Your Guide to the 2023 US GAAP Taxonomy Update

As of March 20, 2023, the EDGAR system was updated to support the 2023 GAAP Financial Reporting Taxonomy (2023 GRT)  and other SEC taxonomies releases. The 2023 taxonomies bring a variety of changes, including element updates and modeling changes.

2023 GAAP Financial Reporting Taxonomy Updates Overview

The chart below illustrates the summary of changes in the US GAAP Reporting Taxonomy.

Element and Modeling Updates 

The Financial Accounting Standards Board (FASB) taxonomy team continues to enhance the taxonomy to address required accounting standards updates, common reporting practices, and designing projects focused on improving the utility of the taxonomy. For the 2023 GRT, while various elements and areas were affected, key updates relate to the topics below.

Accounting standards updates 

The 2023 GRT includes changes related to multiple accounting standard updates. Modifications to existing elements, deprecation of  elements, and new elements were added to the taxonomy for these disclosure requirements. 

• Filer action: Filers should review current XBRL® modeling against the new standard and modified elements provided in the taxonomy.

Taxonomy topical project—related party

Updates were made to the modeling for related party reporting. Elements for dimensional structures were added to indicate related party status, and elements were deprecated that were no longer needed. 

• Filer action: Filers previously using the related party line item concepts that are now deprecated should remodel disclosures to convey dimensional approach using financial reporting concepts and existing axes.

Taxonomy topical project—business development companies (BDC)

New elements* were added to the 2023 GRT for the SEC's Final Rule: Securities Offering Reform for Closed-End Investment Companies requiring tagging by business development companies. New typed dimensions were added for identification of investments, securities sold short, and derivative contracts for tagging of information for business development companies.

• Filer action: Filers should evaluate new concepts that may be applicable to their reporting scenarios.  

*Please note that a majority of the new elements were previously introduced in the release of the 2022 Q3 Supplemental GAAP Taxonomy and are available within the US GAAP 2022 Taxonomy in the Workiva platform. 

Taxonomy topical project—SEC SAB No. 121

New elements were added to the 2023 GRT for SEC SAB No. 121 on disclosures for obligations to safeguard crypto assets that an entity holds for platform users. 

• Filer action: Filers should evaluate new concepts that may be applicable to their reporting scenarios.  

Technical taxonomy improvements

The FASB taxonomy team continues to make technical improvements to help filers with taxonomy implementation. The 2023 taxonomies provide improvements to existing features.

• Taxonomy Implementation Notes (TINs): FASB introduced 593 new TINs in the 2023 GRT. FASB categorizes TINs into four areas(Resource, Transition, Usage and Value). A majority of the new TINS are Resource TINs related to FASB GAAP Financial Reporting Taxonomy Implementation Guides. 
• XBRL US DQC Rules Taxonomy (DQCRT): The DQCRT includes XBRL US Data Quality Committee (DQC) rules to provide additional visibility to data quality validation rules for XBRL filings with the SEC. Seven additional DQC rules were added to the 2023 DQCRT bringing it to a total of 22 rules. The SEC EDGAR system validates DQC rules that are included in the 2023 DQCRT.

How should SEC filers approach taxonomy migration this year?

This year's new taxonomy focused on key topical areas (Accounting Standards Updates, Related Parties, Business Development Companies, and SEC SAB No.121) and technical taxonomy improvements. We recommend filers not only focus on deprecated elements but review new elements, modified labels and definitions, and updated data types. 

To provide guidance to filers, the FASB offers a number of resources on their website:

• Webcast—In Focus: 2023 GAAP and SEC Reporting Taxonomy Improvements and SEC Update
• Taxonomy Release Notes
• Taxonomy Implementation and Style Guides
• FASB Frequently Asked Questions (FAQs)

Workiva will host our annual taxonomy updates webinar on May 11, 2023. Click here to register for this event! For other learning opportunities, watch the Workiva calendar of events for upcoming webinars and workshops on filing best practices, XBRL tagging, and more.

Keep in mind that companies are encouraged to use the most recent taxonomy release for their XBRL filing. Even though the 2021 taxonomy is not expected to be removed before June, for those who are currently using the 2021 version, it would be prudent to have a plan in place well before the deadline. Your service providers can also help you on your path to a successful migration this year.

Please also note that 2023 taxonomies are only compatible with other 2023 taxonomies and cannot be used in conjunction with earlier versions of other taxonomies in the same filing. Those filers that will need to comply with the Final Rule for Insider Trading Arrangements and Related Disclosures using the 2023 ECD taxonomy will need to migrate to U.S. GAAP 2023 in order for the taxonomies to be compatible. 
 
If you need assistance with migration, XBRL tagging, or learning more about how Workiva can help, please reach out, and we will get back to you shortly.

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