7 Steps to Successful SEC IFRS Adoption and XBRL Tagging

15 Dec was an important milestone for foreign private issuers (FPIs). On or after this date, FPIs filing in the IFRS Taxonomy with the U.S. Securities and Exchange Commission (SEC) need to file quarterly and annual financial statements in XBRL^®. This deadline for IFRS XBRL adoption was announced on 1 March, when the SEC published the addition of the SEC 2016 IFRS Taxonomy to the EDGAR^® Filer Manual on its website. In preparation for the busy annual reporting season, filers from countries around the world are working to make sure they are on track with the new requirements.

To help benchmark your preparedness for this new SEC requirement, this blog post outlines seven steps required for a successful IFRS XBRL adoption process.

7 steps for successful SEC IFRS XBRL adoption

1. Identify team resources
   Establish the team that will be responsible for preparing and filing your XBRL. The number of people you need on the team will be determined by the size of the document and the complexity of your company disclosures. A good approach for first-time filers is to dedicate a power user who can lead the project and develop a plan to populate XBRL knowledge throughout the organisation over time.
2. Plan your reporting calendar, including new XBRL milestones
   Being organised and on top of deadlines is extremely important as you approach this new mandate. XBRL is an additional responsibility that must be incorporated into your process, rather than tagging it on at the end. Establish XBRL milestones, integrate them throughout your filing calendar timeline and schedule regular reviews to make sure deadlines are met.
3. Research how you will be affected
   Gather all the information you can about the XBRL and the IFRS Taxonomy to make sure you understand the scope and complexity of first year XBRL implementation. Refer to these helpful resources as you get started:
   • Using the IFRS Taxonomy: A Preparer’s Guide
   • IFRS and EDGAR Filer Manual
   • IFRS Taxonomy Illustrative Examples
   • XBRL for Foreign Private Issuers: Five Steps to Jump-Start Your New SEC Reporting Requirement
4. Establish a relationship with a trusted partner
   The XBRL tagging and reporting burden is heavy—it adds time to your reporting cycle. Save time throughout your process to make up for these additional time constraints by leveraging a proven technology partner. It is imperative that your partner not only offers XBRL-tagging support but will also streamline the amount of time the rest of the reporting process requires.
5. Tag and review in batches
   Do not wait to get started—XBRL tagging is not a task to be left until the end of the cycle. First-time filers may incorrectly assume that element selection is the main task in preparing XBRL, but there are many other technical requirements to consider. Filers are encouraged to seek outside support. The process is more complicated than choosing the correct tag—there are technical issues specific to XBRL to ensure validity and data quality of your XBRL filing.

   A few things to be aware of during reviews: maintaining the presentation linkbase, using the correct scale and unit, and maintaining the accurate use of positive and negative signs. Begin the tagging and review of the shell document as soon as possible and perform in batches. Complete this process by the beginning of the new document drafting cycle.

6. Establish a process for directed reviews
   Focus the content of your reviews on completeness, accuracy and proper tagging based on underlying reporting requirements, rather than presentation style. Presentation order of the disclosure may not always match the presentation order of the taxonomy. Take a close review of the taxonomy before choosing to create an extension. Do not judge the quality of the tagging based on the rendering as the SEC viewer rendering engine has its own logic and is not meant to replicate the original document style.
    
7. Maintain XBRL accuracy
   It is essential to keep your XBRL tags up to date throughout the document drafting process. Avoid waiting until the last minute to update XBRL, especially for the initial implementation. For filers who are not using an integrated platform like the Workiva platform, it is important to note that modifying your document could result in XBRL changes, such as adding and deleting tags. Keeping changes in sync between the document and XBRL is often a manual process that warrants extra attention.

With the annual reporting season fast approaching for both U.S. filers and foreign private issuers, time is of the essence—you do not have time to question if your XBRL project will meet SEC standards. If you find gaps in your ability to execute on these new requirements during your process assessment, Workiva is available to assist—we offer a variety of XBRL consulting, training and support services to ensure successful implementation of FPI support for XBRL. Find out how the Workiva Professional Services team can help you.

XBRL^® is a trademark of XBRL International, Inc. All rights reserved. The XBRL^TM/® standards are open and freely licensed by way of the XBRL International License Agreement.

EDGAR^® and SEC^® are trademarks of the U.S. Securities and Exchange Commission. Workiva Inc.'s products and services are not affiliated with or approved by the U.S. Securities and Exchange Commission.