SEC looking to industry to help with XBRL

SEC Web site on Tagged Data and XBRL Initiatives

The Securities and Exchange Commission wants the software industry to help it identify ways to receive, store, find and analyze financial data as the commission continues to explore the use of the Extensible Business Reporting Language (XBRL) standard.

According to a request for information released today, the SEC is seeking specific information about XBRL and related software packages, but the commission will consider alternative methodologies to better understand the use of tagged data formats. Submissions are due by Dec. 2.

"Potentially, computer-tagged data could provide real-time operational information for business managers," said SEC Chairman Christopher Cox in a prepared statement. "And its instant availability would dramatically streamline and accelerate the collection and reporting of that same financial information to the commission and the public."

XBRL is an open metadata standard that provides a format for tagging financial information and allows users to extract, share, analyze and display such data.

Earlier this year, the SEC adopted rule amendments allowing companies to voluntarily provide XBRL-formatted documents as an exhibit to a filing to the Electronic Data Gathering, Analysis and Retrieval system. The commission has received 16 filings from nine companies so far.

The SEC is testing XBRL’s usefulness because agency officials believe they can more easily access and analyze specific tagged data, such as net income or gross sales within a financial statement.

"We have been talking with the filers about their experience in submitting XBRL filings," wrote Corey Booth, the SEC's chief information officer, in an e-mail. "Their feedback has been positive, and they think the program is a good idea. They have typically found that, while some effort is involved in tagging their financials in XBRL format, it is manageable."

Although the commission hasn't experienced any significant technical problems, it would like to see more submissions "so that we can pressure test our tools and business processes against a larger volume of filings," Booth wrote.

He said the SEC will evaluate responses from vendors and then decide how to continue to use the technology to support the XBRL program.