SEC votes in favour of XBRL for interactive reporting

Consequently PwC Ireland urges the Irish Investment Management Industry to prepare for the implementation of a similar rule for Irish funds in order not to fall behind.

The SEC (Securities and Exchange Commission) has voted in favour of the proposed rule which make it mandatory for the top 500 companies in the US to file in XBRL (eXtensible Business Reporting Language) after the middle of 2009.

In addition, it has also adopted a new rule for Mutual Funds where risk and return data made publicly available in the US from 2011 will be in XBRL.

Speaking about what this means in Ireland, Richard Day, Partner, PricewaterhouseCoopers said:

“The new rule is good news as XBRL makes cross-comparison of company information much quicker and easier and this rule will increase the rate at which companies adopt XBRL for publishing their financial statements. When more companies are reporting in XBRL the financial community will benefit through increased tools and ease of use.

The adoption of XBRL for mutual fund data from 2011 will bring advantages for US investors since they will be able to instantly find specific facts disclosed by U.S. mutual funds and compare these funds to each other. There is a threat to the Irish Investment Management Industry in that this may make the US more attractive for hosting such funds.”

The SEC voted to adopt amendments to its rules which will require companies to provide to the Commission supplemental financial information in interactive data format using eXtensible Business Reporting Language, or XBRL. The final rules will apply to domestic and foreign companies using US GAAP and, eventually, to foreign private issuers using International Financial Reporting Standards as issued by the International Accounting Standards Board.

ENDS

Notes to Editor

Interactive data using XBRL will be required with a company’s periodic annual and quarterly reports, transition reports for a change in fiscal year, reports on Forms 8-K and 6-K that contain updated or revised versions of financial statements that appeared in a periodic report, and Securities Act registration statements. The disclosure in interactive data format will supplement, but not replace or change, disclosure using the traditional electronic filing formats or ASCII or HTML. The XBRL-formatted financial statements will be included as an exhibit to the financial statements. Consistent with the SEC’s proposed rule, the final rule will not require any auditor involvement with the new exhibit.

The final rules will require the submission of supplemental financial information in interactive data format using XBRL over a three-year period. The largest filers (issuers with greater than US$5 billion in public float) will be subject to interactive data reporting beginning with the first quarterly report on Form 10-K or annual report on Form 20-F or Form 40-F, as applicable, for fiscal periods ending on or after 15 June 2009.

What is XBRL?
XBRL is a revolutionary technological development in business reporting. It is an electronic “tagging” format, helping consumers of business information to effectively and accurately analyse information coming from different sources. It simplifies the transfer of financial statements, performance reports, accounting records, and other financial information between different software programs. XBRL reduces the time and costs of producing, communicating and accessing business information and is a means for competitive advantage.

XBRL gives companies a reliable, consistent tool for improved business reporting. It will also enable the users of financial reports, such as analysts, regulators, creditors and investors to more quickly and accurately review, analyse and interpret the information.

XBRL is independent of any hardware platform, software operating system, programming language or accounting standard. The standard is being supported by more than 200 organisations worldwide including major accounting firms, software vendors, regulators and corporations.

In Ireland, Business Reporting Ireland Limited is a not for profit company that has been set up to promote and support the adoption of XBRL in Ireland. Richard Day, a PricewaterhouseCoopers Partner is the Chairman of Business Reporting Ireland Limited.

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