Questions on Interactive Data
MARK STORY: Hello, and welcome to the second in a series of podcasts produced by the Office of Interactive Disclosure of the Securities and Exchange Commission, or the SEC. My name is Mark Story and I will be your host of today's podcast. This is the second in a series of podcasts is designed to introduce people to interactive data, or what some people call "XBRL." The Office of Interactive Disclosure at the SEC heads up our interactive data efforts.
Before beginning, as usual, I need to let you know that the views we express today are our own and not necessarily those of the Securities and Exchange Commission, of its Chairman, of its Commissioners, or of my colleagues on the staff. Those of us who work at the SEC are all required to add that disclaimer whenever we speak publicly.
Moreover, this will be the latest in a series of podcasts about the new world of interactive data. We encourage all questions and comments. If you have one about interactive data generally, please send it to our email address: Ask-OID@sec.gov. That's A-S-K- dash — O-I-D@sec.gov.
With that out of the way, let me introduce today's guest, Michelle Savage, the Vice President of Adoption and Communication of XBRL US. Michelle is a great guest because she has been intimately involved in developing strategies for interactive data adoption in the US. Currently, she manages the education, marketing, communications and outreach efforts of XBRL US, Inc., a nonprofit consortium dedicated to the widespread US adoption of Extensible Business Reporting Language (XBRL). Ms. Savage joined XBRL from PR Newswire where she focused on developing services to help companies communicate their key messages and information to shareholders and potential investors. During her tenure at PR Newswire, Michelle oversaw the introduction and sales of new services to corporate and agency investor relations executives. Moreover, within the XBRL-US committee of the American Institute of Certified Public Accounts, or AICPA, Michelle served as the vice chair of the Steering Committee as well as the Chair of the Adoption Working Group. Previously, she held positions as an equity analyst at Shearson Lehman Hutton and a marketing executive at Pepsi Cola. Ms Savage is also on the Board of the New York chapter of the National Investor Relations Institute where she serves as the Executive Vice President of Programs.
MARK STORY: Welcome, Michelle and thanks for being with us today.
MICHELLE SAVAGE: Mark, thanks very much. Glad to be here.
MARK STORY: Let's just get to the point. You have a lot of experience working with interactive data and technology-based initiatives, so dazed upon your work at XBRL US, from your conversations with current voluntary filing program participants, do they feel
MICHELLE SAVAGE: Well, Mark we've been working with a team of external managers as well a special project managers that have been participating in the SEC voluntary filing program. In fact, even at the beginning of our project, we looked at the US GAAP collections of terms when we put this group together so that they could help us implement the taxonomies given to us as input. For educational programs, that we wanted to develop and help understand what their needs were for in terms of software taxonomies. So really, it was all kinds of things that we been working with this group on and they were really kind of the group pioneers of XBRL creation. While I will say that there continue to be challenges with XBRL creation, overall they feel that that the US GAAP is set and finalized. It's important to understand that you you might as well some think of this as simply a list taxonomies that were created and the guidance that is available now is significantly improved and they feel that the market is ready to get started. When these companies initiated their own exploration, they were working with a much smaller group of taxonomies a much smaller collection of terms and there was literally no guidance that they can turn to for help, no notice standard guide that they could turn to to help them understand how to get started in XBRL; what an instance document was, and they really had to rely upon the software providers and service providers that were out there to come help figure that out. But today, we have a preparers guide with a little over a hundred pages and it gives very detailed information about what's XBRL us what is a taxonomy — what's a collection of terms, what it's an instance document and how it's created. It also provides rules of thumb about what they should and shouldn't do when you develop your own financial statements in XBRL. The collection of terms is much more robust and comprehensive which means that they know about the extensions they need to be created and of course the data that is produced is much more comprehensive and comparable which meets the principal objectives.
MARK STORY: Is any of this information available on their website?
MICHELLE SAVAGE: Yes, all of this information is available on our website. You can look at the collection of terms on our site you can access a preparers guide you can download the whole document or pieces of it and you can read case studies, you can look at a description of what other companies have done in the voluntary filing program, but I think it will give people a sense of the resources that are required and what they need to do to get started
MARK STORY: Great. Would you like to get people that address?
MICHELLE SAVAGE: Of course yes XBRL.US, www.XBRL.US is our website and if you go up there you can access all kinds of information, you can sign up for newsletters as well you can get updates on educational programs that we have. We do a series of webinars and were also looking to find new ways to get information out to the marketplace because we know that the rule proposal has been published just recently and a lot of people are looking for information, a lot of people are coming to webcasts for information
MARK STORY: Great, thank you very much. I guess that we have been talking about the filers themselves. What you think will be the biggest hurdle for companies to develop financials using interactive data?
MICHELLE SAVAGE: I think that the biggest issue for most people is really getting educated and learning about the tools and resources that are available for many people as they first are learning about XBRL, they don't understand that it's a new technology it is something that someone an accountant position or investor relations position will have to deal. It's a technology issue but it really is a business issue and right now I think of the biggest hurdle is understanding what tools are out there. So we have a list of things that you can do to get started and getting educated is one of the first things as I mentioned. The preparer's guide is one document which includes the soup to nuts on creating XBRL documents and creating extensions sometimes companies have very specific reporting needs that may not be in that collection of terms it gives and those rules of thumb. The case studies are available you can look at that taxonomy itself find out about education and training programs but really all of those things that are necessary to get you educated and up to speed before you can make a plan; I think that's the biggest challenge.
MARK STORY: That's great. That essentially rolls into the next question. Is there a given set of steps if someone says "I'm ready to start filing using interactive data?"
MICHELLE SAVAGE: I would say probably step number one is just read a preparer's guide There are software tools and service providers and it is something and idea of how to start the process. It can also serve as the underpinnings in building a program and building a plan because that's can step number two — you want to know what needs to be done to read the case study, attending the trainings, reading educational programs, watching webcasts then you can start your own program and that is going to involve estimating the time and the cost to show to know which tool or service provider to use. We recommend looking at multiple tools, multiple service providers for getting information about them; which ones make the most sense for you and then developing the plan also involves determining who is going to be on an internal team but we have found talking to this voluntary filers is that typically that group is either led by special projects or going forward, it can be more of a mainstream part of the accounting side. With companies, it is either led by special projects or its own team that group serves as the lead, but then other areas to would include would be the legal team, the audit committee, and investor relations and there may be others that need to have a role in that to determine the roles and responsibilities of each members of the team advise upper management on the XBRL mandate. Then you can talk about the pros and cons to upper management by getting started now rather than waiting until this is mandated, get their commitment and then think through the process from beginning to end; exactly what needs to be done. And then our recommendation is to start as early as you can because I think that the voluntary filing program has been going on since early 2005 and about 78 companies were able to participate in that and right now we have we have a short window before the first companies have to start doing this on a mandatory basis so this is the opportunity and the SEC is kind of giving us a gift in terms of time to get started.
MARK STORY: Thanks for being with us today, Michelle. This concludes The Securities and Exchange Commission's Office of Interactive Disclosure Podcast #2. Remember that this is the just the second in a series of podcasts about the new world of interactive data. We encourage all questions and comments. If you have one, please send it to our email address: Ask-OID@sec.gov. That's A-S-KO-I-D@sec.gov.
Be sure to check back soon as we will be responding to listener inquiries in coming podcasts. For Michelle Savage, this is Mark Story saying "thanks for listening."