Insights from the SEC's XBRL Voluntary Filing Program

Victor Choi, MSA, and Gerry H. Grant, PhD, CPA, and Andrew D. Luzi, PhD

In June 2008, the SEC proposed two rules that would mandate XBRL reporting in the near future. One proposal addresses filing requirements for mutual funds; the other, publicly traded companies. The proposal for publicly traded companies would require large accelerated filers with a market capitalization over $5 billion to submit their financial statements and related schedules in XBRL format for fiscal years ending on or after December 15, 2008. The 2008 filing requirement would impact approximately 500 domestic and foreign companies. The remaining accelerated filers, companies with a market capitalization between $700 million and $5 billion, must comply with the XBRL filing requirements beginning December 15, 2009, with all registrants complying in 2010. The SEC emphasized its push for XBRL by investing $54 million in its aging Internet database in 2006 to start preparing for interactive financial reporting. In a September 25, 2006, press release, SEC Chairman Christopher Cox announced that most of the funds would be used to modernize the SEC's EDGAR database, but $6 million was earmarked to improve XBRL taxonomies and develop XBRL interactive tools.