U.S. businesses could be required to file financial reports formatted in XBRL, top Securities and Exchange Commission officials said Nov. 13.
John White, head of the SECs division of corporate finance, and Conrad Hewitt, the SECs chief accountant, told the Financial Executives International Conference in New York that the SEC is in the process of shaping an XBRL (Extensible Business Reporting Language) proposal to make it mandatory in required filings.
Hewitt predicted XBRL regulations are "coming down the pipe very fast."
The SEC currently has a voluntary program for tagging financial documents with XBRL. Microsoft, General Electric and United Technologies are already participating in the program.
A member of the XML family, XBRL is a machine-readable language for business and financial data. Instead of treating financial information as a block of text—as in a standard Internet page or a printed document—it provides an identifying tag for each individual item of data.
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The open-source, royalty-free language is being developed by an international non-profit consortium of approximately 450 major companies, organizations and government agencies.
Since leaving Congress in 2005 to head the agency, SEC Chairman Christopher Cox has pushed both the SEC and companies to adopt XBRL. Last week, Cox traveled to Japan to participate in a conference of global securities regulators. Much of the discussion was on timetables for implementation of interactive data initiatives for financial reporting.
Of the countries attending the conference, China is moving fastest on XBRL, already requiring interactive data filing for the full financial statements of all listed companies in quarterly, half-year and annual reports. Japan has mandated XBRL for all public companies by the end of the second quarter of next year.
Korea has instituted a voluntary XBRL program that began last month. Almost 30 companies are already filing their full financial information using XBRL.
"The global movement to interactive data for financial reporting is truly underway," Cox said in a statement. "Without question, 2008 will be a watershed year for interactive data."
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