Toppan Merrill is often asked by regulators worldwide to comment on specific proposed rules. The content below is in response to FERC Docket No. RM19-12-000.
Toppan Merrill supports and applauds the FERC’s proposal to modernize disclosure for applicable utility and energy companies by mandating XBRL reporting (eXtensible Business Reporting Language). Structured data provides extensive benefits to both regulators, governed entities and the general public.The adoption of XBRL has grown both in the US and internationally. The XBRL format is designed for
financial data, such as these filers report to FERC. To allow regulated entities and vendors time to
prepare for the XBRL mandate, we strongly urge the agency to mandate that affected filers begin
reporting in XBRL in April 2021. The will ensure adequate time for all parties to prepare and successfully
implement the mandate.
XBRL reporting benefits
- The consistent structure XBRL data provides is ideal for financial information making it more easily consumed by both the FERC and data users. Currently, to analyze FERC data, consumers must access one report or download a series of files. Structured data will allow great comparison and reporting.
- An additional advantage of the XBRL standard is that it defines relationships between elements separately from the element itself.
- Tagging allows for data to be validated before it is file, improving quality and reducing error. The reporting taxonomy should drive consistency or validation is limited.
- Over time, XBRL format can decrease costs and improve efficiency for filers by using following uniform standards and programming.
- The transition to XBRL reporting aligns with international and domestic adoption of structured data by both industry and regulators, such as the SEC and EU Inline XBRL mandates.
The SEC adopted standard XBRL format reporting for public companies in 2009. Since that time, the data has been utilized extensively by both the Commission and markets. The SEC provides XBRL financial datasets available for public use. SEC statistics and independent research reflect the extensive use of this data:
We provide evidence of whether users of financial reports are accessing XBRL files, the XBRL component of an SEC filing. The possibility of exempting small companies from the XBRL mandate was raised in a legislative debate in which some argued that XBRL file0- we counted the exact number of user accesses to the XBRL files and their corresponding conventional files in HTML, PDF, or text when users access financial disclosures for SEC filings. During the sample period of the third quarter of 2012 through the first quarter of 2015, we obtained 12,483,699 valid user accesses to 5,016 unique XBRL filings made by 880 small companies that are subject to the legislation. Among the user accesses, 61 percent are to access XBRL files, while 39 percent are to access the conventional (non-XBRL) files. The results suggest that small company investors not only access XBRL files but also prefer them to the non-XBRL files when both are available to download for a filing. Our direct measure of user access provides evidence of possible use of
XBRL files by investors.
We support the agency’s position that XBRL has distinct advantages over standard XML. Although based
on XML, XBRL is focused on financial reporting and is best suited to this tailored disclosure by regulated
Importance of Transition timing to Mandate XBRL
While we support the adoption of XBRL for FERC filers, it is vital to allow enough time for both filers and
vendors to successfully prepare for the mandate. Delaying compliance until April 2021 is appropriate in
current market conditions due to COVID 19 to allow reporting entities and vendors to comply. Most
importantly, this change in technology requires time for both filers and vendors to prepare for such a
significant change in reporting format.
Other regulators have provided similar timelines. The SEC provided a phase-in for companies when it
mandated both standard XBRL for financial statements in 2009 and then later Inline XBRL in 2018. This
allowed all participants to successfully prepare and build on the success. The SEC provided registrants
with a tiered phase in to comply. This ensures greater compliance from the beginning and allows entities
time to transition. Similarly, the EU provided advance notice for filers to prepare for the ESEF mandate
of Inline XBRL.
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