Publishes Report on Readiness of the Market
XBRL US, the national consortium for XML standards for business and financial information reporting, applauds the actions of the Securities and Exchange Commission (SEC) which voted unanimously yesterday to propose mandating the use of XBRL (Extensible Business Reporting Language) for public company filings to the SEC’s EDGAR database. Under the terms of the current proposal, companies using US GAAP with a worldwide public float over $5 billion will be required to submit their primary financial statements, footnotes and financial statement schedules in XBRL format for fiscal periods ending in late 2008. Accelerated filers will be required to comply with the new rules starting the following year and the remaining public companies would comply the year after that.
XBRL US believes that the US market is ready for more widespread use of XBRL for public company reporting. Working with expert representatives from among its membership, XBRL US has developed an impact statement (http://xbrl.us/documents/rulingimpact.pdf) that outlines the effect that broader use of XBRL for public company reporting will have on key corporate reporting supply chain representatives: public companies, investors and software companies. Key findings from this analysis include:
- Preparers in the short-term will experience incremental cost and effort but longer-term will gain from improved consistency, accuracy and speed of reporting through the integration of XBRL into their financial management systems.
- Investors will see minimal gains initially but further out, will benefit significantly from greater accuracy, granularity and integrity of data.
- Curiosity among investors is high but most will not commit until larger volumes of data are available. But, as with the rollout of EDGAR, once interactive data is available and in use, it will be in high demand from analysts and investors.
- Software tool providers are ready for the stronger demand expected with a rule proposal. Wider use of XBRL is also expected to open up demand for ancillary products for business intelligence and more sophisticated analytics.
“The SEC has been investigating the promise of interactive data for several years,” said David Blaszkowsky, Director, Office of Interactive Disclosure, Securities and Exchange Commission, “With this rule, we believe that the marketplace will soon realize the benefits of greater accuracy and integrity in public company data.”
“As a preparer involved in the XBRL initiative for more than two years, we view the SEC’s announcement yesterday as an important step toward realizing the potential benefits of XBRL,” said Patsy Ramsey, Director of External and Corporate Reporting, The Dow Chemical Company. “Improved consistency, reliability and accuracy in financial reporting are obvious benefits of tagged data and we expect, at some point in the future, that companies will be able to leverage the technology through the integration of XBRL into their financial management systems to enhance analytical capabilities, gain access to data across systems and applications, eliminate manual effort, and strengthen controls. The technology is here; some tools are available and others are being developed; and now the catalyst has been provided to begin exploring the future benefits.”
XBRL US has been in contract with the SEC for the past year to build out the collection of financial and business reporting terms representing US GAAP required disclosures and common reporting practices (taxonomies) that public companies will use to create their own XBRL-formatted financial statements. The elements included in this collection of terms include the primary financial statements and footnotes. XBRL US completed the development of the XBRL US GAAP Taxonomies on April 28, 2008 and delivered the taxonomies and related documentation to the SEC. The taxonomies and Preparers Guide can be viewed at http://xbrl.us/pages/us-gaap.aspx
“The proposed rule is another significant step towards making interactive data standards a reality within and beyond the US,” said Campbell Pryde, XBRL US Chief Standards Officer. “The recently released taxonomies, the proposed SEC rule, and the support infrastructure provided by XBRL US are essential building blocks to make XBRL easy for US public companies to implement.”
Public company financial executives can find out more about how to get started creating XBRL-formatted financials, register for free educational webcast programs and get information on the breadth of tools and services available at www.xbrl.us
About XBRL
XBRL (Extensible Business Reporting Language) is a royalty-free, open specification for software that uses XML data tags to describe business and financial information for public and private companies and other organizations. XBRL benefits all members of the information supply chain by utilizing a standards-based method with which users can prepare, publish in a variety of formats, exchange and analyze financial statements and the information they contain. XBRL International is a non-profit consortium of approximately 550 organizations worldwide working together to build the XBRL language and promote and support its adoption. XBRL International is responsible for the technical XBRL specification and each country-specific jurisdiction works to facilitate the development and adoption of local XBRL taxonomies, or dictionaries, consistent with accounting, regulatory, and market standards and practices.
About XBRL US
XBRL US is the non-profit consortium for XML business reporting standards in the United States and is a jurisdiction of XBRL International. It represents the business information supply chain, including accounting firms, software companies, financial databases, financial printers and government agencies. Its mission is to support the implementation of XML business reporting standards through the development of taxonomies relevant for use by US public and private sectors, working with a goal of interoperability between sectors, and by promoting adoption of these taxonomies through the collaboration of all business reporting supply chain participants. XBRL US has developed taxonomies to support U.S. GAAP and common reporting practices under a contract with the Securities and Exchange Commission. The XBRL US GAAP Taxonomies are available for review at http://xbrl.us/pages/us-gaap.aspx
Source: XBRL US, Inc.
CONTACT:
Michelle Savage, Vice President, Communication, XBRL US, Inc.
(917)747 1714
michelle.savage@xbrl.us
