SEC asks companies to test business reporting language

SEC asks companies to test business reporting language

The Securities and Exchange Commission this spring will begin a pilot to let companies submit their annual reports using Extensible Business Reporting Language.

Richard Heroux , manager of SEC's Electronic Data Gathering, Analysis and Retrieval system, yesterday said the test would begin in March 2005. The agency released a proposed rule earlier this month requesting comments on the change. Companies still would have to file in text or ASCII format but would also attach an XBRL document.

'Right now, we get annual reports in text format, and there is no tagging,' he said. 'With XBRL, we can use a parser to find the data we need and put it into a database. Otherwise, companies have to manually find the data and upload it into the database.'

XBRL is an open standard that lets users extract, exchange, analyze and display financial information. It is a standard description and classification system consisting of specific financial data such as line items, words or labels.

'Proponents of the XBRL reporting standard assert that it offers benefits for all participants in the financial information supply chain, from registrants, who would benefit from improved transparency of their filings, resulting in broader analyst coverage, more market exposure and greater investor confidence, to regulators and investors, who would benefit from ready access to tagged financial data for analytical and review purposes,' the proposed rule said.

Heroux, who spoke in Vienna, Va., at a forum on e-government sponsored by PureEdge Solutions Inc. of Victoria, British Columbia, said the SEC wants to gauge industry interest in using XBRL and whether accounting packages could generate documents using the markup language.

'XBRL is brand new, and there isn't a lot of software behind it,' he said. 'After the test, we will assess whether we will deploy it as a part of the file mechanism later on.'

Comments are due Nov. 1 to rule-comments@sec.gov.

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