Securities and Exchange Commission Chairman Christopher Cox said that data tags had been developed for the entire system of U.S. generally accepted accounting principles, advancing the use of the Extensible Business Reporting Language for automating financial reporting information.
"Today we're announcing a major step that will help every U.S. public company and investor," said Cox at a news conference, commending the efforts of the XBRL US project team, which translated GAAP into the XBRL data tags. He received a tiny memory card that holds the entire GAAP taxonomy from Mark Bolgiano, CEO of XBRL US.
XBRL will allow investors and analysts to download financial information filed with the SEC into Excel spreadsheets and other software, so they can more easily compare the information across companies and industries. Preparers can also automate the process of closing a company's books and submitting financial statements to the SEC, thanks to the technology. The tags will be available for download from the Internet and on thumb drives on December 5.
The SEC plans to convert its entire Edgar database of financial filings into XBRL. Still, Cox noted that the effort is not complete yet. "I'm not here to announce we're putting a man on the moon, but we're launching a Saturn rocket," he said.
AICPA CEO Barry Melancon said in a statement that "the SEC has taken another critical step toward enhanced transparency in financial reporting."
Cox is encouraging every U.S. public company to get a copy of the tags when they are released and consider using them for preparing their filings. Up to now, XBRL reporting has been a voluntary program, but the SEC will be seeking commentary from its offices next spring on when it should become mandatory.
XBRL is also coming into use internationally. Michael Ohata, chairman of the XBRL International Steering Committee, noted that countries such as South Korea, Spain, the United Kingdom, the Netherlands, and Canada were beginning to work with XBRL. Earlier this month the organization received an application from China as well.
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