Glossary

Explanation of Benefits (EOB)

What is an Explanation of Benefits (EOB)? 

An EOB, or Explanation of Benefits, is a statement from a health insurance plan detailing the charges received for your services. The EOB statement is generated when your provider submits a claim to the health insurance plan for services you received. The EOB describes the costs the health insurance plan will pay for medical  services, prescription drugs and products you’ve received, the patient’s out-of-pocket costs including amounts falling to deductibles or co-payments, and amounts the plan forgives for using an in-network provider with negotiated rates. The EOB is not a bill, rather it is a statement of charges that were received and processed by the insurer. For support and additional information, explore our solutions for Health Plans Regulated Communications.

eXtensible HyperText Markup Language (xHTML)

What is xHTML or eXtensible HyperText Markup Language?

Over the past few decades, companies have moved toward increasingly stylized annual reports, often available via the web, using HTML (HyperText Markup Language). xHTML (eXtensible HyperText Markup Language) takes HTML and adds a layer of machine-readable metadata. For support and additional information, explore our Annual Meeting & Proxy Solutions.

Form 144

What is SEC Form 144?

SEC Form 144 is a mandatory filing for individuals or entities intending to sell restricted or control securities that exceed 5,000 shares or $50,000 in total sales price within a three-month period. Restricted securities typically arise from private sales, while control securities belong to affiliates such as directors or major shareholders. The purpose of this filing is to notify the SEC and the public about these transactions.

Form 144 must be electronically filed with the SEC via its EDGAR system in XML format. Previously, it was allowed to be filed on paper or by email. Securities must be held for at least six consecutive months before they can be sold, though this holding period may include the initial purchase date for any gifted securities.

If the sales of restricted or control securities exceed 5,000 shares or a total sale price of more than $50,000 within a three-month period, an additional Form 144 must be filed for further sales. Filers are also limited to selling no more than 1% of the total number of outstanding securities during this period.

For support and additional information, explore our SEC reporting solutions.

GAAP (General Accepted Accounting Principles) Taxonomy

What is the GAAP (General Accepted Accounting Principles) Taxonomy?

GAAP is an acronym for Generally Accepted Accounting Principles, the standard accounting recording and reporting procedures used to compile financial statements to meet U.S. industry standards and regulations. The US GAAP taxonomy aims to ensure consistency in financial reporting so that investors can better assess financial statements for investment purposes.

Through complex guidelines, GAAP sets out rules covering the fine details of financial statements, from balance sheet classification to revenue recognition. These guidelines are codified in the GAAP Taxonomy Architecture, which serves as the basis for XBRL.

Some financial accounting inconsistencies remain, however. Although U.S. companies follow GAAP rules, other countries apply London-based International Financial Reporting Standards (IFRS). This gap in standards affects global business practices, from accounting to stock market valuations.

Efforts are currently underway by the SEC to adopt IFRS standards and resolve conflicts and confusion in international financial reporting in cooperation with the International Accounting Standards Board (IASB). For support and additional information, explore our SEC reporting solutions.

Going Public

Going public is the process of selling shares that were formerly held privately and are now available to new investors for the first time, otherwise known as an initial public offering (IPO).

ICFR (Internal Control Over Financial Reporting)

What is Internal Control Over Financial Reporting (ICFR)?

Internal control over financial reporting, or commonly referred to as ICFR, is designed to protect and enhance the accuracy and transparency of financial reporting data by public companies. This is prevalent in the Sarbanes-Oxley (SOX) Act, which requires public companies to follow very specific requirements around ICFR to be in compliance with SOX. For support and additional information, explore our automated SOX compliance solution.

IFRS (The International Financial Reporting Standard)

What is IFRS (International Financial Reporting Standards)?

The IFRS Taxonomy is a list of elements, and their relationships, which reflect the presentation and disclosure requirements of the International Financial Reporting Standards (IFRS). These elements, or tags, are used to mark-up IFRS financial statements so they can be communicated in a standardized, computer-readable format. For investment or insurance companies, or corporations, the requirements are different but the importance is high for each.

IFRS is a set of accounting principles initially outlined to harmonize EU practices. IFRS has become a de facto global accounting standard. Since 2001, the International Accounting Standards Board (IASB) has taken responsibility for codifying and developing IFRS principles to achieve the harmonization necessary to support global financial reporting.

The IASB also develops and maintains the IFRS Taxonomy, which is similar to a dictionary of financial reporting items. By selecting tags from the IFRS Taxonomy which match the related disclosures in the company’s IFRS financial statements, the company is able to prepare computer-readable financial statements in an XBRL (eXtensible Business Reporting Language) format, which is required by various regulators. For support and additional information, explore our corporate compliance solutions.

Initial Public Offering (IPO)

An IPO, or initial public offering, is the term for the first time that a private company sells shares of its stock to the public on a stock exchange. The event means that the company has transitioned from private to public ownership, which is why an IPO is often referred to as “going public.” It’s an opportunity for a company to raise significant capital—to help it fund new growth, for example, or pay off debt. And it allows private investors, like founders, angel investors, and family members, to cash out, often realizing gains on their investment.

An IPO is a big step for a company as it provides the company with access to raising a lot of money. This gives the company a greater ability to grow and expand. The increased transparency and share listing credibility can also be a factor in helping it obtain better terms when seeking borrowed funds as well.

When a company reaches a stage in its growth process where it believes it is mature enough for the rigors of SEC regulations along with the benefits and responsibilities to public shareholders, it will begin to advertise its interest in going public.

For support and additional information, explore our IPO Filing Solutions.

Investment Company Act of 1940

What is The Investment Company Act of 1940?

Considered one of the most important pieces of regulation governing the stock market, the Investment Company Act of 1940 is a law that Congress passed to define and regulate mutual funds and closed-end funds, as well as hedge funds, private equity funds, and holding companies. Enforced by the Investment Management division at the SEC, it is intended to mitigate and eliminate the conditions which adversely affect the national public interest and the interest of investors.

The Investment Company Act of 1940, along with the Investment Advisers Act of 1940, was established in response to the Stock Market Crash of 1929 and the ensuing Great Depression. The Investment Company Act’s purpose was to build investor confidence in investment companies, which were relatively new at that time, by reducing conflicts of interest. It was also intended to protect the public interest by requiring investment companies disclose key information concerning their financial health, structure, investment policies and objectives using Form N-SAR.

Under this Act, investment companies with more than 100 investors are required to register with the SEC. They are also required to have a board of directors, with 75% of board members being independent. Additionally, the Act requires mutual funds to limit the use of leverage and maintain a certain amount of cash that will cover investors who want to sell their shares at any time.

With the advent of the Dodd-Frank Act of 2010, the Investment Company Act of 1940 received various updates including new regulations around mutual and hedge funds. That said, a number of hedge funds are able to exempt themselves from the Investment Company Act based on Sections 3(c)(1) and 3(c)(7).

The SEC does not supervise or make specific judgments on the investments an investment company chooses to make. Certain commodity pools as well as managed future funds do not fall under the Act’s jurisdiction. For support and additional information, explore our investment company compliance solutions.

ISO (International Organization of Standardization)

What is ISO (International Organization for Standardization)?

The ISO, or International Organization for Standardization, is the world’s largest developer and publisher of voluntary international standards.

Since 1946, the ISO has published more than 19,500 international standards for industries ranging from agriculture to technology. These specifications enable investors and consumers to assess their options consistently across businesses, borders and languages. They also provide baseline measures for progress in emerging fields, from software security to renewable energy.

ISO standards establish exacting, world-class trade specifications for quality, safety and efficiency in goods and services. Meeting current ISO standards is a rigorous process with industry-specific documentation requirements, and can prove time-intensive even with the fast-track process. For support and information, explore our corporate compliance solutions.