The Securities and Exchange Commission will offer public companies expedited reviews of their registration statements and annual reports if they volunteer for a test group as part of the SEC’s interactive data initiative.
Under the initiative, companies voluntarily submit financial data to the SEC using Extensible Business Reporting Language, a computer language that makes financial data interactive. XBRL also standardizes data so regulators can make comparisons when analyzing corporate information.
The SEC expects efficiencies in reviewing the filings prepared in XBRL and wants to encourage participation in the test group set to start in February. Corporations have been slow to adopt XBRL to date.
Interactive data holds the promise of transforming the static, text-only documents companies currently file with the SEC into dynamic financial reports that can be quickly and easily accessed and analyzed. Companies submit their filings through the agency’s Electronic Data Gathering, Analysis and Retrieval system.
“The filers will have an opportunity to share with the SEC their individual experiences with preparing, making and analyzing their interactive filings. They will also better understand how interactive data can help streamline their financial reporting process,” said SEC chairman Christopher Cox last week in a statement.
Companies that participate in the new test group will furnish financial data contained in their periodic and investment company reports in XBRL format for at least one year and provide feedback on their experiences, including the costs and benefits associated with reporting in the interactive data format.
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