SEC would require XBRL for financial reporting

The Securities and Exchange Commission today proposed that all public companies be required to use interactive data to file financial statements, beginning next year with the largest firms. All other public companies would follow during the next  three years by using data formatted in Extensible Business Reporting Language, or XBRL, SEC Chairman Christopher Cox said. SEC unanimously approved the proposed requirement that would use computer tags to uniquely identify data in a company’s financial statement. This would be done so that the data could be easily searched on the Internet, downloaded into spreadsheets, reorganized in databases and put to other uses by investors, analysts and journalists. “This is all about bringing investors better, faster more meaningful information about the companies they own,” Cox said, He added that the requirement would transform financial disclosure from a 1930s form-based system to a model for the present . Since 2005, companies have voluntarily submitted to SEC financial statements in interactive data format. The rules proposed today would require companies to provide this information on a phased-in schedule. Last year, SEC also began an interactive data-filing program for mutual fund risk information and created an online database that tags executive compensation data for 500 large companies. 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, said Corey Booth, SEC's chief information officer. “And like a decade ago, this move will usher in a quantum leap in helping companies explain their business to investors,” he said. The public will have 60 days after the proposed rule is published in the Federal Register to comment on it.