SEC To Announce 'Major Breakthrough' in XBRL Sept. 25

Sept. 21, 2007

FEI Summary

Securities and Exchange Commission (SEC) Chairman Christopher Cox stated in a press release issued on Sept. 21, 2007 that: “the SEC will participate in a news conference with XBRL US and others on Tuesday, Sept. 25 in New York to announce a major breakthrough in the introduction of interactive financial reporting.”  XBRL stands for eXtensible Business Reporting Language, and is one method of providing interactive data or ‘tagged data.’ 

Separately, the SEC’s Sept. 21 press release announced that effective September 21, “the source code for the Interactive Financial Report Viewer that enables investors to analyze companies’ interactive data filings is now available via [the SEC’s] Web site for free use by the market.” The SEC’s Interactive Financial Report Viewer can be downloaded here.

The above news follows the SEC’s earlier press release issued September 20, in which the SEC noted an announcement of a ‘major milestone’ in the development in interactive data reporting would be made the following week. SEC’s Sept. 20 press release also noted that:

·         the combined market capitalization of companies submitting interactive data financial reports to the SEC has surpassed $2 trillion, and

·         seven more companies recently joined the SEC’s interactive data Voluntary Filer Program (VFP) (also called the ‘test group’), bringing the total number of companies in the program to more than 40.   

The SEC continues to welcome new participants into the VFP, in which participants are asked to “provide feedback on manpower, costs, and benefits or deficiencies involved with submitting XBRL filings.” The benefits to participants in the VFP, as described in the SEC’s press release, are:  “In return, the SEC staff provides expedited reviews of registration statements or Form 10-Ks from test group participants.”

Among the ‘milestones’ which the SEC may announce Sept. 25, could be one of the following developments referenced by SEC’s Director of the Division of Corporation Finance, John White, in an August 14 speech:

·         the release of “a second prototype” XBRL viewer will be provided on the SEC website “in early fall… featur[ing] enhanced graphics and an easy search function for individual investors.” White added, “Like the first prototype, it will be available at no cost on our website.” (NOTE: This appears to be related to the SEC’s September 21 announcement of release of source code for the interactive viewer.)

·         the release of the “Executive Compensation Disclosure Viewer” on the SEC website, which  “will show how XBRL can make it easier for investors to view and analyze executive compensation information.” White noted the Exec Comp Disclosure Viewer will be accessible via a link on the SEC website. “We are very excited about this new tool, and anticipate that it should be in investors’ hands this year,” he said. NOTE: It is possible the SEC may also release the taxonomies for the Exec Comp tagged data, currently noted as “Coming Soon” at the top of the Edgar Standard Taxonomy chart last updated 8.16.07 on the SEC website. 

·         the release of “expanded and more comprehensive U.S. GAAP taxonomies,” which White described as, “dictionaries of accounting elements and their XBRL tags, which we expect can be used across all industry and business sectors to tag complete sets of financial statements.” White alluded to a public comment period on the taxonomies, when he stated: “We believe these expanded taxonomies will be available for public testing and comment in the fall.” The taxonomies are being developed by XBRL-US, which is affiliated with XBRL-International.

Whether there will be any other news on XBRL announced September 25, stay tuned.  

FEI’s Committee on Finance and Information Technology (CFIT) is closely following these developments, and the Financial Executives Research Foundation (FERF), the research affiliate of FEI, has also issued a number of educational publications on XBRL (shown in FERF's bookstore).

Check back to FEI’s website, www.financialexecutives.org, for updates on the SEC’s announcement and related news.  

Prepared by Edith Orenstein, eorenstein@financialexecutives.org Director, Technical Policy Analysis, Financial Executives International. This summary does not represent FEI opinion unless specifically stated above.