You are probably receiving a lot of marketing emails right now from service providers trying to get your XBRL business.

Unless you are a large accelerated filer (market capitalization greater than $700 million), you do not have to comply with XBRL requirements until your 10-Q for the period ending after June 15, 2011.

EdgarEyes, LLC was founded by an ex-public company CFO. We look at the reporting process from the CFO’s perspective. We understand that you cannot afford to spend time and money until you have to.

June 15, 2011 is a long way off. Unless you are a large accelerated filer (market capitalization greater than $700 million), we strongly recommend that you wait until mid-2010 at the earliest to begin your XBRL implementation process. The SEC seems to agree: the following is from page 45 of Final Rule 33-9002 “Interactive Data to Improve Financial Reporting”. These are the long-awaited final rules regarding XBRL reporting, which were released January 30, 2009:

“We expect that smaller companies, which generally are disproportionately affected by regulatory costs, also will be able to provide their reports in interactive data format without undue effort or expense…. We expect that the phase-in will foster the improvement and availability of inexpensive software and that a firmly established phase-in deadline could stimulate the development of such software. We also intend that the third year phase-in for smaller reporting companies will permit them to learn from the experience of the earlier filers. It will also give them a longer period of time over which to spread first-year data tagging costs.”

Again: Unless you are a large accelerated filer, we recommend waiting until mid-2010 to begin your XBRL process. By that time, we expect that significant improvements will be made in the software available for XBRL conversion and that the price of making these conversions will have significantly diminished.

Note that implementation of XBRL is not trivial, and does require a significant amount of work. We recommend a 6 to 12 month lead time in order to create your XBRL reporting process.

XBRL involves creating a second set of financial statements that are machine readable. Proper implantation of XBRL reporting requires a high degree of GAAP accounting expertise. EdgarEyes, LLC was founded by a CPA and ex-public company CFO. We have an affiliated company IncFin, LLC that specializes in helping small public companies with their accounting and financial reporting. For these reasons, we are uniquely qualified to assist you with your XBRL reporting

In summary, XBRL (eXtensible Business Reporting Language) is a technology that will enable visitors to the SEC EDGAR / IDEA website to download directly to their computers the information from company filings.

IDEA (Interactive Data Electronic Applications) is essentially the SEC EDGAR website, re-branded to emphasize the downloadable or interactive nature of XBRL data.

You will need to create an XBRL document, which will be filed as an exhibit to your regular financial statement filing. Note that the creation of this exhibit is the difficult part of the process. Once the exhibit is created, the filing process is the same as it has always been.

XBRL generally applies to any filings that contain financial statements: registration statements, 10-Q’s and 10-K’s, and 8-K’s or 6-K’s that contain financial statements.

Companies will be required to comply with XBRL reporting requirements depending upon the size of the company (see table on page 42 of the SEC rule). The first required XBRL filing will be the company’s 10-Q for the period ended after

June 15, 2009 for large accelerated filers with public float in excess of $5 billion.
June 15, 2010 for other large accelerated filers.
June 15, 2011 for all other filers.

Within the schedule above, there is a two-year phase-in period for each category (see Section I. D. page 23 of the SEC rule):

Year 1: Detail XBRL tagging applies to financial statements only. Footnotes and other disclosures are “block tagged” (not detail tagged for each specific item within the footnotes and other disclosures).

Year 2: Detail XBRL tagging must also be applied to footnotes and other disclosures. Note that this requirement is often more work than the financial statement tagging required in year 1.

A company’s very first filing will have available a 30 day grace period. For example, if a company has a 10-Q for the period ended June 30 that is due August 14, the 10-Q must still be filed on August 14; however, the XBRL data can be filed by amending the 10-Q by September 14.

If a company does not meet its XBRL filing requirements, it will be deemed not to have met its filing requirements at all and will be deemed a delinquent filer.