The Financial Accounting Standards Board said Tuesday the Securities and Exchange Commission has accepted the latest updates to the GAAP Taxonomy for filing financial statements with the SEC.
Both the 2021 GAAP Financial Reporting Taxonomy (GRT) and the 2021 SEC Reporting Taxonomy (SRT) are now available. They use the Extensible Business Reporting Language (XBRL) data-tagging format that the SEC requires for companies to use for filing their financials. FASB also said it has finalized the 2021 DQC Rules Taxonomy (DQCRT) which together with the GAAP Taxonomy are collectively referred to as the “FASB Taxonomies.” The 2021 GAAP Taxonomy includes updates for the latest accounting standards, improvements for two SEC final rules, along with other recommended improvements.
The SEC began mandating that companies use XBRL to file their financials over a decade ago with the goal of making it easier for investors and analysts to compare information across companies and industries. Every year, ever since FASB took over management of the GAAP Taxonomy from an industry consortium, it submits the latest updates to the SEC for approval.
Along with the GAAP Taxonomy, the 2021 DQCRT has now been finalized. It differs from some of the other XBRL taxonomies as it’s narrowly focused on conveying the XBRL US Data Quality Committee’s (DQC) validation rules, especially for regulator use. One of the problems that has hampered adoption of XBRL is the issue of data quality and XBRL US, the industry consortium that has been involved with the GAAP Taxonomy since its inception, has been working on making the data more consistent and accurate. However, the DQRT isn’t intended to be used in SEC filers’ extension taxonomies the way the GAAP Taxonomy or the SEC’s Document and Entity Information Taxonomy (DEI) are used. The DQCRT contains just a subset of the DQC rules. FASB’s taxonomy staff evaluate the validation rules for inclusion in the DQCRT that have been available for use for more than a year to see how the DQC dealt with any feedback received on a validation rule.
Questions about using the FASB Taxonomies and creating and submitting XBRL- tagged interactive data files in compliance with SEC rules should be directed to the SEC. SEC contact details and guidance are available at the SEC’s portal on XBRL.
The SEC said that on Monday, its financial filing system, the Electronic Data Gathering, Analysis, and Retrieval system, known as EDGAR, has been upgraded and now supports the 2021 taxonomies. The 2021 U.S. GAAP Taxonomy and the 2021 SEC Reporting Taxonomy reflect the same taxonomies that FASB made available on its website in December. But the other 2021 taxonomies below are final versions of the draft taxonomies posted by SEC staff for public comment in September:
- U.S. GAAP SEC Reporting (SRT)
- Countries (COUNTRY)
- Currencies (CURRENCY)
- Document and Entity (DEI)
- Exchanges (EXCH)
- North American Industry Classification System (NAICS)
- Risk-Return (RR)Standard Industrial Classification (SIC)
- State and Province (STPR)
The SEC staff doesn’t anticipate the removal of the 2019 U.S. GAAP, 2019 SRT, or any previous year versions of the other taxonomies to occur before June 2021, but they are strongly encouraging companies to use the most recent version of taxonomy releases for their XBRL exhibits to take advantage of the most up-to-date tags related to new accounting standards and other improvements. “Filers should consider transitioning to the 2021 taxonomies for the earliest reporting period that ends after March 22, 2021, but not for reporting periods that end before March 22, 2021,” said the SEC.
See https://www.sec.gov/info/edgar/edgartaxonomies.shtml for a complete listing of supported standard taxonomies. Refer to the final 2021 taxonomies’ release notes for details of the latest changes.
For more information about the FASB Taxonomies, FASB will be hosting a free live CPE webcast on Tuesday, April 6, from 1:00 to 2:30 p.m. EDT. Participants in the live broadcast will be eligible for up to 1.8 hours of CPE credit. To register or to learn more, log on to www.fasb.org.