2014 US GAAP Taxonomy: Let's Make It Usable
The Financial Accounting Standards Board (FASB) has published the draft 2014 US GAAP Taxonomy, which is available for public comment until October 31. The taxonomy release notes, published along with the taxonomy, provides a summary of all the major changes, including ASU changes, structural changes, and other modifications. After the FASB has reviewed and incorporated the public comments as appropriate, we expect the SEC to approve the 2014 Taxonomy for release in early 2014. You may be wondering: Should I comment? Will my comments be heard? Absolutely. At WebFilings, we are committed to providing our customers with efficient and effective ways to gather and structure—or tag—data. We appreciate the commitment of the FASB, and we acknowledge the efforts of its staff to listen to preparers and users of the data on how to improve the taxonomy. Therefore, we encourage all of our customers, and indeed all filers, to review and provide comments on the taxonomy. However, incremental changes to the taxonomy alone are not sufficient to address concerns about its usability. To address those concerns, the SEC needs to do the following:
- Require revision of filings that contain tagging errors. This is a simple rule. If it is important to tag the data, it is important to tag it correctly in every aspect.
- Use structured data to make regulatory oversight more efficient and effective. To accomplish this objective, the SEC needs to develop and make available for public comment a detailed plan on how it will transform its oversight processes using structured data. After all, if the use of structured data isn’t improving the efficiency and effectiveness of regulatory oversight, what’s the point? The way investors use structured data is directly related to its use by the SEC. If it isn’t good enough for the SEC, it isn’t good enough for an investor either.
- Find out what users of the XBRL-formatted data need. According to a study released by Columbia University in February 2013, investors want tagging errors, including unnecessary extensions, to be eliminated. But what else should change? For example, do investors, intermediaries, and academics want the SEC to eliminate ambiguity in modeling choices in certain, or even all, instances? The big questions are: What changes do investors want in order to incorporate the use of structured data into their existing workflows? And, can those changes be made without any additional burden being placed on the filers?
If you have ideas or thoughts about the 2014 Taxonomy that you would like to share with the FASB, leave your comments here until Oct. 31, 2013. With the new taxonomy on the horizon, you are responsible for migrating to the 2013 Taxonomy. Are you ready? With the help of Wdesk and WebFilings industry-leading customer service, your transition will be painless. Click here for more information about how the Professional Services team can help you migrate.
About the Author
Mike Starr is Vice President of Governmental and Regulatory Affairs. He previously served as the SEC Chief Accountant’s advisor with a focus on investors’ financial information needs and the role of structured data in meeting those needs. Prior to his work with the SEC, Mike served as Chief Operating Officer for Grant Thornton International Ltd., where he oversaw global strategy and public policy. He earned a Bachelor of Science in accounting from Oklahoma State University (OSU), and in 2010 was recognized as an OSU distinguished accounting alumnus and inducted into the School of Accounting Hall of Fame.