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.
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