For many biodiesel companies, the Securities and Exchange Commission's adoption of eXtensive Business Reporting Language interactive data reporting mandates have been nothing but a passing consideration of things to come. But what once seemed distant is now reality, with nonaccelerated and smaller reporting company filers subject to the new requirements beginning with quarterly reports covering fiscal periods ending on or after June 15, 2011. 
 
 Under the new rules, a reporting company must "tag" financial statements, footnotes and quantitative disclosures with one of the 17,000 existing XBRL tags (which are expected to continue to grow in number), or a custom tag accepted by the SEC when the element does not exist in the standard XBRL list. Tags generally consist of descriptive labels, definitions and generally accepted accounting priniciples and regulatory references that aim to provide the context necessary for software recognition of interactive, financial data. The tagging process is akin to a barcode system that enables those reviewing financial statements, notes and schedules to more easily analyze and compare the relevant financial information to similar information for different reporting periods, companies and industries. 

 
 The XBRL tagging requirements will be implemented in two tiers; the first requiring filers to tag financial statements as well as the accompanying footnotes and schedules as a single block of text. After a year of tier one tagging, tier two will require a registrant to tag: (i) each footnote as a single block of text; (ii) each significant accounting policy, contained in the significant accounting policies footnote, as a single block of text; (iii) each table within a footnote as a separate block of text; and (iv) each amount (e.g., percent, monetary value, etc.) within each footnote. Filers will be given an additional 30 days to submit interactive data for the first quarterly report filed in each of the two tiers. The 30-day grace period will have no effect, however, on the submission deadline for a periodic report, with the XBRL supplement filed as an amendment to the applicable report. XBRL reports must also be accessible on the registrant's website by the report's filing date or the periodic report deadline, whichever occurs first.
 
 Failure to comply will have harsh consequences which may include loss of eligibility for shortened registration statements on Forms S-3 and S-8, loss of the Rule 144 safe harbors-restricting the resale of company shares or units-and/or potential liability arising from a private action or SEC enforcement action based on the company's noncurrent status with SEC-reporting obligations. These consequences are not permanent, however, and will apply only while the filer is delinquent and noncompliant with XBRL requirements.
 
 XBRL requirements are supplemental to and do not replace existing disclosure requirements, including the delivery of ASCII- or HTML-formatted financial statements. As a result, reporting companies will undoubtedly feel the time and money crunch of compliance. The SEC projects each registrant's average yearly burden under the new requirements to be 226.1 internal hours with $27,300 out-of-pocket expenses and 251 internal hours and $27,800 out-of-pocket expenses for years one and five, respectively. On the heels of a down-turned economy and biodiesel industry, XBRL mandates stand to affect the bottom line of biodiesel producers for the foreseeable future; especially those smaller producers without the deep pockets of industry leaders. In an effort to reduce these adverse effects, it will be critical that reporting companies, big and small, begin and continue to familiarize themselves with the tagging process and XBRL format in general.
 
 
 Karen L. Karr provides legal services in corporate and business transactions, estate planning and real estate. Kristi L. Harshbarger practices in securities, estate planning and corporate transactions. Both are attorneys with BrownWinick, a Des Moines, Iowa-based law firm serving the renewable fuels industry. Reach Karr at (515) 242-2424 or <a href="mailto:karr@brownwinick.com">karr@brownwinick.com</a>. Reach Harshbarger at (515) 284-6627 or <a href="mailto:harshbarger@brownwinick.com">harshbarger@brownwinick.com</a>.

Generation X: eXpensive, eXtensive XBRL Reporting Requirements

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Generation X: eXpensive, eXtensive XBRL Reporting Requirements