SEC Announces Completion of U.S. GAAP Taxonomy; Plans to Propose XBRL Rule in Spring
September 25, 2007
At a press conference held Sept. 25, 2007, and as noted in this U.S. Securities and Exchange Commission (SEC) press release, SEC Chairman Christopher Cox announced the completion of the U.S. GAAP taxonomy, a major step in interactive data reporting, commonly known by one such method, eXtensible Business Reporting Language (XBRL).
Additionally, Cox told the press conference he has asked the SEC staff to work together to “finalize a recommendation to the commission we could act on next spring, about how to deliver maximum benefit, including converting all public company disclosure to interactive data format.”
NOTE: Our understanding is this means that the SEC staff has been charged with coming up with a proposal for making XBRL reporting mandatory, potentially including staged implementation.
Ellen Heffes, executive editor of Financial Executive magazine, published by FEI, asked Cox during the Question and Answer session that followed: “Is there a time you have in your mind, in your vision, of when this might be mandated?”
Cox replied: “This is the recommendation that we’ll be seeking from all the divisions and offices I mentioned.” He added, “Our process will commence informally to consider recommendations in proposed form in spring of next year, to complete in fall next year, (and) would lay out a schedule for implementation.”
Bill Sinnett, director of Research for the Financial Executives Research Foundation, the research affiliate of FEI, asked Cox if all the tags for the U.S. GAAP taxonomy had been completed – including for the footnotes and MD&A. Cox replied the tags for footnote reporting as well as the primary financial statements had been completed.
The U.S. GAAP taxonomy for XBRL, going through its final review by audit firms and others over the next few weeks, should be available on the internet by December 5, said Cox. He encouraged “every public company to consider if they should obtain a copy of this U.S. GAAP taxonomy and its supporting documentation, and consider using it alongside what you’ve got now,” as companies prepare their year-end and fourth quarter SEC filings. He added the SEC staff was committed to assisting companies in this implementation.
Among organizations referenced in Cox’ remarks, he noted that Financial Executives International (FEI) has worked with its members to encourage maximizing the benefits of XBRL, adding, “we owe them great thanks for their public mindedness and dedication to investors.”
FEI, whose committees include the Committee on Finance and Information Technology (CFIT), plans an expanded focus on information technology issues this year under President and CEO Michael P. Cangemi and 2007-08 Chair, M. Alexis Dow.
Further details from today’s SEC press conference can be found in this FEI summary.