The SEC has finally delivered its mandate that rporations start filing financial statements using XBRL technology. The final version of its rule mandating eXtensible Business Reporting Language (XBRL) for public mpanies has been posted. The 500 largest public mpanies must start XBRL mpliance this June, followed by other large filers in 2010, and all remaining mpanies in 2011. The new rule requires public mpanies to begin filing their financial statements in an interactive data format, allowing investors to download them more easily into spreadsheets and other software. Acrding to the SEC, the technology is “intended not only to make financial information easier for investors to analyze (across mpanies and industries), but also to assist in automating regulatory filings and business information processing.” The SEC also ntends that interactive data has the potential to increase the speed, auracy and usability of financial disclosure, and eventually rce sts.

XBRL is a language for the electronic mmunication of business and financial data which is transforming global business reporting with the promise of greater efficiency and improved auracy. This technology involves mputer “tags” similar to the bar des used to identify groceries in the supermarket. Acrding to the SEC, the tags uniquely identify individual items in a mpany’s financial statement so they can be easily searched, downloaded, reanized, and put to any number of other mparative and analytical uses.

The technology is being developed by an international non-profit nsortium of approximately 500 major mpanies, anizations and ernment agencies, acrding to XBRL.. Right now, implementations of XBRL are growing rapidly around the world.

Here in the U.S., the effective date of the SEC’s new rule is April 13th. There will be a three-year phase-in of the new requirements, details WebCPA. Acrding to the report, mpanies with a market cap of more than $5 billion as of the end of the send fiscal quarter of their most recently mpleted fiscal year will provide XBRL filings with their financial statements for fiscal periods ending on or after June 15th of this year. Web CPA adds that all other domestic and foreign large aelerated filers using U.S. GAAP will be subject to the same requirements next year for fiscal periods ending on or after June 15, 2010. All remaining filers using U.S. GAAP, including smaller reporting mpanies, and all foreign private issuers that prepare their financial statements in acrdance with IFRS, will need to file XBRL statements the following year for fiscal periods ending on or after June 15, 2011.

panies will provide their financial statements in interactive format both to the SEC and on their rporate Web s. Acrding to the SEC, “Any investor with a mputer and an inter nnection will have the ability to acquire and download interactive financial data that have generally been available only to large institutional users.”

Although the final XBRL rule is new, the SEC first undertook an initiative to assess the benefits of interactive data back in 2004. A year later, then-Chairman Chrisher x began pushing for the adoption of XBRL, and he announced intentions for an eventual mandate more than a year ago.

For mpanies that aren’t yet familiar with interactive data (and that would be many), mpliance is likely to be a somewhat daunting task, acrding to plianceWeek. Filing in XBRL format requires a fundamental shift, reports AcuntingWeb.m. Simply put, the report states that, “panies are no longer creating documents. They’re creating data, which is a very different process that demands mpanies modify longstanding practices.”

There are approximately 15,000 XBRL tags. On average, the financial statement for a mid-to-large cap mpany ntains about 4,000 data elements. plianceWeek quotes Michael Ohata, Managing Director at KPMG and Chairman Emeritus of XBRL International as saying, “This is more than just a file nversion. panies have to manage the quality of their XBRL the same as they do with any other filing.”

Michael Scanlon, Partner in the law firm Gibson Dunn & Crutcher, is also quoted by plianceWeek as saying the toughest (and most time-nsuming) part of XBRL mpliance for first-timers will be finding the rrect tag for each line item and sub-line item on the financial statement. “For mpanies that haven’t gone through this yet, there will be a fair amount of pushing and pulling to make sure the mpany’s definitions match up to the taxonomies,” he says. plianceWeek adds that Scanlon believes that even if a mpany outsources that process, mpanies need knowledgeable professionals on their financial reporting staffs “to make sure they’re mfortable with the definitions being applied.”

Ohata echoes this view. plianceWeek quotes him as saying that mpanies should designate in-house experts in both technology and financial reporting to manage the XBRL preparation process. panies must, he says, put a process in place for XBRL submissions, just as they do for external reporting. “They need to understand how XBRL is put together, and they’ll need to review and sign off not only that they followed procres, but that there are checkpoints around quality and that’s supported by documentation,” he says. In short, regardless of whether an XBRL document is prepared internally or externally, management is responsible for its auracy.

New ncepts like XBRL and enhanced business reporting are making real changes in the way business is being done. These major financial reporting developments are critical issues facing financial, legal, risk, audit and mpliance officers at publicly held mpanies. For example, internal auditors can help implement XBRL and provide objective assurance on the implementation process, but they need to first understand the new interactive reporting format, the mandate requirements, and pros and ns of various implementation approaches.

Right now, rporations must add the infrastructure and strive to meet the filing requirements of the SEC. In fact, XBRL US, the non-profit nsortium for XML business reporting standards in the U.S. and a jurisdiction of XBRL, announced that next month it will help cate preparers on how to create XBRL-formatted financial statements for mandatory submission to the Securities and Exchange mission (SEC). Amid the developments, executive search firm, A.E. Feldman, reports that acunting jobs are opening up for Audit Managers and senior-level professionals with expertise in the preparation and maintenance of financial, acunting and statistical reports.