WASHINGTON, May 14 (Reuters) - U.S. companies may soon be
required to file their financial results using XBRL computer
tags, a format that should make it easier for investors to
analyze financial data, under a proposal put forth by the U.S.
Securities and Exchange Commission on Wednesday.
About 500 of the largest public companies would begin
filing their financial data in XBRL, or extensible business
reporting language, in early 2009 as part of the SEC's proposed
timetable.
Most of the remaining companies would have to comply within
the following two years, the SEC said.
XBRL electronic tags are like bar codes and can be attached
to each piece of financial data. The SEC currently has a
voluntary pilot program in which more than 70 companies file
their financial data in XBRL.
China, Japan, the Netherlands and some other countries
already require XBRL use or are about to do so.
"Interactive data will let the sunshine in as never
before," SEC Chairman Christopher Cox said at a meeting where
he and the other two Republican commissioners voted for the
proposal. The Senate has yet to approve two Democrats nominated
to the five-member SEC.
Cox also noted the potential for investors and analysts to
use XBRL tagging to compare financial figures for specific
companies over time or across industries. Further, XBRL could
give smaller companies more exposure because industry analysts
will be able to do their jobs more efficiently, he said.
The initial annual cost to companies will likely be in the
thousands of dollars, but that will drop as more software
products become available, he said.
"(The cost) will be almost not noticeable after year one
for most companies," Cox said.
However, before requiring many smaller companies to adopt
XBRL, the SEC is prepared to conduct a cost-benefit analysis
after the second year of mandatory implementation by larger
companies, Cox said.
The agency will accept suggestions from companies, business
groups and others on the proposal until mid-July. After
reviewing public comments, the SEC will finalize its plan.
(Reporting by Karey Wutkowski; editing by Jeffrey Benkoe and
Gerald E. McCormick)
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