Data tags for the entire system of US GAAP have been developed by the US Securities and Exchange Commission (SEC). The computer-coded tags, written in eXtensible Business Reporting Language (XBRL), are designed to make it possible for stakeholders to download SEC-filed financial reports into spreadsheets in Excel and other popular software.
The tags, which each correspond to a unique accounting concept, allow other web tools and specialty software to make instant financial comparisons across entire industries. The SEC said the newly completed project is part of its commitment to migrate its vast database of financial information to interactive data format.
For more than two years, the US regulator has conducted a pilot programme whereby it permitted public companies to file their financial reports with the agency in interactive data format. The SEC said that the market capitalisation of companies participating in the voluntary programme has recently topped $2 trillion.
The collection of data tags being used for current filings on the SEC’s financial database system is relatively simplistic, employing approximately 2,500 unique elements, the regulator said. It added that this has required many companies to write their own custom tags, called extensions.
The SEC said the new data tags bring automated financial reporting to the regulator – as well as increased usability of financial statement for investors – closer to reality.
SEC chairman Christopher Cox said the revamp is “a great step toward making SEC reporting easier for registrants and easier to understand for every investor”. “I commend the remarkable efforts of the XBRL US project team for their leadership in the private sector in perfecting this globally accepted technological means for exchanging financial data, and also the Financial Accounting Foundation and the Financial Accounting Standards Board for the expertise in US GAAP that they contributed to this project,” he said.