Inline XBRL Proposed Amendments PRA Supporting Statement 8.14.17.FINAL

SUPPORTING STATEMENT
FOR THE PAPERWORK REDUCTION ACT INFORMATION COLLECTION SUBMISSION
FOR INLINE XBRL FILING OF TAGGED DATA
PROPOSED AMENDMENTS

A.

JUSTIFICATION
1.

CIRCUMSTANCES MAKING THE COLLECTION OF INFORMATION
NECESSARY

In Release No. 33-10323,1 the Commission proposed amendments to require the
use of the Inline XBRL format for the currently required exhibit-only submission of
operating company financial statement information using the machine-readable (i.e.,
interactive) eXtensible Business Reporting Language (XBRL) format in Interactive Data
Files. These proposed amendments would require operating companies, on a phased in
basis, to embed part of the Interactive Data File within an HTML document using Inline
XBRL and include the rest in an exhibit to that document. The proposed amendments
would also eliminate the requirement for operating companies to post Interactive Data
Files on their websites and make certain other changes that would not affect operating
companies.2
The Inline XBRL requirements for operating companies would be phased in
through annual increments based on the category of filer status. Large accelerated filers
that prepare their financial statements in accordance with U.S. GAAP would be required
to comply in the first year of the requirements, followed by accelerated filers that prepare
their financial statements in accordance with U.S. GAAP in the second year and all other
operating company filers that are required to submit Interactive Data Files in the third
year. Operating company filers would be permitted to file using Inline XBRL prior to the
compliance date for each category of filers; otherwise, prior to the applicable compliance
date, filers that do not file using Inline XBRL would continue to be required to submit the
entire Interactive Data File as an exhibit, as they do currently.
The proposed amendments contain “collection of information” requirements
within the meaning of the Paperwork Reduction Act of 1995. The title of the collection
of information impacted by the amendments relating to operating companies is
“Interactive Data” (OMB Control No. 3235-0645).

1

Inline XBRL Filing of Tagged Data, Release No. 33-10323 (March 1, 2017) [82 FR 14282 (March 17, 2017)].

2

This supporting statement relates only to the proposed amendments that would affect operating companies.

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2.

PUPOSE AND USE OF THE INFORMATION COLLECTION

The purpose of the Commission’s proposal to require the use of Inline XBRL
format for the submission of operating company financial statement information is to
improve the data’s quality, benefiting investors, other market participants, and other data
users, and to decrease, over time, the cost of preparing the data for submission to the
Commission.
3.

CONSIDERATION GIVEN TO INFORMATION TECHNOLOGY

Responses under the Interactive Data File requirements are submitted to the
Commission electronically on its Electronic Data Gathering, Analysis, and Retrieval
(EDGAR) system and posted on the filer’s website, if any, in XBRL format. The public
may access submissions on EDGAR through the Commission’s Internet website
(http://www.sec.gov).
4.

DUPLICATION OF INFORMATION

Interactive data format operating company financial statement information already
is and will continue to be required to be submitted to the Commission in traditional
format under existing requirements. When the information is in traditional format, it
cannot be used as effectively as when in an interactive data format that a variety of
software applications can recognize and process. Interactive data format facilitates
making financial information easier for investors to analyze and assisting issuers in
automating regulatory filings and business information processing.
5.

REDUCING THE BURDEN ON SMALL ENTITIES

The proposed amendments to require the use of the Inline XBRL format would
affect all operating company filers, including small entities, currently subject to the
requirement to submit Interactive Data Files in exhibit-only format. The Commission
performed an Initial Regulatory Flexibility Act Analysis and estimated that there are
approximately 841 operating companies that are small entities subject to these
requirements.
The proposed amendments include different compliance schedules based on filer
size and use of accounting principles. Small entities that are operating companies would
not be subject to the proposed requirements until year three of the phase-in. This
different compliance timetable would enable these filers to defer the burden of any
additional cost, learn from filers that comply earlier and take advantage of any increases
in the quality or decreases in the price of Inline XBRL preparation services or software
that arise from expertise or competition that develops prior to their phase-in. In addition,
small entities, as all other filers, would continue to have a 30-day grace period to make
their initial Interactive Data File submission. The elimination of the website posting

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requirement for all filers would consolidate and simplify the compliance and reporting
requirements for all filers with respect to their Interactive Data Files.
The Commission did not propose other alternatives regarding small entities
because it believes that long-term uniformity in interactive data submissions facilitates
automated analysis across filers and that the use of Inline XBRL may reduce the time and
effort required to prepare XBRL filings, simplify the review process for filers, improve
the quality of structured data and, by improving data quality, increase the use of XBRL
data by investors, other market participants, and other data users.
6.

CONSEQUENCES OF NOT CONDUCTING COLLECTION

If the specified financial information were not required in interactive data format,
the information would be available through the Commission only in the traditional
format. Providing financial information in an interactive data format facilitates investor
analysis of financial information. In addition, the use of interactive data format assists
issuers in automating regulatory filings and business information processing. If
interactive data format information were required less frequently, less information would
appear in that format and, as a result, the Interactive Data File requirement would be less
likely to facilitate its intended purposes and achieve its expected benefits. Failure to
conduct the collection of information required by the proposed amendments could
frustrate the Commission’s intent to improve the data’s quality, benefiting investors,
other market participants, and other data users, and to decrease, over time, the cost of
preparing the data for submission to the Commission.
7.

SPECIAL CIRCUMSTANCES
None.

8.

CONSULTATIONS WITH PERSONS OUTSIDE THE AGENCY

The Commission issued a release soliciting comment on the new “collection of
information” requirements and associated paperwork burdens.3 Comments on the
Commission’s releases are generally received from filers, investors and other market
participants. In addition, the Commission and staff participate in an ongoing dialogue
with representatives of various market participants through public conferences, meetings
and informal exchanges. The Commission considers all comments received. A copy of
the proposing release is attached.
9.

PAYMENT OR GIFT TO RESPONDENTS
Not applicable.

3

Id.

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10.

CONFIDENTIALITY
Not applicable.

11.

SENSITIVE QUESTIONS

No information of a sensitive nature, including social security numbers, will be
required under this collection of information. The information collection does not collect
personally identifiable information (PII). The agency has determined that a system of
records notice (SORN) and privacy impact assessment (PIA) are not required in
connection with the collection of information.
12/13. ESTIMATES OF HOUR AND COST BURDENS
The paperwork burden estimates associated with the proposed amendments
include the burdens attributable to collecting, preparing, reviewing and retaining records.
The Commission proposed amendments to require the use of the Inline XBRL format for
the currently required exhibit-only submission of operating company financial statement
information in Interactive Data Files. These proposed amendments would affect the
Interactive Data collection of information requirements by requiring operating companies,
on a phased in basis, to embed part of the Interactive Data File within an HTML
document using Inline XBRL and include the rest in an exhibit to that document. The
Commission also proposed amendments to eliminate the operating company financial
statement information Interactive Data File website posting requirement. These
amendments also would affect Interactive Data collection of information requirements.
We estimate that the proposed Inline XBRL requirement for financial statement
information would result in an initial increase in the existing internal burden of XBRL
requirements (56 hours per response) by eight hours to switch to Inline XBRL. This
increase in burden would be borne only for the initial response that uses Inline XBRL.
We further estimate that reductions in review time would result in a decrease of two
hours per response in the existing internal burden, beginning with the initial response and
continuing on an ongoing basis.4 We also estimate that the average filer would incur a
small increase in external cost of $5 per response (from $6,170 to $6,175) on an ongoing
basis, beginning in the first year of compliance for its phase-in category. Based on the
number of filers that we expect to be phased in during each of the first three years under
the requirements,5 the number of filings that we expect those filers to make that would

4

Thus, for the initial response using Inline XBRL, we estimate that filers would experience a net increase in
hour burden of 6 hours (8 hours – 2 hours = 6 hours).

5

Based on staff analysis of Form 10-K filings during calendar year 2015, approximately 26% were filed by
large accelerated filers and approximately 18% by accelerated filers. For purposes of this estimate, we
assume that these percentages are representative of the percentages of filers in different phase-in categories.

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require interactive data6 and the internal burden hour and external cost estimates per
response discussed above, we estimate that, over the first three years of the Inline XBRL
requirements, switching to the Inline XBRL format would decrease the aggregate average
yearly burden of financial statement information XBRL requirements by 20,900 hours of
in-house personnel time7 and increase the aggregate average yearly cost of services of
outside professionals by $109,663.8

6

We estimate that in order to comply with the Interactive Data collection requirements, approximately 8,601
respondents per year would each submit an average of approximately 4.5 responses per year for an
estimated total of 38,705 responses.

7

The first response is estimated to incur a net additional burden of six hours per response and the remaining
responses are estimated to incur a net decrease in burden of two hours per response. The calculation below
considers the aggregate average yearly change in internal burden incurred by each of the three categories of
filers during the first three years of the proposed Inline XBRL requirements. Filers that are phased in
during year two are assumed to incur no change in burden during year one. Filers that are phased in during
year three are assumed to incur no change in burden during years one and two.
Filers phased in during year one: 8,601 x 26%. Average yearly change in internal burden per filer: [6 + (3.5
+ 4.5 + 4.5) x (-2)] / 3 = -6.33 hours. Aggregate average yearly change in internal burden for filers phased
in during year one: 8,601 x 26% x (-6.33 hours) = -14,156 hours.
Filers phased in during year two: 8,601 x 18%. Average yearly change in internal burden per filer: [0 + 6 +
(3.5 + 4.5) x (-2)] / 3 = -3.33 hours. Aggregate average yearly change in internal burden for filers phased
in during year two: 8,601 x 18% x (-3.33 hours) = -5,155 hours.
Filers phased in during year three: 8,601 x 56%. Average yearly change in internal burden per filer: [0 + 0
+ 6 + 3.5 x (-2)] / 3 = -0.33 hours. Aggregate average yearly change in internal burden for filers phased in
during year three: 8,601 x 56% x (-0.33 hours) = -1,589 hours.
Aggregate average yearly change in internal burden: -14,156 – 5,155 – 1,589 = -20,900 hours.

8

Filers are estimated to incur an additional $5 per response beginning with the first year of compliance for
their phase-in category. The calculation below considers the aggregate average yearly change in external
cost incurred by each of the three categories of filers during the first three years after the effectiveness of the
proposed Inline XBRL requirements. Filers that are phased in during year two are assumed to incur no
change in external cost during year one. Filers that are phased in during year three are assumed to incur no
change in external cost during years one and two.
Filers phased in during year one: 8,601 x 26%. Average yearly change in external cost per filer: [$5 x 3 x
4.5] / 3 = $22.5. Aggregate average yearly change in external cost for filers phased in during year one:
8,601 x 26% x $22.5 = $50,316.
Filers phased in during year two: 8,601 x 18%. Average yearly change in external cost per filer: [$0 + $5 x
2 x 4.5] / 3 = $15. Aggregate average yearly change in external cost for filers phased in during year two:
8,601 x 18% x $15 = $23,223.
Filers phased in during year three: 8,601 x 56%. Average yearly change in external cost per filer: [$0 + $0
+ $5 x 4.5] / 3 = $7.5 Aggregate average yearly change in external cost for filers phased in during year
three: 8,601 x 56% x $7.5 = $36,124.
Aggregate average yearly change in external cost: $50,316 + $23,223 + $36,124 = $109,663.

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The elimination of the operating company financial statement information website
posting requirement also is expected to reduce the paperwork burden. We previously
estimated that operating companies would incur an average of approximately four burden
hours per filer per year to post interactive data to their websites. Based on our estimate of
8,601 filers, we estimate that the elimination of the website posting requirement would
decrease the aggregate average yearly burden on operating company filers by 34,404
hours.9
We previously estimated the aggregate average yearly burden of the existing
XBRL requirements for operating companies as 2,167,480 hours of in-house personnel
time10 and $238,809,850 in the cost of services of outside professionals.11 We estimate
that in the first three years under the proposed amendments, the aggregate average yearly
burden of XBRL requirements for operating companies would be 2,112,176 hours of inhouse personnel time12 and $238,919,513 in the cost of services of outside professionals,
which represents a decrease of 55,304 hours of in-house personnel time13 and an increase
of $109,663 in the cost of services of outside professionals14 or a decrease of 6.43 hours
of in-house personnel time per filer15 and an increase of $12.75 in the cost of services of
outside professionals per filer.16
Summary of the Proposed Changes to Annual Compliance in Collection of Information

Interactive Data

Current
Annual
Responses
(A)

Proposed
Annual
Responses
(B)

Current
Burden
Hours
(C)

Increase in
Burden Hours
(D)

Proposed
Burden Hours
(E)
=C+D

Current
Professional
Costs
(F)

Increase in
Professional Costs
(G)

Proposed
Professional
Costs
=F+G

38,705

38,705

2,167,480

(55,304)

2,112,176

$238,809,850

$109,663

$238,919,513

14.

COSTS TO FEDERAL GOVERNMENT

We estimate that the cost of preparing the amendments is approximately
$100,000.

9

8,601 x (-4) = -34,404 hours.

10

8,601 x 4.5 = 38,705 responses. 38,705 responses x 56 hours per response = 2,167,480 hours.

11

8,601 x 4.5 = 38,705 responses. 38,705 responses x $6,170 per response = $238,809,850.

12

2,167,480 – 55,304 = 2,112,176 hours. See note 9 above and note 12 below.

13

-20,900 – 34,404 = -55,304 hours. See notes 7 and 8 above.

14

$238,809,850 + $109,663 = $238,919,513. See notes 7 and 10 above.

15

-55,304 hours / 8,601 filers = -6.43 hours per filer. See note 12 above.

16

$109,663 / 8,601 filers = $12.75 per filer. See note 7 above.

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15.

REASON FOR CHANGE IN BURDEN

As explained in further detail in Items 12 and 13 above, the proposed amendments
in Release No. 33-10323 implement changes to require the use of the Inline XBRL format
for the currently required exhibit-only submission of operating company financial
statement information in Interactive Data Files and eliminate the operating company
financial statement information Interactive Data File website posting requirement.
The resulting changes in burden of Interactive Data are a lower hourly burden and higher
professional cost burden. The lower hourly burden is due to less time being needed to
prepare an Interactive Data File in Inline XBRL format than in exhibit-only format and the
elimination of the website posting requirement. The higher professional cost burden is due
to additional assistance or software needed to prepare an Interactive Data File in Inline
XBRL format as compared to exhibit-only format.
The purpose of the Commission’s proposal to require the use of Inline XBRL
format for the submission of operating company financial statement information is to
improve the data’s quality, benefiting investors, other market participants, and other data
users, and to decrease, over time, the cost of preparing the data for submission to the
Commission.
16.

INFORMATION COLLECTION PLANNED FOR STATISTICAL PURPOSES
Not applicable.

17.

APPROVAL TO OMIT OMB EXPIRATION DATE
The Commission is not seeking approval to omit the expiration date.

18.

EXCEPTIONS TO CERTIFICATION FOR PAPERWORK REDUCTION ACT
SUBMISSIONS
Not applicable.

B.

STATISTICAL METHODS
Not applicable.