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- The Last Phase of Implementation of XBRL Filings: Foreign Private Issuers Must Be Prepared to File
The Last Phase of Implementation of XBRL Filings: Foreign Private Issuers Must Be Prepared to File
In 2009, the SEC adopted rules requiring that public companies submit their financial statements in the form of interactive data, and post such interactive data on their corporate websites. The interactive data must be prepared using eXtensible Business Reporting Language (“XBRL”). XBRL allows information to be downloaded directly into spreadsheets and to be easily analyzed. The implementation of the interactive data filing requirements has been phased-in over a three-year period, with the last group of public companies – most of the foreign private issuers – required to submit and post interactive data files for fiscal periods ending after December 15, 2011.
The rules require filers to add a new exhibit to their SEC filings containing financial statements in an interactive data format. The exhibit should be added to quarterly and annual reports, as well as reports on Form 8-K or Form 6-K that contain certain financial statements, including revised audited annual financial statements when previously filed annual financial statements are required to be revised, pursuant to applicable accounting standards. Also, foreign private issuers occasionally may file current interim financial statements pursuant to the nine-month updating requirement of Item 8.A.5 of Form 20-F under cover of Form 6-K which are incorporated by reference into a registration statement. In these circumstances, the interactive data exhibit will be required to be included in the Form 6-K to accompany the traditional format financial statements to which they relate. The interactive data files must also be posted on the company’s website for 12 months. The website posting must occur not later than the end of the calendar day it was filed or was required to file the related registration statement or report with the SEC, whichever is earlier.
Filers that do not comply with any of those requirements will be deemed not current with their required reports and public information and, as a result, will not be eligible to use the short-forms disclosures of Form S-3, F-3 or S-8, or the resale exemption safe harbor provided by Rule 144.
The Phase-in of Foreign Private Issuers
The final phase of the implementation of the XBRL filing reform adds the requirements to foreign private issuers, with respect to their financial statements for the year 2011. Foreign private issuer must file the financial statements with the XBRL exhibit within four months after the end of the fiscal year covered by the report for fiscal years ending on or after December 15, 2011. Thus, for companies with a fiscal year ending on December 31, 2011, the XBRL exhibit must be filed on or before April 30, 2012.
Temporary Relief for IFRS Filers
According to a no-action letter issued by the SEC on April 8, 2011, foreign private issuers that prepare their financial statements in accordance with IFRS as issued by the IASB are not required to submit to the Commission and post on their corporate websites, if any, interactive data files until the SEC specifies on its website a taxonomy for use by such foreign private issuers in preparing their interactive data files.
Generally, once companies are required to submit interactive data, the interactive data files are subject to the same deadlines of the periodic or immediate reports. However, the SEC provide two one-time 30-day grace periods – the first for a company’s first XBRL submission, and the second for a company’s first XBRL submission with detailed tagging of the notes to the financial statements and financial statement schedules.
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