes:

  • A Quick Review of the EDGAR Dashboard
  • A Demonstration of CleanScore
  • Automated Validation–A wide range of technical and financial checks that ensure the integrity of your XBRL filing.
  • Semi-automated Validation–Lists of items which require manual review.
  • Manual Verification–Interactive tools such as the Evidence Package, which help you to perform manual reviews. The consistency checks incorporate rules drawn from the XBRL US Best Practice committee, comprised of representatives from the investor, regulator, accounting, data aggregator and filer communities.

Mr. Binstock is widely regarded as one of the leading XBRL experts. He has more than 25 years invested in the software industry. Cliff is a serial entrepreneur with extensive telephony and bioinformatics background. While working with XBRL, he realized that XBRL provides significant technical challenges to many software developers, and even worse challenges to accountants. He also realized that existing tools and services were technology-focused-as opposed to user-focused. As a result of these observations, Cliff co-founded and presides over XBRL Cloud. He is an alumnus of Carnegie Mellon University.

Rep. Robert Hurt (R-VA) is one hellava XBRL Hold’em Poker player

On Wednesday, Rep. Robert Hurt (R-VA) played a strong hand to the SEC: exempt companies with annual revenue below $1 billion from the requirement to file 10-K and Qs in XBRL. That’s about 80% of companies. Was he bluffing?

From the Data Transparency Coalition:

“Rep. Hurt’s bill reflects justified frustration with the SEC’s failure to deliver useful corporate financial data to investors. The SEC initially adopted the XBRL-based standard to democratize access to market information for investors, help agency investigators better locate indicators of fraud using Big Data analytics, and cut compliance costs for corporate disclosure through automation. However, since the SEC has failed to use this data in its own reviews, the agency hasn’t developed an internal incentive to demand quality data.”

bluffThe bolded statement was dealt from the deck that House Oversight Committee Chairman Darrell Issa in a letter sent on Sept 10 to SEC Chair Mary Jo White asking why the regulator has been so slow to embrace their internal use XBRL. He dropped the final ace, calling out the SEC for relying on “printouts, pencils and calculators.”

Well, as of today XBRL enthusiasts are still at the table. Rep. Hurt is not going to introduce his XBRL bill – but is still holding back a possible legislation for smaller corporations. Assume JOBS emerging growth companies.

So, where does that leave us?

From DTC:

“Today’s hearing opened the door for legislation that would (a) provide limited and temporary exemptions from the XBRL reporting requirement; (b) ensure better enforcement of data quality to make XBRL data more useful for investors; and (c) direct the SEC to adopt structured data formats for its whole disclosure regime, moving beyond the just the financial statements to include proxy filings, earnings releases, lists of subsidiaries, and other submissions.”

One point I disagree with is the unfocused use of the word “investors.” What investors? How investors? Is the SEC speaking with the data architects at the Street portals ie Bloomberg, FactSet? IMHO that’s the only way XBRL will get widely adopted by “investors.” Can the SEC help there?

Some kudos: I know that Rep. Issa’s and Rep. Hurt’s motive was to help investors, but their effort actually help issuers too. The public companies need to see their great – and sincere - efforts show a winfall. The cost of XBRL is immeasurably out of balance to its value for many issuers.

How does Vintage Filings help solve this imbalance?

Simply (and salesy) our fleXBRL program is helping companies meet the obvious challenges of XBRL ROI… cost and time burden. Quality and transparency is a given.

What type of company are you? Please let us know. Match your workflow and budget to our flexible XBRL solution HERE.

Have a great day.