SEC to accept XBRL

SEC Proposed Rules: XBRL voluntary financial reporting program on the EDGAR system

Companies filing annual reports with the Securities and Exchange Commission will be able to send information to the market watchdog agency using Extensible Business Reporting Language (XBRL) under a pilot program slated for debut next March.

Starting next spring, companies can choose to attach unofficial, supplementary financial exhibits to their filings with XBRL tags, said Richard Heroux, program manager of the SEC's Electronic Data Gathering, Analysis and Retrieval system. Heroux spoke Oct. 6 at a conference on the future of e-government, hosted by PureEdge Solutions Inc.

XBRL is a metadata open standard created for tagging business and financial data; it is a derivative of Extensive Markup Language. "From a standards perspective on financials, it's the most advanced standard right now," Heroux said.

The SEC pilot program aims to test the agency's ability to parse and render XBRL-tagged data and provide investors and others the chance to do the same, Heroux added.

In anticipation of the pilot program, SEC officials will likely have to supplement their XML parser. "An XML parser can validate XBRL, but it's just really an XML document, not an XBRL document," Heroux said. Agency officials will likely purchase a parser from the private sector "because it's a pretty complicated piece of machinery, and we're all about commercial products," he added.

The renderer might be a different story. "I don't really know where we're going to go with the rendering side yet," Heroux said.

"We're going into this pilot with eyes wide open to see what comes out," he added.

Agency officials are accepting public comment through Nov. 1 on the rule change governing the pilot program. In addition, SEC officials have posted a concept release on XBRL's adequacy and efficacy. Concept comments are due by Nov. 15.