In the United States, the Federal Energy Regulatory Commission (FERC) regulates and supervises the interstate transmission of electricity, natural gas, and oil. In 2019, the commission launched a mandate for all the energy companies to submit their quarterly and annual reports in an eXtensible Business Reporting Language (XBRL) format. This new technology is an approach to improving the FERC reporting process.
Why Switch To FERC XBRL Format?
The XBRL format is mandated by regulators around the world as a system of creating, collecting, and analyzing high-quality, machine-readable information that facilitates quicker decision-making. Preparing reports in the XBRL format involves ‘tagging’ or marking up the line items in a financial and operational report with XBRL or machine-readable labels. The XBRL format provides the following advantages for the FERC ecosystem:
- Creation of comprehensive information in a machine-readable format, making data comparison and analysis easy for the FERC, the reporting companies themselves, and various stakeholders
- Automated and more efficient reporting process due to high-quality XBRL reporting software
Read more in our blog about the benefits of the FERC XBRL Mandate.
The FERC Taxonomy
The FERC has developed an XBRL taxonomy along with XBRL US. A taxonomy is a dictionary of the concepts that form company disclosures. In other words, a taxonomy is a collection of XBRL tags or machine-readable labels.
The ‘X’ in XBRL represents ‘extensibility’. This means new concept definitions can be built using existing XBRL tags. However, the FERC XBRL taxonomy is a ‘closed taxonomy’, which means it does not allow for extensibility. Energy companies need to disclose only the concepts available in the various FERC forms. Each of the concepts in the FERC forms has an XBRL tag that pertains to it. The FERC taxonomy concepts, in fact, are arranged on the basis of the forms they pertain to.
An updated version of the FERC taxonomy was released on 17 February 2022. The final Release 2.0 taxonomies were made available for testing and the submission of official filings. All 2021 FERC Forms (Nos. 1, 1-F, 2, 2-A, 6, 60, and 714) need to be filed using the Release 2.0 taxonomies.
What Does The FERC Taxonomy 2.0 Bring in?
Before we talk about the updates in the FERC taxonomy 2.0, it needs to be clarified that the new version does not change the type of data that needs to be reported. The vast majority of concepts remain the same. The FERC is only attempting to refine the taxonomies from their previous versions.
In previous versions, upgrading to XBRL HTML made schedules break across multiple pages. But now they are formatted and made to display on a single page.
The page numbers assigned to schedules in Visual FoxPro remain unchanged in the XBRL-based filing system. While using Visual FoxPro, when additional pages were attached to schedules they were assigned a decimal number such as 101.1, 101.2, 101.3, etc.
However, in XBRL HTML rendering of the form, instead of the decimal page number, the original page numbers are assigned (101, 102, 103, etc).
Some other changes
- Correction of Labels
- Addition/Deletion of Line items
- Deletion of concepts that were not being used
Where To Find The Release FERC Taxonomy 2.0?
All communication from FERC regarding the taxonomy update can be viewed here.
You can also view the sample rendering forms and validation rules on the Vendor Files Library.
How To Use The FERC XBRL Taxonomy?
Usually, companies in the scope of an XBRL mandate – whether from the SEC or the FERC – need to understand the taxonomy they need to use for their filings. Understanding the taxonomy is the first step toward filing high-quality reports with the regulator.
However, since the FERC taxonomy is defined on the basis of forms, many of the FERC XBRL reporting solutions offer a schedule-based interface that only requires companies to enter their data in the fields provided. In fact, solutions such as IRIS CARBON® go a step further to allow companies to simply upload a spreadsheet or MS Word document to transfer data to the XBRL reporting solution.
These functionalities remove two of the key issues any company faces in filing FERC XBRL reports – How to tag information with the right XBRL labels, and how to transfer data to the filing platform.