The Securities and Exchange Commission announced Tuesday that three more companies have joined the commission’s pilot program to furnish their financial information in XBRL format, bringing the total number of companies in the program to 20.
XBRL — which stands for eXtensible Business Reporting Language — is a computer-tagged format that is intended to make it easier for financial statement users to manipulate, analyze, and compare data from company financial reports. The three new participants in the SEC’s pilot program include General Electric, PepsiCo and Banco Itau Holding Financeira S.A.
SEC Chairman Christopher Cox has been promoting the benefits of XBRL, which he refers to as “interactive data,” in speeches and testimony before Congress, but the SEC has struggled to attract companies to the pilot program. Four months ago, the agency offered a number of incentives to companies that furnish their financial information in XBRL, including expedited reviews of their SEC registration statements and annual reports.
Companies participating in the pilot agree to furnish XBRL-tagged financial data in their periodic reports to the SEC for at least one year, and provide feedback to the SEC on their experience. “The information gained in this way will lead to a better understanding of how interactive data can improve the financial reporting process for investors, financial intermediaries, the SEC, and the companies themselves,” said an SEC statement announcing the new participants.
The SEC says it hopes that popular Internet applications soon will permit automatic, real-time delivery of SEC financial data direct to anyone’s desktop. “Interactive data will vastly improve the delivery of financial information to individuals and institutions alike,” said Cox in a statement. “It has the potential to slash hours of waste, cost, and inefficiency — not just for the users of financial data, but for the companies that prepare it as well. Even more importantly, it will help level the playing field for tens of millions of average investors.”
The SEC also announced that it will conduct the first in a series of interactive data roundtable discussions on June 12. Topics will include what information is most helpful to investors, how to accelerate the use of new software that permits the dissemination of interactive financial data, and how to best design the SEC’s disclosure requirements to take maximum advantage of the potential of interactive data.
In addition, on May 30 representatives of the SEC, including Cox, will participate in a conference at the American Enterprise Institute entitled “The SEC’s Interactive Data Revolution: Improved Disclosure for Investors, Less Expensive Reporting for Companies.”