SEC to Require Machine-Readable Financial Reports for Companies

The Securities and Exchange Commission on Thursday voted to adopt amendments to its reporting standards for operating companies and funds.

Operating companies submitting financial statement information and funds filing risk/return summaries will soon have to use the Inline eXtensible Business Reporting Language format in their disclosure reports, the SEC announced in a statement.

The use of iXBRL involves embedding XBRL metadata in HTML documents, making the resulting file readable for both humans and machines.

A fact sheet accompanying the SEC statement says that the adoption of iXBRL could bring about several benefits including the faster preparation of XBRL reports and the lower likelihood of inconsistency between XBRL and HTML filings.

The rollout of the new standard will happen in phases, beginning with large accelerated filers in 2019.

SEC Chairman Jay Clayton called the amendments “part of the Commission’s continued efforts to modernize reporting and to improve the accessibility and usefulness of disclosures to investors.”

Clayton added that the amendments are reflective of the SEC’s effort “to use developments in structured disclosure technology to lower costs borne by filers and investors.”