Regulation S-K and XBRL Tagging
Regulation S-K and XBRL Tagging- Today is the continuation in a Lawcast series discussing SEC disclosure requirements and in particular the 341 page Regulation S-K concept release and request for public comment issued by the SEC on April 15, 2016.
I am continuing a review of the various specific topics discussed in the Regulation S-K concept release.
First – Presentation and Delivery of Important Information – The discussion on presentation and delivery of important information includes cross-referencing, incorporation by reference, and the use of hyperlinks both to and within SEC registration statements and reports, and outside of such filings such as to corporate websites. The SEC realizes that the use of cross referencing can shorten the overall length of reports and assist in the delivery and presentation of important information.
The discussion of formatting includes whether the layout and presentation of information should be in accordance with a specific form or whether a company should be given wide latitude in that regard. Currently, Forms 10-K and 10-Q specifically state that they are not blank forms to be filled out but rather a guide in providing useful information.
The S-K Concept Release discusses and seeks comment on the use and usefulness of XBRL tagging in general and across the scaled disclosure categories of companies. As discussed in prior Lawcasts, the SEC Advisory Committee on Small and Emerging Companies suggested that the SEC eliminate XBRL tagging for smaller reporting companies.
The Regulation S-K concept release contains detailed discussion on many specific reporting requirements included in the Rules. Several Items in Regulation S-K address the securities of a company. For example, Item 202 requires a description of the terms and conditions of securities being registered; Item 201 requires disclosure of the number of holders of common securities; Item 701 requires disclosure of sales of unregistered securities and use of proceeds from offerings, and Item 703 requires disclosure of securities re-purchased by a company and its affiliates.
As with other areas, the SEC focuses on whether these disclosures should be modified, increased or eliminated and on the presentation of the information.
In the next Lawcast in this series I will discuss Item 101 and 102 related to the description of a company’s business and properties.