State and local governments could take advantage of the interactive data-tagging technology that the Securities and Exchange Commission plans to require public companies to begin using for their financial filings.
A research study by the Association of Government Accountants examined the feasibility of developing and using Extensible Business Reporting Language, or XBRL, taxonomy to tag data in a state's Comprehensive Annual Financial Report. A pilot project in Oregon was one of the first actual pilot implementations of XBRL in the governmental sector in the U.S.
The AGA's research team built a taxonomy that tagged two statements in the Oregon CAFR: the Statement of Activities and the Statement of Net Assets. The taxonomy was used to reproduce an instance document with tagged data. The taxonomy included 150 Governmental Accounting Standards Board-compliant tagged data elements.
The researchers found that a CAFR taxonomy for all states would have to be at a relatively high level since line items, at least by title, are likely to vary considerably among the states. Researchers also see great opportunity for improved municipal reporting with XBRL.
At a Financial Executives International conference in New York on Tuesday, SEC Chief Accountant Conrad Hewitt described the evolution of the XBRL mandate, which has been pushed by SEC Chairman Christopher Cox. The SEC issued a proposed release in May requiring the 500 largest public companies to begin filing statements in XBRL next year for fiscal periods ending in late 2008. There will be a phase-in schedule over a three-year period depending on the size of company. Hewitt said an "adopting release" of the XBRL requirement may be out by the end of the year.
Edgar Online CEO Philip Moyer, whose company provides XBRL technology to help companies convert their financial statements, said his company has seen a tremendous increase in business since the SEC announced the mandate. "We did about 16 customers before the SEC announced the mandate," he told WebCPA. "The remaining 190-plus have come in since that May time period."
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