The benefits of XBRL data are so huge that since its introduction in 1998, XBRL has become a global phenomenon. As SEC iXBRL Filings are increasing and more user groups such as preparers, reviewers, investors, etc. start using XBRL data, the need for a more simplistic view of information has become unavoidable.
On April 9, 2019, the SEC proposed rules that would modify the registration, communications, and SEC iXBRL Filings for Business Development Companies (“BDCs”) and registered Closed-End investment Companies (“registered CEFs”). The Small Business Credit Availability Act (also known as the “BDC Act”) is proposing several amendments, including the use of structured data – XBRL. You may refer to the SEC proposal here.
The key items from the proposed amendment are
- BDCs to submit financial statement information using Inline XBRL (iXBRL) format
- CEFs and BDCs to include structured cover page information in their registration statements on Form N-2 using Inline XBRL
- Information required in a fund’s prospectus be tagged using Inline XBRL
- Filings on Form 24F-2 be submitted in Extensible Markup Language (“XML”) format
The purpose of introducing structured data (iXBRL) filing is
- Structured data requirements (such as Inline XBRL) that will permit investors and others to evaluate fund data
- A new requirement for registered CEFs to file reports on Form 8-K.
Don’t just digitize, XBRLize
What the vision does not recognize, is that just digitizing will not be enough; it is also important to XBRLize. Indeed, the smartest way of attaining the final objective, of getting clean data, would be to adopt XBRL or eXtensible Business Reporting Language. XBRL is an open-source royalty-free XML-based information reporting standard that is gaining rapid acceptance across the world.
But consider this. Do you want the documents or do you want the information in the documents? Equally, is the digitization project about the documents or about the data in the documents? If the answer as one supposes, is that it is about the data, the way to achieve the objective is through the adoption of XBRL. With the advent of XBRL, the world is moving away from document management to information management.
Similarly, with SEC iXBRL Filings, this is another step in the SECs endeavor toward making transparent, clean data on company disclosures easily accessible to all. It is a welcome move and one that we have anticipated for some time. Think of XBRL as the difference between a regular mobile and a smartphone. Everything works just fine in both, but the smartphone makes every operation so intuitive and simple.
With more countries adopting XBRL, the standard has started growing stronger and more refined. More individuals, firms, associations, and governments have started to contribute to testing the standard and making it more robust and meaningful to their daily use. And today, it has evolved to a point where XBRL is the preferred standard for reporting business information across the world.
Reach out to us if you want more information about the several ways BDCs and CEFs file their SEC iXBRL Filings.