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Legal Update

Upcoming XBRL Compliance Dates

24 May 2010
Mayer Brown Legal Update

Phase-in compliance dates are fast approaching for when financial statements filed with the U.S. Securities and Exchange Commission (SEC) must be in interactive data format using the eXtensible Business Reporting Language (XBRL).

First Group of XBRL Filers—Detailed XBRL Tagging of Footnotes and Schedules. Domestic and foreign large accelerated filers that employ U.S. GAAP and have worldwide public common equity float above $5 billion were required to tag their financial data beginning with their quarterly report on Form 10-Q, annual report on Form 20-F or Form 40-F that included financial statements for a fiscal period ending on or after June 15, 2009. During the first year of filing using XBRL, these companies were permitted to block-tag the footnotes and schedules that accompanied their financial statements. However, starting in the second year of interactive financial data reporting, it is necessary to provide detailed tagging of financial statement footnotes and schedules. For example, calendar year-end domestic companies that were in the first group of filers required to submit interactive financial data exhibits will be required to provide detailed tagging of their footnotes and schedules commencing with their Form 10-Q for the quarter ending June 30, 2010. For the first such detailed tagging only, filers will have a grace period of 30 days from the earlier of the due date or the filing date of the related filing. These companies should actively be determining how they will tag their footnotes and schedules to comply with this requirement.

Second Group of XBRL Filers—Detailed XBRL Tagging of Financial Statements. Large accelerated filers using U.S. GAAP that were not in the group of companies that were required to provide interactive financial data last year will be required to file their initial interactive financial data exhibit beginning with their quarterly report on Form 10-Q, annual report on Form 20-F or Form 40-F that contains financial statements for a fiscal period ending on or after June 15, 2010. Calendar year-end domestic companies in this group must prepare interactive financial data exhibits for their Form 10-Q for the quarter ending June 30, 2010. These companies should have a plan for how to achieve compliance with these new requirements, such as training employees and/or selecting an outside vendor to tag data, determining if any customized tags will be needed, and developing disclosure controls and procedures for interactive financial data. The SEC has provided a grace period that permits the initial interactive financial data exhibit to be filed within 30 days after the earlier of the due date or the filing date of the related filing. Also, for the first year of interactive financial data reporting, companies are permitted to block-text the footnotes and financial statements that accompany the financial statements.

Final Group of XBRL Filers—One More Year to Prepare. Remaining filers using U.S. GAAP, and foreign private issuers with financial statements prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, have until their first quarterly report on Form 10-Q, annual report on Form 20-F or Form 40-F containing financial statements for a fiscal period ending on or after June 15, 2011 to file their initial interactive financial data exhibits. While the deadline for these companies is a little over a year away, it is advisable for them to begin planning and preparing now so they will be ready for the XBRL requirement next year. These companies can benefit from monitoring the precedents that have been filed by, and the interpretations that have been issued with respect to, companies that were in the earlier groups of XBRL filers.

For more information about the interactive financial data requirements see our February 24, 2009, Securities Update, “SEC Adopts Mandatory Use of Interactive Data for Financial Reporting.”

If you have any questions about the issues raised in this Legal Update, please contact the author, at +1 312 701 7304.

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