The Federal Energy Regulatory Commission (FERC), on June 20, 2019, adopted XBRL (eXtensible Business Reporting Language) as the electronic filing format, mandating all energy companies to submit their annual reports in the XBRL format. This transition was brought into effect with a view to ease the filing process and make the analysis of submitted data more accurate and faster. FERC believes, over time, the switch to XBRL as the reporting standard will help lower the report preparation and filing costs.
Are there any benefits to this change?
XBRL as a financial reporting standard has already been adopted by the SEC and the Department of Energy, among many other regulators across the world. Standardization of financial and operational data is imperative to an efficient and transparent governing of markets/businesses. The primary responsibility of the FERC is to regulate the transmission and sale of natural gas for resale in interstate commerce. Transparency in finances and operations brings in trust and businesses thrive where all stakeholders (internal & external) trust each other. Annual reports submitted by energy companies in a machine-readable and standardized format will help FERC achieve this goal.
How and when will it all transpire?
Here’s a graphical representation of FERC’s plan of implementation of this mandate.