The Securities and Exchange Commission has released a previously announced set of computer labels corresponding to generally accepted accounting principles that companies can use to make their financial statements more interactive.

The GAAP "taxonomy" is coded in Extensible Business Reporting Language, or XBRL, a language that allows investors to more easily compare financial statements from different companies. The SEC is requesting public comment on the XBRL tags by April 5, 2008.

Over the last two years the SEC has offered a voluntary filing program that allows public companies to voluntarily submit XBRL documents along with periodic SEC reports and investment company filings. More than 40 companies - including IBM, Ford, General Electric, Pepsi, United Technologies and Xerox - are participating in the voluntary filing program, and have begun filing their Form 10-Q and 10-K financial reports in XBRL.

At least nine software companies offer products that are compatible with the new draft taxonomy. One of them is XBRL technology provider UBmatrix, which has been working with XBRL U.S. Inc. to build the U.S. GAAP XBRL taxonomy and wants to usher more public companies into participating in the voluntary filing program. The company has introduced a First Step Program that will provide companies with software, services and training, as well as the updated U.S. GAAP taxonomy.

Sunir Kapoor, chief executive of UBmatrix, believes that SEC Chairman Christopher Cox's announcement of the comment period "really emphasizes that the clock is ticking toward mandatory filing." Kapoor noted that the SEC's own subcommittee on the future of financial reporting recommended that the SEC should consider mandating the use of XBRL for financial statements for the fiscal year ending Dec. 31, 2008, for large accelerated filers. The SEC has not yet set a date for making XBRL mandatory, however.

Built as a plug-in to Microsoft Excel, the UBmatrix software is designed for first-time XBRL filers. "Having a ruling without having any tools or software available would be a bad thing," Kapoor said.

The UBmatrix program includes gap analysis of a company's balance sheet, income statement and cash flow statement against the U.S. GAAP taxonomy, development of taxonomy extensions if needed, and the tagging of financial tables.

"If you really take the vision fast forward, where we really see the world some years from now, every application, every piece of software, will need to support XBRL," Kapoor said. "It really is a paradigm shift."

For more information about the First Step Program, visit www.ubmatrix.com. A free taxonomy review tool is available at http://usgaap.xbrl.us along with information on the nine software companies whose products are compatible with the new draft taxonomy.

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