In 2009 the priority for the finance and IT departments of the 500 largest publicly held US panies will be to make sure they are ready to file their financials in eXtensible Business Reporting Language, XBRL.

Late last year the Securities and Exchange mission finally set a deadline to use the new XML-based data standard. XBRL promises to put the focus on granular financial data rather than financial document disclosure, thereby bringing greater clarity to disclosures for investors and erning bodies alike.

The SEC is sending a strong message by making XBRL a mandatory filing format, hoping that it will nip another potential Enron or World in the bud since it forces panies to report granularly those financial items that will be of particular interest when assessing risk and losses. XBRL will put more pressure on panies in an already turbulent market, but the benefits of transparency and productivity will make it worthwhile.

The SEC has mandated that some of the largest US public panies must file their financial documents in XBRL format by mid-2009. XBRL is a standards-based way to municate business and financial information using a specialized taxonomy.

The benefit of panies filing their financials in XBRL is essentially for the SEC and investors, making it easier for puter systems to retrieve and analyze granular financial metrics embedded in financial document files. This is possible because XBRL is really a set of XML-based extensions that allow standard financial data to be tagged.

The benefit of the tags is that data can be pinpointed quickly and also analyzed. For example, a financial document uld tag "profit" or "loss", which can be located by a puter application. In the past a human needed to review the financial document to determine profit or loss or to pare financial results across panies.

That level of searchable granularity will make it easier for internal and external analysts and investors to search through and analyze financial statements and other disclosures to determine risk and losses, and even help to unver rporate fraud and reporting errors. Having XBRL as a level playing field also provides a way to pare how much a pany discloses financial data against its peers. Thats a big step away from the previous effort of having to manually sift through documents and forms data to find specific information.

XBRL is clearly more than just a standardized financial reporting mechanism for line items like cash and inventories. It also applies to a wider range of financial data that is key to both management and investor decision-making. That makes XBRL a useful early warning system to highlight financial risks in a firm internally and externally.

The SEC has been talking for a long time about making XBRL the mandatory standard for submitting financial statements. Over 100 panies have already begun tagging their financial reports under a voluntary program. It has finally laid down the gauntlet and the 500 firms in the US will now be under the spotlight to meet the deadline. The initial required disclosures in XBRL will include panies primary financial statements, notes, and financial statement schles.

Meanwhile, smaller panies can breathe a sigh of relief, but not for long; the SEC has indicated that it will phase in XBRL across all publicly held firms within the next two years, probably by 2010, and follow that up with mutual funds a year later.

Like Sarbanes-Oxley, meeting XBRL reporting standards might involve a hefty up-front st in effort and resources. Some might be ncerned that the SEC is taking such action in the midst of market turmoil, but part of the benefit of XBRL is increased productivity. If implemented rrectly, XBRL and its ability to automate internal and external financial reporting will help panies, both public and private, to drive down the unavoidable sts associated with filing.

The SEC mandate should also spur the development of a raft of new and innovative solutions based on XBRL. Having a standard way of municating and exchanging financial information will also improve interoperability among XBRL-based solutions, which is key to widespread