XBRL & 10Q / 10K Process Improvements

With the SEC requirement for XBRL reporting beginning to affect publicly traded companies, organizations are spending more time analyzing the processes and activities that are involved in creating, reviewing and finalizing external disclosure documents, such as the 10Q and 10K statements, and then publishing them in XBRL format. The process and activities related to producing the external statements are commonly referred to as ‘the last mile of the close’ and can be very difficult and manually intensive for companies for the following reasons:

• The financial data and footnotes can be unique from disclosure to disclosure, and some of the required information may not be captured or easily reported from source systems (e.g. Fair Value Measurement of Investments, Stock-Based Compensation, etc.)
• The disclosures in the external statements contain a large amount of commentary, footnotes and additional information (e.g. further classification of ending balances, expected option life, dividend yields, etc.)

The XBRL requirement for companies has introduced additional activities as financial amounts and eventually commentary need to be tagged to XBRL taxonomy members. With our strong focus in consolidation and reporting, Finit Solutions provides clients with strategic guidance to determine their XBRL strategy and improve the last mile of the close process.

Many of Finit’s clients have approached XBRL compliance as an opportunity to improve the process of developing the 10Q and 10K statements. Finit has helped these clients improve the following activities:

• Building an auditable bridge between HFM / Hyperion Enterprise and the external results by removing any ‘offline’ adjustments made to take HFM or Hyperion Enterprise data to an external format. These clients design HFM or Hyperion Enterprise to store external results for trial balance data.
• Adding review workflow to the process so that different disclosures have proper management sign-off and controls in place.
• Streamlining the collection, approval and reporting of financial data that does not exist inside HFM or Hyperion Enterprise but is required in the external statements.
• Establishing processes and functionality to handle the rounding, footing and cross-footing of financial data.