The AICPA supports the use of Extensible Business Reporting Language (XBRL), or data tagging, for reporting of financial and other data. The Institute believes that users of financial and other business information benefit from data tagging because interactive data allows for easier access to more transparent information.
Both the private and public sectors are working toward implementing XBRL for financial information. The Securities and Exchange Commission adopted final rules in February 2009 requiring public companies to submit financial statements filed in XBRL format including annual and quarterly reports, registration statements and transition reports. Using a phased-in approach based upon market capitalization, as of 2011, all SEC filers that use U.S. generally accepting accounting principles (U.S. GAAP) and foreign issuers that use International Financial Reporting Standards (IFRS) are required to submit their reports to the SEC using XBRL. The FDIC also requires bank call reports to be filed using XBRL.
XBRL is gaining support in Congress as evidenced by the number of bills containing XBRL provisions. One such bill has been signed into law and several others have been introduced or are expected to be introduced.
Child and Family Services Improvement and Innovation Act Enacted with XBRL Provision
The “Child and Family Services Improvement and Innovation Act” was enacted on September 30, 2011 after quick consideration and passage in both the House and Senate. Congressmen Geoff Davis, a Kentucky Republican, and Lloyd Doggett, a Texas Democrat, introduced an early version of the legislation in July 2011. That bill was re-introduced as H.R. 2883 in September, and Senators Max Baucus, a Montana Democrat, and Orrin Hatch, a Utah Republican, introduced an identical bill, S. 1542. The primary purpose of the legislation is to extend child and family services programs. Additionally, it calls for data standardization, and specifically requires the Secretary of the Department of Health and Human Services and the Office of Management and Budget to work to establish non-proprietary data standards, such as XBRL, for reporting of information for improved data matching. The bill passed the House of Representatives on September 21, passed the Senate on September 22, and was signed by President Obama on September 30, 2011.
Digital Accountability and Transparency Act
The House overwhelming passed the “Digital Accountability and Transparency Act of 2011” or “DATA Act”, H.R. 2146, in April 2012. Championed by Congressman Darrell Issa, a California Republican, this bill includes a provision to require a newly-created Financial Accountability and Spending Transparency (FAST) Commission to collect information from Federal agencies, as well as from recipients of federal grants, contracts and loans. It further requires the FAST Commission to designate common data elements and data reporting requirements for the information it is provided by recipients and agencies. The legislation specifies XBRL as one possible data reporting language that should be considered to meet the requirement.
The AICPA supported the bill's requirements to use non-proprietary data standards, such as XBRL, for reporting.
Senators Mark Warner, a Virginia Democrat, and Rob Portman, an Ohio Republican, introduced a different version of the DATA Act, S. 3600, in September 2012. Senator Warner had previously introduced S. 1222, which was identical to the original House bill. Unlike the House bill, the new Senate version requires federal agencies to report their spending, but does not require reporting from recipients of federal funds. Additionally, S. 3600 does not specifically mention XBRL, but requires the Secretary of the Treasury to “establish Government-wide financial data standards for Federal funds” and further specifies that those standards “may…include data reporting standards that, to the extent practicable, incorporate a widely-accepted, nonproprietary, searchable, platform-independent computer-readable format” that are “…in effect on the date of enactment of the Digital Accountability and Transparency Act.”
Because the AICPA believes that XBRL is the best possible data standard that is currently available, the Institute is advocating for modifications to the bill to ensure that the legislative language calls for an appropriate non-proprietary data standard, such as XBRL, to be selected when the bill is enacted. The AICPA sent a letter to Senators Warner and Portman thanking them "for their leadership in promoting new technologies that will allow users to better understand and compare reported financial information" and asking that they consider making modifications to the legislation when they reintroduce their bill in the 113th Congress in 2013.
Standard DATA Act
Congressmen Davis and Doggett have also introduced H.R. 3339, the “Standard Data and Technology Advancement Act” or “Standard DATA Act”. This bill would require that the Office of Management and Budget establish an interagency work group to designate nonproprietary data standards, such as XBRL, for any information reported under a number of health and human services programs (amends Social Security Act titles III, IV, IX, XII, XVI, subtitle A of title XX, and section 511). There was no action on this bill in the 112th Congress and it will need to be reintroduced for its proposals to be considered in the 113th Congress.
Additionally, Senator Orrin Hatch, a Utah Republican, and Congressman Dave Camp, a Michigan Republican, each introduced bills entitled the “Jobs, Opportunity, Benefits and Services (JOBS) Act of 2011” (S. 904 and H.R. 1745). Each of these bills include a provision requiring the Department of Labor to work with the Federal Office of Management and Budget and the states to designate data reporting standards to govern the reporting required under Titles III and IX of the Social Security Act. The bills state, “In designating reporting standards under this subsection, the Secretary of Labor shall, to the extent practicable, incorporate existing nonproprietary standards, such as the eXtensible Business Reporting Language.” There was no action on this bill in the 112th Congress and it will need to be reintroduced for its proposals to be considered in the 113th Congress.
Other legislation expected in the future
Congressman Issa has indicated that he intends to reintroduce a version of H.R. 6038, the “Financial Industry Transparency Act” that he had sponsored in the 111th Congress. More information on that bill is below.
Importantly, inclusion of XBRL in each of these legislative proposals indicates that there is growing support for this non-proprietary data tagging language for making financial information more transparent.
111th Congress Legislative Initiatives
In the 111th Congress, there were several proposals calling for XBRL reporting. None of these initiatives had passed both the House and Senate by the time Congress adjourned in December 2010, so new bills would need to be introduced in order to initiate any new Congressional action.
H.R. 2392, the “Government Information Transparency Act,” passed the House in December 2009. It requires the Director of the Office of Management and Budget (OMB) to “adopt a single data standard for: (1) collection, analysis, and dissemination of business and financial information for use by private sector entities in accordance with this Act for information required to be reported to the federal government; and (2) use by agencies for federal financial information.” There was no similar bill in the Senate.
The House-passed version of the financial regulatory reform bill, H.R. 4173, would have required that the U.S. Securities and Exchange Commission (SEC), Public Company Accounting Oversight Board (PCAOB) and Financial Accounting Standards Board (FASB) give oral testimony to the House Financial Services Committee for each of the next five years “on their efforts to reduce the complexity in financial reporting to provide more accurate and clear financial information to investors, including… encouraging the use and acceptance of interactive data.” The Senate did not take up any sort of interactive data reporting requirements during consideration of the financial regulatory reform legislation. Congressman Darrell Issa, a California Republican, introduced a series of amendments dealing with requiring financial data standards to improve transparency of information received by various banking regulators and the SEC during the House-Senate conference in June. Those amendments were agreed to by House conferees, but dropped by the Senate conferees.
In July, Congressman Issa introduced H.R. 6038, the "Financial Industry Transparency Act," which mirrors the language considered during the House-Senate conference. Mr. Issa worked toward passage of this bill in late 2010, but it did not gain Congressional approval. Importantly, the bill had original co-sponsorship support from then-Oversight and Government Reform Committee Chairman Edolphus Towns, a New York Democrat, and then-Financial Services Committee Ranking Member Spencer Bachus, an Alabama Republican. The AICPA wrote a letter in support of H.R. 6038, linked here.
Another bill which passed in different forms in the House and the Senate, was the “Federal Financial Assistance Management Improvement Act of 2009,” (referred to as S. 303 in both chambers) introduced by Senator George Voinovich, an Ohio Democrat. The bill would have required OMB to “to establish and maintain a public website that serves as a central point of information and access for federal grant applicants.” The House version of the bill was even more explicit, and required OMB to “adopt a single data standard for the collection, analysis, and dissemination of business and financial information for use by private sector entities in accordance with subsection 12 (b) for information required to be reported to the Federal Government, and a single data standard for use by agencies within the Federal Government in accordance with subsection (c) for Federal financial information.” It further required that the data standards “shall be a widely accepted, non-proprietary, searchable, computer-readable format for business and financial data.”
Copy of Legislation
Copies of bills are available on the Library of Congress’s THOMAS website. The bills, and all Congressional actions, are available by searching for the legislation by bill number.
AICPA Letters and Issue Papers
December 18, 2012 Letter in Support of the Data Standards Provisions of S. 3600, the Digital Accountability and Transparency Act"
September 20, 2011 AICPA Letter in Support of H.R. 2883, the "Child and Family Services Improvement and Innovation Act"
September 20, 2011 AICPA Letter in Support of S. 1542, the "Child and Family Services Improvement and Innovation Act"
AICPA Issue Paper Supporting H.R. 2146 and S. 1222: the "Digital Accountability and Transparency Act of 2011"
June 20, 2011 AICPA Letter in Support of H.R. 2146, the "Digital Accountability and Transparency Act of 2011"
September 17, 2010 AICPA Letter in Support of H.R. 6038, the "Financial Industry Transparency Act"
April 9, 2009 AICPA Comment Letter to the SEC on the Proposed Roadmap to U.S. Adoption of IFRS
AICPA Press Releases
January 15, 2010, AICPA Webcast to Guide Public Companies on Furnishing XBRL Data to SEC
December 17, 2009, U.S. SEC Releases Final Rule Mandating Companies to Report Financial Statements Using XBRL, Interactive Data Format
October 20, 2008, AICPA Hails New Framework by WICI for Enhanced Business Reporting
Diana Huntress Deem
Director, Congressional and Political Affairs
Other Web Resources
SEC XBRL Website: XBRL.SEC.GOV
SEC Final XBRL Rule, February 3, 2009