US SEC Plans Mandatory XBRL Beginning in 2009

WASHINGTON, May 14 (Reuters) – U.S. companies may soon berequired to file their financial results using XBRL computertags, a format that should make it easier for investors toanalyze 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 beginfiling their financial data in XBRL, or extensible businessreporting language, in early 2009 as part of the SEC’s proposedtimetable.

Most of the remaining companies would have to comply withinthe following two years, the SEC said.

XBRL electronic tags are like bar codes and can be attachedto each piece of financial data. The SEC currently has avoluntary pilot program in which more than 70 companies filetheir financial data in XBRL.

China, Japan, the Netherlands and some other countriesalready require XBRL use or are about to do so.

"Interactive data will let the sunshine in as neverbefore," SEC Chairman Christopher Cox said at a meeting wherehe and the other two Republican commissioners voted for theproposal. The Senate has yet to approve two Democrats nominatedto the five-member SEC.

Cox also noted the potential for investors and analysts touse XBRL tagging to compare financial figures for specificcompanies over time or across industries. Further, XBRL couldgive smaller companies more exposure because industry analystswill be able to do their jobs more efficiently, he said.

The initial annual cost to companies will likely be in thethousands of dollars, but that will drop as more softwareproducts become available, he said.

"(The cost) will be almost not noticeable after year onefor most companies," Cox said.

However, before requiring many smaller companies to adoptXBRL, the SEC is prepared to conduct a cost-benefit analysisafter the second year of mandatory implementation by largercompanies, Cox said.

The agency will accept suggestions from companies, businessgroups and others on the proposal until mid-July. Afterreviewing public comments, the SEC will finalize its plan.

(Reporting by Karey Wutkowski; editing by Jeffrey Benkoe andGerald E. McCormick)