The SEC proposes that XBRL tags be required for all financial filings, making data searchable.
The Securities and Exchange Commission voted May 14 to formally propose
public companies to file their financial reports using Extensible Business
Reporting Language. XBRL tags uniquely identify individual items in a company's
Formatting financial documents with XBRL allow the data to be easily
searched on the Internet, downloaded into spreadsheets, reorganized in
databases and put to any number of other comparative and analytical uses. An
international nonprofit consortium of approximately 450 major companies,
organizations and government agencies is developing the open-source,
"This is all about bringing investors better, faster, more meaningful
information about the companies they own," SEC Chairman Christopher Cox
said in a statement. "It would transform financial disclosure from a 1930s
form-based system to a truly 21st Century model that taps the power of
technology for the benefit of investors."
If, as expected, the rules are adopted within the few months, approximately
500 of the country's largest companies would be required to submit their SEC
filings in XBRL format by late 2008. Other companies would be phased in over
the next two years. Companies would also be required to post the information on
their Web sites.
The required tagged disclosures would include primary financial statements,
notes and financial statement schedules. Initially, companies would tag notes
and schedules as blocks of text, and a year later, they would provide tags for
the details within the notes and schedules.
Click here to read about the SEC's launch of an interactive Web site allowing users to generate customized data from SEC financial reports.
"Interactive data represents the logical next step in the evolution of
company disclosure, just as HTML and Internet access were the next logical step
a decade ago," SEC CIO Corey Booth
said. "And like a decade ago, this move will usher in a quantum leap in
helping companies explain their business to investors."
The SEC launched an interactive data pilot program in 2005 covering
financial statements of corporate filers. In addition, it began an interactive
data filing program for mutual fund risk return information in 2007. Also in
2007, the SEC created an online database tagging executive compensation data
for 500 large companies.
"Accounting is the business language of the
world, and interactive data will become an easy and reliable technology to
improve that language worldwide, just like many other tools available on the
Internet," SEC Chief Accountant Conrad Hewitt said. "Over the long
term, preparers are expected to benefit through better internal management
information and applications, and investors will benefit with improved
analytical methods to analyze financial information."