We have been closely following the events around FERC’s adoption of XBRL for quite some time now and keeping companies updated on what they need to know to prepare for the FERC’s XBRL mandate. On 30th April 2020, the IRIS team participated in the webinar hosted by the XBRL US to understand how qualifying entities need to proceed with their XBRL filings. This webinar shed light on important aspects of the FERC draft XBRL taxonomy and addressed important filer queries.
Here are our key takeaways from the webinar.
The scope of the FERC taxonomy
The taxonomy has about 6000 elements and currently covers 10 forms. These forms (1, 1-F, 3-Q for electric companies, 2, 2-A, 3-Q for natural gas companies, 6, 6-Q for Oil Pipeline companies, 60 for centralized service companies, and 714 for electric transmitting utilities) will be required to be submitted in XBRL format.
In the first phase of the mandate, approximately 650 companies will file to the FERC using one of these forms, consequently making them qualifying entities for the FERC’s XBRL mandate. So if your company is filing using any of the forms mentioned above for your quarterly/annual filings, you technically qualify for the mandate. Eventually, as more forms are included in the mandate (in phases), there will be an increase in the number of companies that qualify.
Instructions for preparation and submission
In the first phase, FERC will be accepting only the Instance document, which will be submitted in standard XBRL-based XML file format. Traditional Footnotes have to be used to capture additional information for line items that require a detailed explanation. This footnotes data needs to be in XHTML format. Additionally, keep in mind that you can’t create extension elements in your FERC XBRL report.
FERC is also introducing a footnote flag feature for data items to allow filers to request redaction of confidential data. This feature will alert the FERC to the sensitive nature of the data (meant for FERC use only) and the company’s request to refrain from making the data available to the public. You will also need to run a few crucial pre-submission validations before you hit the submit button. There are fields like Original / Re-submission, date of report, period of the report, datatype validation, unit validation, etc, that need validation with reference to the taxonomy.
Resources for filers
The FERC has provided important resources to help filers starting with a user manual that details the rules that XBRL report filers should comply with. You can also use the Yeti viewer to view the taxonomies. The FERC has also ensured that filers can access form presentations, taxonomy guides, a yeti viewer guide, and blank rendered forms from here. Rendering software will soon be available as an open-source, plug-in for Arelle so that you can review your XBRL file for any errors prior to the final submission. One of the major changes that filers will have to get used to is the shift away from Visual FoxPro to an XBRL software solution. The process of preparing an XBRL file is certainly going to be different from using a FoxPro GUI to key in data into a pre-existing file format. But since FoxPro has become obsolete, especially since Microsoft has decided to pull support for good, an upgrade in business reporting was long overdue and XBRL is the ideal next step in this process.
FERC is contemplating a shift to early 2021 for their XBRL mandate implementation despite the original agenda to implement XBRL this year itself. This, of course, is understandable considering the disruption caused by the COVID-19 pandemic. This period is a good time to explore your options. Remember, a converted XBRL report does not amount to a successful submission. Filing and validation errors are avoidable issues as long as you know what to watch out for. No one wants to redo a financial report once it has been done and dusted. This is why as a qualifying entity, you should choose a reliable XBRL solution for the FERC mandate that will enable you to transition smoothly.
We recommend that you consider IRIS CARBON®, we globally trusted XBRL solution to prepare your XBRL report as per the FERC mandate guidelines. You can also take the opportunity of this transition period to evaluate your current reporting process. Explore premium solutions that can automate, streamline, and manage your reporting process. Find out more about our product offerings here.