NEW YORK (Reuters) - U.S. regulators may soon propose a requirement that companies file financial reports in a machine-readable code, known as Extensible Business Reporting Language or XBRL, a top U.S. regulator said on Tuesday.
Speaking at a Financial Executives International Conference in New York, John White, head of the division of corporate finance at the U.S. Securities and Exchange Commission, said his unit is working on creating a proposal for public comment on how companies should use the computer code.
"The staff has been asked to make a recommendation (on XBRL)," White said. "Translate that to mean a rule proposal on how this would be phased in."
Also speaking at the conference on Tuesday, Conrad Hewitt, the SEC's chief accountant, said the commission plans to expand its staff focusing on XBRL and asked companies to take a closer look at using the technology.
"Stay tuned on XBRL; it's coming down the pipe very fast," Hewitt told the audience of chief financial officers, corporate treasurers and comptrollers.
The SEC, which last month established an Office of Interactive Disclosure, has plans to increase the staff of that office from four people to 12, to help companies with XBRL, Hewitt said.
SEC Chairman Christopher Cox has been encouraging companies to report financial data using XBRL tags that would allow investors to more easily analyze the information in spreadsheet programs.
But many companies have hesitated amid concerns about XBRL's maturity and implementation costs.
Cox said in September that the U.S. XBRL group has completed all its work on developing data tags, or taxonomies, for U.S. Generally Accepted Accounting Principles, removing a major obstacle for companies hoping to use XBRL.
White, who at a separate conference in New York last week said he expected XBRL would eventually be "mandatory," said on Tuesday that he expected the SEC staff would recommend a final rule on XBRL next fall.
"At this point in time I would envision the final recommendation would phase it in," White said. "Before the staff would recommend a final rule in the fall, we would have to see successful, real use of the taxonomies in quarterly filings."
The taxonomies are expected to be made available for public comment and testing in December.
Robert Pozen, chairman of a 17-member committee created by the SEC to make financial reporting less complex, said at the conference on Monday that, while the group aims to come out with its final recommendations in August 2008, it hopes to make a recommendation on XBRL in January.
The group is weighing making suggestions on whether XBRL use should be mandatory or optional, on how the cost of adopting balances with its perceived benefits, and how auditors should be involved in the data-tagging process, Pozen said.
"We were told by (the division of corporate finance) at the SEC that that train is leaving the station -- they are moving very quickly on XBRL," Pozen said.
No comments:
Post a Comment