New SEC Interpretations re Interactive Data

By Cydney Posner

The SEC has posted some new interpretations about interactive data. (Unfortunately, there aren't any new interps yet about any of the difficult questions that have arisen in connection with proxy access.) The SEC has also withdrawn questions 105.05 and 105.06 under Form 10-Q, which related to the timing of submission of interactive data for the first phase-in group.

Regulation S-K and Regulation S-T 

Item 601 — Exhibits; Rule 405

• A filer first assesses its filing status at the end of each fiscal year (by looking to its public float as of the end of the most recently completed second quarter) and then follows the phase-in provisions for that status in the filings it makes during the immediately following fiscal year.
  • For example, as of December 31, 2009, a calendar-year domestic filer is a large accelerated filer with a public float under $5 billion on the last business day of its second quarter ended June 30, 2009. Under Item 601(b)(101)(i)(B) of Reg S-K and Rule 405(f)(2) of Reg S-T, the filer is required to submit interactive data with its Forms 10-Q for the quarters ended June 30 and September 30, 2010, but need not detail tag the financial statement footnotes and schedules until its Form 10-Q for the quarter ended June 30, 2011, assuming that, as of December 31, 2010, it is a large accelerated filer with a public float under $5 billion on the last business day of its second quarter ended June 30, 2010.
    • If the filer, as of December 31, 2010, is no longer a large accelerated filer, for purposes of its 2011 filings, under Item 601(b)(101)(i)(C) of Reg S-K and Rule 405(f)(3) of Reg S-T, the filer would not be required to submit interactive data with its Form 10-K for the year ended December 31, 2010 or Form 10-Q for the quarter ended March 31, 2011, but it would be required to submit interactive data with its Forms 10-Q for the quarters ended June 30 and September 30, 2011. The filer would not be required to detail tag the financial statement footnotes and schedules until its Form 10-Q for the quarter ended June 30, 2012.
      • Conversely, if the filer, as of December 31, 2010, is a large accelerated filer with a public float over $5 billion on the last business day of its second quarter ended June 30, 2010, under Item 601(b)(101)(i)(A) of Reg S-K and Rule 405(f)(1) of Reg S-T, the filer would be required to submit interactive data with its Form 10-K for the year ended December 31, 2010 and Forms 10-Q for the quarters ended March 31, June 30 and September 30, 2011 and to detail tag the financial statement footnotes and schedules in the interactive data it submits with all of these forms, even though the filer is in its first year of interactive data reporting. A filer that is required to begin detail tagging within its first year of interactive data reporting may apply for a continuing hardship exemption pursuant to Rule 202 of Reg S-T if it cannot detail tag without undue burden or expense. These applications will be considered on a case-by-case basis.

• In detail tagging financial statement footnotes and schedules in its interactive data file, a filer must, among other things, "block-text" tag "[e]ach significant accounting policy within the significant accounting policies footnote" under Rule 405(d)(2) of Reg S-T. The filer must also block-text tag significant accounting policies that are described in footnotes outside of a significant accounting policies footnote, for example, if the significant accounting policies footnote is not the only footnote that describes significant accounting policies or there is no significant accounting policies footnote. 

•  In detail tagging financial statement footnotes and schedules in its interactive data file, a filer must also, among other things, tag separately "[e]ach amount (i.e., monetary value, percentage, and number)" within each footnote and financial statement schedule under Rules 405(d)(4)(i) and 405(e)(2)(i), respectively, of Reg S-T. The staff has agreed that the following types of monetary values, percentages or numbers in footnotes and financial statement schedules do not need to be tagged separately:
  • attributed increased sales to the $1.99 pancake special (the increased sales figure itself would need to be tagged);
    • sales of 1% fat milk (the sales figure itself would need to be tagged);
      • docket number 34-4589;
        • 22nd district court; <br>o FASB Accounting Standards Codification Section 605-40-15;
          • altitude of 27,000 feet;
            • drilling 700 feet;
              • open new stores no less than 2 miles from existing stores;
                • founded a new subsidiary in 2009;
                  • each restaurant now offers at least 20 entrees under 500 calories; and 
                    • number of the footnote itself.

Rule 406T

• If a filer voluntarily submits an interactive data file before it "first was required to submit" the file for purposes of Rule 406T(d) of Reg S-T, the voluntary submission does not start the rule's 24-month modified liability period.