Securities regulators will use voluntary filings to test the Extensible Business Reporting Language standard.
Earlier this month, Securities and Exchange Commission officials approved revised rules allowing companies to voluntarily submit supplements to their filings using the Extensible Business Reporting Language (XBRL) standard.
Through this voluntary test, SEC officials hope to determine XBRL's usefulness, including a company's ability to tag their financial information and the benefits of using such tagged data for analysis.
XBRL is an open metadata standard that provides a format for tagging financial information and allows users to extract, exchange, analyze and display financial information.
Officials from companies are generally required to file through the SEC's Electronic Data Gathering, Analysis and Retrieval system, commonly known as EDGAR. Volunteers must furnish XBRL-related documents as an exhibit to a filing.
The XBRL program is still in the testing stages, so filings in that format are not considered official.
"Investors and others should continue to rely only on the official version of a filing and not rely on the XBRL data in making investment decisions," the SEC's final rule reads. "We will include cautionary language to this effect on the commission's Web site."
Proponents of XBRL say companies would benefit from improved transparency of their filings, broader analyst coverage, greater market exposure and improved consumer confidence. Regulators and investors would get easy access to tagged financial data for analysis and review.
Microsoft was the first company to submit its quarterly report for the period ending Dec. 31, 2004, in XBRL in anticipation of the voluntary program.
"We believe investors will have better access to our financial results because XBRL facilitates effective and timely analysis of that information," Scott DiValerio, Microsoft's corporate vice president and corporate controller, said in a prepared statement.
"As a leader in financial reporting and in technology, making our SEC filings available in XBRL is one way of demonstrating our financial reporting transparency and our support and belief that XML-based standards, like XBRL, will play an important role in changing how companies share and leverage financial information," he added.
The effective date of the final rule is March 16.