The adoption of eXtensible Business Reporting Language (XBRL) by the U.S. Securities and Exchange Commission (SEC) has marked the largest and most complex implementation of XBRL around the globe to date. Millions of dollars are being invested in software, tools and in the SEC’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) database to support the thousands of companies that will submit financial information in XBRL format and to enable consumers to more easily access this information for analysis.
Continual updates to the U.S. Generally Accepted Accounting Principles (GAAP) taxonomies to incorporate new accounting concepts and standards will help to improve the use of XBRL-formatted data that investors will come to rely upon. Capable tools will facilitate analysis of the abundance of data that will become available in the market as a result of more public companies submitting their tagged financial statements under the SEC’s phased-in mandate.
Expect to see improvements in the efficiency of the entire market as preparers and consumers benefit from streamlined processes and more accurate and transparent data when XBRL is implemented by all public companies.
The SEC mandate of XBRL-tagged financial information marks an enormous milestone in the widespread adoption of XBRL. However, the potential for process improvements that XBRL can provide is much broader than just external reporting and investments that are already made and can be leveraged for a “broader footprint” for many types of business reporting.
No comments:
Post a Comment