Back in March when the SEC announced the IFRS Taxonomy mandate for Foreign Private Issuers, who knew the December 15th date for impacted companies would sneak up on us as it has. Whether you’re late to the game or simply gut-checking where you should be in the process, read on for more information on what’s changed, what you’ll need to do, and best paths to compliance.
In March 2017, the SEC announced official support for IFRS XBRL Taxonomy. This means that foreign private issuers (FPIs) must submit financial data in XBRL beginning on annual reports containing a December 15th fiscal period or later. The mandate applies to all FPIs who file reports on 20-F, 40-F forms, or 6-K forms - and brings FPIs in sync with US GAAP-based SEC registrants.
What do Canadian FPIs need to do now?
It’s easy to underestimate the work required to submit in XBRL for the first time. To meet the SEC’s mandate, FPIs must complete five key steps:
- Build a company extension XBRL taxonomy in IFRS
- Apply the taxonomy to reports
- Validate the taxonomy and tagging for quality
- Review and approve the XBRL taxonomy and tagging
- Submit the filings in XBRL format
Path to Compliance
FPIs must start building their strategy for XBRL compliance today. That means opening discussions with key stakeholders in their company and researching the paths and solutions available. Start here:
- Prepare early. There’s no penalty for being ready for XBRL ahead of time, but the SEC will impose serious penalties on companies that fail to comply.
- Open an internal dialog. Heads of financial reporting can and should take the lead, starting the XBRL conversation with key stakeholders – both their department and the C-suite.
- Seek guidance. The smartest FPIs will turn to partners who have helped companies through exactly this change before.
- Explore the software. This means reviewing internal processes, researching XBRL tagging software, and understanding how they will work together.
- Weigh up all your paths to compliance. Evaluate the value of doing XBRL in-house, outsourcing XBRL tagging, and outsourcing both XBRL tagging and report content preparation.
How to get help
If you’re looking for background on the ruling, or more detail and specifics on what to look for in a software solution for FPIs, download Certent’s Canadian Guide to Understanding SEC Mandate for FPIs. Canadian FPIs with questions or concerns about complying with the SEC’s ruling can also email our dedicated hotline: XBRLinCanada@certent.com.