As indicated in previous posts on this blog, the SEC’s rule for interactive data is a major milestone in XBRL implementation.  However, it is important that there are ntinued improvements in XBRL taxonomies, especially with respect to disclosures outside the financial statements and footnotes.

The SEC rule made specific reference to disclosures outside the financial statements and footnotes:

We did not propose, and are not adopting, a requirement that filers provide interactive data for their Management’s Discussion and Analysis (MD&A), executive mpensation, or other financial, statistical or narrative disclosure . . . In deciding not to require the tagging of this information at this time, we agree with the mmenters who believed that more experience with interactive data and a greater understanding of the sts and time associated with mpliance with the requirements as proposed is needed before expanding the requirement to other information. We will ntinue to nsider, however, the advisability of permissible optional or required interactive data for disclosures made outside a set of financial statements prepared in acrdance with U.S. GAAP or IFRS as issued by the IASB or related financial statement schles required under mission rules (33-9002, pages 40-41).

The Enhanced Business Reporting nsortium (EBRC) is currently in the process of improving the taxonomy for Management’s Discussion and Analysis (MD&A).  As a follow on to the American Institute of Certified Public Acuntants (AICPA) Special mittee on Enhanced Business Reporting, the EBRC was formed by four founding members: Pricewaterhouseopers, Microsoft, Grant Thornton, and the AICPA. The mission of the EBRC is to establish a nsortium of investors, creditors, regulators, management, and other stakeholders to improve the quality, integrity, and transparency of information used for decision-making.  In particular, the EBRC is working on enhancing the reporting model to focus not only on financial information, but also on a range of ntextual and nonfinancial information that provides an enriched understanding of mpany performance, value drivers, strategies, and potential.

The current MD&A taxonomy nsists of approximately 70 tags with most of the elements at the same hierarchical level. This required the creation of numerous mpany-specific extensions to make the taxonomy useful for those mpanies that tagged their MD&A under the SEC’s Voluntary Filing Program. While the new taxonomy being proposed by the EBRC currently only nsists of approximately 140 tags, it has a structure that should significantly simplify the tagging of the information as well as facilitate aess for users of this information.

It is hoped that the financial reporting supply chain will openly llaborate on the proposed taxonomy in order to create more detailed tags so that narrative information can be provided in an interactive data format. Although the SEC is not requiring the tagging of narrative information at this time, the ability to tag and nsume nonfinancial information (i.e., the narrative type of disclosures that are made via MD&A and other channels of rporate mmunication) is increasingly useful to both mpanies and nsumers of business information, and is vital to providing enhanced transparency in the markets.

The EBRC invites interested parties to review the proposed MD&A taxonomy at this web Follow the instructions for logging in and the MD&A taxonomy will be midway down the navigation tree once you are logged in.