The U.S. Securities and Exchange Commission (SEC) has proposed to allow filings that include tagged financial information using extensible business reporting language (XBRL) – in addition to the required HTML or ASCII format filings – to its Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system.
The voluntary program, proposed to begin in early 2005, is intended to help the SEC evaluate the usefulness of data tagging in general and XBRL in particular.
Viewed as an important step in enhancing and modernizing financial reporting, XBRL is an open standard for software based on extensible markup language (XML) that uses data tags to provide greater context specifically to financial data. Instead of treating financial information as a block of text, it provides a computer-readable identifying tag for each individual item of data. For example, “company net profit” has its own unique tag. The data tags enable computers to recognize specific data, select it, analyze it, store it, and exchange it with other computers, eliminating processes of manual re-entry and allowing for the automatic exchange of financial information across various software platforms, including the Internet.
Comments submitted during the public comment period that ended Nov. 1 show broad support for the program by the financial and business communities. To see the proposed rule and comments, visit http://www.sec.gov/rules/proposed.shtml. For more information about XBRL, visit www.xbrl.org.
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