XBRL US, the national consortium for XBRL business information reporting, announced today that it strongly disagreed with H.R. 4164, proposed legislation which would exempt small companies from filing financial statement data to the U.S. Securities and Exchange Commission (SEC) in XBRL format for five years. Small company is defined as any entity with under $250 million in revenue, which comprises approximately 60% of all public companies. Large companies would retain the XBRL filing requirement and small companies would have the ability to opt in to XBRL filing if they so choose. H.R. 4164 was introduced by Congressman Robert Hurt who sits on the Financial Services Committee.
XBRL US stated their key reasons for opposing this legislation:
- This bill will result in small companies losing equal access to the capital markets because their corporate data will be less accessible and less transparent than large company data. Data aggregators and investors will have no incentive to collect and rekey small company data which will be significantly more expensive to use.
- Small companies have been filing in XBRL format for at least two years now which means they are well up the learning curve; removing the XBRL requirement means a loss of valuable knowledge that they will need to relearn when the exemption is lifted.
- Investors will be harmed because they will lose access to small company data that they have been enjoying for the past several years since the XBRL requirement was put in place.
- The primary reason for this legislation is to reduce the burden on small companies but the cost of XBRL filing ranges from as low as $2000 per year to $25,000 per year, but even these costs are already beginning to decline as many companies transition to financial management programs that incorporate the XBRL process.
- Although the bill allows small issuers to opt-in, it is unlikely that any small companies will comply.
About XBRL US
XBRL US is the non-profit consortium for XBRL business reporting standards in the U.S. and it represents the business information supply chain. Its mission is to support the implementation of XBRL business reporting standards through the development of taxonomies for use by U.S. public and private sectors, with a goal of interoperability between sectors, and by promoting XBRL adoption through marketplace collaboration. XBRL US has developed taxonomies for U.S. GAAP, credit rating and mutual fund reporting under contract with the U.S. Securities and Exchange Commission, and has developed a taxonomy for corporate actions. For more information, go to xbrl.us.
