Christopher Cox, the Securities and Exchange Commission (SEC) chairman, is expected to release recommendations this week about how US companies can adopt extensible business reporting language (XBRL) for their financial reporting. This follows the SEC Advisory Committee on Improvements to Financial Reporting’s report, released in February, which recommended that companies should use XBRL to tag their financial data.
XBRL is a an electronic communication standard that could increase the usefulness of business and financial information reported to government agencies, as well as reducing costs and increasing efficiency for users.
The February report asked the regulator to go one step further and eventually mandate that all public companies use XBRL and share that information with the SEC without an external auditor’s review. However, the SEC has thus far decided not to mandate its adoption.