SEC Approves Rules Requiring Interactive Data for Financial Reporting
12/18/2008On December 18, 2008, the U.S. Securities and Exchange Commission (SEC) voted to require public companies and mutual funds to use interactive data for financial information. With interactive data, all of the facts in a financial statement are labeled with unique computer-readable “tags,” which function like bar codes to make financial information more searchable on the internet and more readable by spreadsheets and other software.
For public companies, interactive data financial reporting will occur on a phased-in schedule beginning in 2009. The largest companies that file using U.S. generally accepted accounting principles (GAAP) with a public float above $5 billion will be required to provide interactive data reports starting with their first quarterly report for fiscal periods ending on or after June 15, 2009. This will cover approximately 500 companies. The remaining companies that file using U.S. GAAP will be required to file with interactive data on a phased-in schedule over the next two years. Companies reporting in International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board will be required to provide their interactive data reports starting with fiscal years ending on or after June 15, 2011. Companies will be able to adopt interactive data earlier than their required start date. All U.S. public companies will have filed interactive data financial information by December 2011 for use by investors.
Mutual funds will be required to begin including data tags in their public filings starting in 2011. A mutual fund also would be required to post the interactive data on its website, if it maintains one.
The full text of the final rules as adopted will be posted to the SEC website within a few weeks.
