The Securities and Exchange Commission has issued a proposal that would allow filers to submit financial data in Extensible Business Reporting Language, or XBRL.
Under the regulator's proposal, companies would be allowed to include an attachment in XBRL - a five-year-old Internet framework that establishes individual "tags" for elements in structured documents to ease accessibility and aggregation.
Currently, SEC issuers submit both quarterly and annual reports to the regulator in a standard format.
As a result of using XBRL, comparisons of periodic results between companies or industries can be made without poring over separate filings. The language also makes it easier to download any documents.
"XBRL enables companies to tell their entire story to the capital markets in a precise, efficient and highly reusable way - facts, figures, notes, analysis and discussion - liberating them from reliance on third parties to re-key their information for consumption by investors and other stakeholders," explained Mike Willis, a partner at Big Four firm PricewaterhouseCoopers and founding chair of the XBRL International Consortium.
The SEC proposal is open for public comment for a 30-day period following its publication in the Federal Register. The agency will accept comment letters through its Internet site, www.sec.gov.
"We expect some of our clients to take advantage of the opportunity to participate in this voluntary program," said Mike Starr, managing partner at Grant Thornton. "And we will give them the assistance to make this a smooth and effective process. Eventually, we expect broad participation in the SEC voluntary program."
Chicago-based Grant Thornton has been a member firm of the XBRL Consortium for the past four years.
Starr added that a number of companies have already produced quarterly and year-end financial reports in XBRL on a voluntary basis.
Despite slow progress in the U.S., the XBRL movement has gained far greater traction overseas than on the domestic front. To date, some 40 regulators in nine countries have adopted XBRL for reporting purposes.
Examples of regulators that currently have XBRL programs in place include, among others, the U.S. Federal Financial Industry Examinations Council; the Inland Revenue and Financial Services Authority in the United Kingdom; Japan's National Tax Agency and Financial Services Authority; the Bank of Spain; and the Dutch Tax Authority.
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