Federal Register / Vol. 69, No. 190 / Friday, October 1, 2004 / Notices 59111

1Press Release No. 2004–97 (July 22, 2004).

2See http://www.xbrl.org for a more detailed 

description of XBRL. 3 ‘‘Open source’’ means that the software can be 

used by anyone without charge and is being 

developed in an open and collaborative setting. 

‘‘Closed source’’ reporting standards are developed 

for proprietary or private purposes, and the code is 

not publicly available. 4According to http://www.xbrl.org, the AICPA 

hosted the first meeting of the XBRL Steering 

Committee in October 1999. 5 XBRL–US is the jurisdiction of XBRL 

International in the United States. XBRL 

International is made up of companies, 

associations, and agencies involved in providing or 

using business information and XBRL–US is 

composed of a subset of those organizations active 

in the United States. See ‘‘About the Organization’’ 

on http://www.xbrl.org for a discussion of the 

jurisdictions, steering committees and a list of 

members of XBRL International. XBRL International 

and its local jurisdictions have funded the 

development of XBRL through grants and annual 

fees provided by its members. See http://

www.xbrl.org. 6See http://www.ffiec.gov/FIND. The FFIEC 

originally scheduled roll-out of the new XBRLbased data repository for October 1, 2004. While 

roll-out has been delayed, the FFIEC is moving 

forward with the initiative and announced that it 

will target implementation for one of the first two 

Call Report periods of 2005. See FDIC Press Release 

PR–90–2004 (Aug., 2004). 7See XBRL Press Release ‘‘European Businesses 

Take Step Closer to Efficient Reporting’’ (June 24, 

2004).

SECURITIES AND EXCHANGE 

COMMISSION 

[Release Nos. 33–8497; 34–50454; 35–

27895; 39–2429; IC–26623; File No. S7–36–

04] 

Enhancing Commission Filings 

Through the Use of Tagged Data

AGENCY: Securities and Exchange 

Commission.

ACTION: Concept release.

SUMMARY: Data tagging provides a 

method for searching, retrieving, and 

analyzing information through 

automated means. As part of our 

initiative to improve the filing, 

information collection and disclosure 

process, we are seeking to determine the 

impact and usefulness of tagged data 

generally and, more specifically, the 

adequacy and efficacy of Extensible 

Business Reporting Language (XBRL) as 

a format for reporting financial 

information. This concept release seeks 

comment on the use of tagged data in 

certain Securities Exchange Act and 

Investment Company Act filings.

DATES: Comments should be received on 

or before November 15, 2004.

ADDRESSES: Comments may be 

submitted by any of the following 

methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/

rules/concept); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number S7–36–04 on the subject line; 

or 

• Use the Federal eRulemaking Portal 

(http://www.regulations.gov). Follow the 

instructions for submitting comments. 

Paper Comments 

• Send paper comments in triplicate 

to Jonathan G. Katz, Secretary, 

Securities and Exchange Commission, 

450 Fifth Street, NW., Washington, DC 

20549–0609. 

All submissions should refer to File 

Number S7–36–04. This file number 

should be included on the subject line 

if e-mail is used. To help us process and 

review your comments more efficiently, 

please use only one method. The 

Commission will post all comments on 

the Commission’s Internet Web site 

(http://www.sec.gov/rules/concept). 

Comments are also available for public 

inspection and copying in the 

Commission’s Public Reference Room, 

450 Fifth Street, NW., Washington, DC 

20549. All comments received will be 

posted without change; we do not edit 

personal identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly.

FOR FURTHER INFORMATION CONTACT:

Questions about this release should be 

referred to Brigitte Lippmann or Steven 

Hearne, Division of Corporation Finance 

(202–942–2910), Brian Bullard or Toai 

Cheng, Division of Investment 

Management (202–942–0590), or Eric 

Schuppenhauer, Office of the Chief 

Accountant (202–942–4400), Securities 

and Exchange Commission, 450 Fifth 

Street, NW., Washington, DC 20549.

SUPPLEMENTARY INFORMATION:

Table of Contents 

I. Overview 

II. Tagged Data as Part of Our Initiative To 

Improve Analysis and Disclosure 

A. Development of Data Tagging at the 

Commission 

B. Essential Elements of Data Tagging 

C. Impact on Disclosure 

III. XBRL and XBRL Tagged Data 

A. Technology Specification 

B. Taxonomies 

C. Presentation and Analysis of Tagged 

Data 

D. Attestation/Validation of Tagged Data 

IV. Information for and Filing of Tagged Data 

A. Information Appropriate for Data 

Tagging 

B. Filing of Tagged Data 

V. Impact on Various Parties 

A. Investors 

B. Registrants 

C. Accountants 

D. Other Parties 

VI. General Request for Comment

I. Overview 

On July 22, 2004, we issued a Press 

Release announcing that the 

Commission was undertaking an 

initiative to assess the benefits of tagged 

data and its potential for improving the 

timeliness, accuracy, and analysis of 

financial and other filed information.1

Data tagging uses standard definitions to 

translate text-based information, such as 

information contained in Commission 

filings, into files that can be retrieved, 

searched, and analyzed through 

automated means. Data tags may enable 

investors and other market participants 

to more efficiently and effectively 

analyze data from different sources and 

automatically exchange financial 

information across various software 

platforms, including web services.

Data tagging appears to be gaining 

prominence as a format for enhancing 

financial reporting data. Substantial 

progress has been made in the private 

sector over the past five years in 

developing a data tagging language 

known as eXtensible Business Reporting 

Language, or XBRL.2 XBRL is an open 

source specification for software that 

uses tags to identify and describe 

financial and other information and 

facilitate the preparation, publication, 

and analysis of that information.3 In late 

1999, the American Institute of Certified 

Public Accountants, or AICPA, along 

with development partners from the 

accounting, technical, and securities 

sectors, launched the XBRL initiative.4

Today, XBRL International, the 

consortium developed to build the 

XBRL language and promote and 

support its adoption, claims more than 

250 companies and organizations as 

members.5

Financial regulators have begun to 

assess the potential of XBRL to improve 

the timeliness and accuracy of reported 

financial information as well as the 

analysis of such information. The 

Federal Financial Institutions 

Examination Council, or FFIEC, which 

is the U.S. interagency bank regulatory 

standard-setting body, has undertaken a 

Call Report Modernization Initiative and 

developed a set of data standards using 

XBRL for the information that financial 

institutions must include in their Call 

Reports.6 Moreover, in June 2004, the 

European Commission demonstrated its 

interest in the development of XBRL by 

signing a contract with XBRL 

International to accelerate the 

development and adoption of XBRL in 

the European Union.7

Since adopting rules to implement the 

operational phase of our Electronic Data 

59112 Federal Register / Vol. 69, No. 190 / Friday, October 1, 2004 / Notices 

8 15 U.S.C. 78a et seq.

9 15 U.S.C. 80a–1 et seq.

10Release No. 33–8496 (September 27, 2004).

11 Item 303 of Regulation S–K [17 CFR 229.303].

12 Item 22(b)(7) of Form N–1A [17 CFR 239.15A 

and 17 CFR 274.11A].

13 17 CFR 210 et seq. and 17 CFR 229.302.

14Examples of these users include, among others, 

financial analysts, investment advisors, 

institutional investors, mutual funds, and others 

who routinely use software and other technical 

tools to analyze companies, to compare specific 

companies to indices or peer groups, or to screen 

groups of companies for specific characteristics. 

The analyses performed by these users can have a 

significant impact on the capital markets due to the 

amount of funds managed by such users and the 

number of investors who rely on their advice. 

Making tagged data more accessible to users who 

perform technical data analyses will affect all 

investors, large or small, including investors who 

do not directly use the tagged data.

15Release No. 33–6977 (Feb. 23, 1993) [58 FR 

14628].

16See Release No. 33–6977 and the EDGAR Filer 

Manual.

17 Id. The Financial Data Schedule requirement 

initially was to become effective on November 1, 

1993. The effective date was delayed, however, 

until September 1, 1994 to provide additional time 

to establish the EDGAR system’s capacity to accept 

and process the Schedules. Release No. 33–7072 

(July 8, 1994) [59 FR 36258].

18Release No. 33–6977.

19 Id. The rules required electronic filers to 

furnish the Schedules, but did not deem them 

‘‘filed’’ under the federal securities laws. Though 

the Schedules remained subject to the anti-fraud 

provisions of the federal securities laws, electronic 

filers that submitted Schedules were not otherwise 

liable under the federal securities laws to the extent 

their Schedules contained data accurately extracted 

from their financial statements and the underlying 

financial statements were not materially false or 

misleading.

20 Initially, Financial Data Schedules were 

removed from investment company registration 

forms in 1999. Release No. 33–7684 (May 17, 1999) 

[64 FR 27888]. The Schedules were subsequently 

eliminated from all Commission rules and forms, 

including Form N–SAR, in early 2000. Release No. 

33–7855 (Apr. 24, 2000) [65 FR 24788].

Gathering, Analysis and Retrieval 

system, or EDGAR, we have continually 

sought to make EDGAR more useful to 

investors. XBRL provides a 

sophisticated system of data tagging that 

may offer an opportunity to improve the 

transparency and enhance the analysis 

of information filed with us. 

Throughout this release, we solicit 

comment on many issues to help us 

determine whether identifying or 

tagging specific information would 

improve the accuracy of, access to, and 

timely analysis of the information that 

registrants are required to include in 

their filings under the federal securities 

laws. We are seeking comment from 

investors, registrants, accountants, and 

any other parties that may be affected by 

the use of XBRL or other data tagging 

technologies in Commission filings. 

Commenters need not respond to all of 

the questions raised in this release—we 

welcome comment letters addressing 

some or all of these questions. 

In a companion release also being 

issued today, we are proposing a 

voluntary program that would allow 

registrants to furnish financial 

information tagged using XBRL as an 

exhibit to specified Securities Exchange 

Act of 1934 8 and Investment Company 

Act of 1940 9 filings, enabling 

Commission staff to further evaluate the 

use of XBRL tagged data.10 If, based on 

the public comment we receive in 

response to this release and our 

experience with the proposed voluntary 

program, we decide to propose rules 

relating to data tagging outside of the 

voluntary program, we will issue a 

subsequent proposing release that 

describes the specific requirements and 

provides an opportunity for public 

comment.

II. Tagged Data as Part of Our Initiative 

To Improve Analysis and Disclosure 

Investors, large and small, seek out 

and analyze information about 

companies in which they have invested 

or in which they are considering 

investing. In response, many registrants, 

in addition to required filings with us, 

make information available to the public 

through dedicated sections of their Web 

sites, investor conference calls, Web 

casts, press releases, and earnings 

releases. Other parties provide services 

that aggregate and analyze registrant 

information and disseminate that 

information via e-mail, specialized 

software, and the Internet. While 

electronic media have increased the 

accessibility of registrant information, 

that information is generally not 

available in a format that investors and 

other users who wish to perform 

technical data analyses can easily 

download and process using software 

applications or Web services. In order to 

analyze financial information, these 

users of the information generally must 

either copy data from financial 

documents into spreadsheets or rely 

upon data that has been copied or 

otherwise extracted and summarized by 

third-party sources. In addition, if 

material financial information is 

contained in the narrative of a filing, 

such as in Management’s Discussion 

and Analysis,11 Management’s 

Discussion of Fund Performance,12 or in 

the notes to a registrant’s financial 

statements,13 users of the information 

may have to search through filings to 

retrieve the information they need to 

perform technical data analyses.14

These activities may take time, result in 

additional cost, and cause errors 

through the inaccurate compilation of 

data.

We are considering the potential for 

the use of tagged data in registrants’

EDGAR filings to improve the timeliness 

and accuracy of financial information 

included in those filings and to facilitate 

the analysis of such information. As part 

of our evaluation, we are requesting 

comment on the essential elements of 

data tagging, the impact of data tagging 

on disclosure, and its impact on users 

of the financial information included in 

Commission filings, as well as the type 

of information and specific filings that 

may be appropriate for data tagging. We 

are also exploring specific aspects of 

XBRL as a data tagging technology. 

While we are not aware of a more 

developed tagging technology for 

business and financial information than 

XBRL, we are requesting information 

and comments on other tagging 

technologies that may be used. 

A. Development of Data Tagging at the 

Commission 

We have relied upon data tagging to 

identify and extract information from 

our EDGAR system since its inception.15

In 1984, the EDGAR pilot program 

required registrants to include tagged 

data in document headers to assist in 

accurately organizing filings.16 These 

tagged headers used SGML, Standard 

Generalized Markup Language, to 

segregate data about the filing and the 

registrant from the underlying text. 

SGML tagging allowed us to 

automatically perform basic validations, 

store tagged data, and process filings. 

Following our adoption of EDGAR, we 

required electronic filers to furnish 

Financial Data Schedules as exhibits to 

their filings containing financial 

statements.17 The Schedules required 

registrants to provide and tag a specified 

set of financial information essentially 

identical to certain items included in 

registrants’ financial statements.18 We 

permitted registrants to ‘‘furnish’’ rather 

than file the tagged financial data 

included in the Schedules, thereby 

limiting registrants’ liability with regard 

to the tagged data.19

As part of an initiative to modernize 

and improve EDGAR in the late 1990s, 

we decided to eliminate the requirement 

to furnish Financial Data Schedules.20

While registrants were required to 

furnish the Schedules until the end of 

2000, the requirement was eliminated 

due to concerns over the reliability and 

usefulness of the tagged data included 

in the Schedules. The problems with the 

reliability of tagged data appeared to 

result primarily from the fact that data 

tagging was not fully integrated into the 

Federal Register / Vol. 69, No. 190 / Friday, October 1, 2004 / Notices 59113

21Release No. 33–7684. In determining to 

eliminate the Schedules, we also noted that the 

Schedules were adopted primarily for the staff’s use 

and that the staff increasingly relied on outside 

sources for the information provided by the 

Schedules. While acknowledging the concerns of 

some commenters who used the Schedules to 

analyze registrants, we determined to eliminate the 

requirement.

22 Id.

23 Id. HTML provides a superior standard for the 

presentation of information and promotes the 

concept of a single-use document, in which filers 

are able to avoid creating separate documents for 

dissemination to investors, posting on their Web 

sites, and submission to the Commission.

24See http://www.w3.org/XML and http://

www.xml.org.

25Tags are standardized through the development 

of taxonomies, which are essentially data 

dictionaries that describe individual pieces of 

information and mathematical and definitional 

relationships among the pieces, identify text labels, 

and refer to authoritative sources for that 

information. See discussion in Section III.B. of this 

release.

26EDGAR Release 7.0 marked our initial use of 

XML to present header information in XFDL, 

Extensible Forms Description Language, a 

derivative of XML using certain tags dedicated to 

screen presentation and validation, rather than 

SGML format.

27 15 U.S.C. 78p(a).

28See http://www.xbrl.org.

29See the discussion of XBRL in Section III.B. 

where taxonomies and extension taxonomies are 

more fully discussed.

30Section 16(a) beneficial ownership reports lend 

themselves to this type of data tagging since the 

underlying forms are highly structured. See Release 

No. 33–8230 (May 7, 2003) [68 FR 25788] 

(mandating electronic filing and Web site posting of 

Forms 3, 4, and 5).

31 In XBRL, these definitions are known as 

taxonomies.

financial reporting process, creating 

difficulties for some registrants in 

determining which Financial Data 

Schedule tags to use for particular 

financial statement items.21 In contrast, 

if, in the future, we required registrants 

to tag financial information using 

technology such as XBRL, we expect 

that such tagged information would 

become an integral part of the financial 

reporting process. Further, we anticipate 

that if we ever required the tagged data 

to be part of the registrant’s official 

filings, it would become subject to all 

relevant liability provisions of the 

federal securities laws.

The initiative to modernize EDGAR 

was not limited to adjusting the 

Schedule requirement; it also sought to 

make better use of improved technology. 

As part of the initiative, we began to 

accept filings submitted to EDGAR 

using HTML, HyperText Markup 

Language.22 By 1999, HTML had 

become a widely accepted standard for 

tagging data and text to present 

information on the Internet, and we 

began accepting filings using HTML 

with the expectation that HTML would 

eventually replace ASCII, American 

Standard Code for Information 

Interchange, for most filings.23

Since the EDGAR modernization 

initiative in the late 1990s, market 

participants have further developed and 

are continuing to improve data tagging 

technology. Today, data tagging 

primarily relies on XML, eXtensible 

Mark-up Language, and other XMLbased standards. XML is a versatile, 

open source standard developed to 

assist in the automatic processing of 

data and to define and name data and 

text through tags.24 XML tags give data 

an identity and context and organize it 

in a format that can be more easily read 

by software programs and analyzed 

across multiple companies and time 

periods.25 In order to continue and 

expand on the benefits provided by 

tagged data, the EDGAR system changed 

document header tagging from SGML to 

XML in May 2000.26 Since then, we 

have increased our use of XML for 

internal processing as well as for the 

document headers filed on EDGAR and 

Section 16(a) 27 beneficial ownership 

reports.

XML-based standards currently are 

being developed and used for a variety 

of data tagging purposes, such as 

FIXML, Financial Information Exchange 

Markup Language, to tag transactionspecific data, MDDL, Market Data 

Definition Language, to exchange 

market information regarding financial 

instruments, and XBRL to tag business 

and financial reporting information. 

XBRL allows users to prepare, publish 

in a variety of formats, exchange, and 

analyze information such as that 

contained in financial statements 

prepared in accordance with Generally 

Accepted Accounting Principles in the 

United States (‘‘GAAP’’).28 XBRL has 

been developed to allow tagging of all 

of a company’s financial information, 

allowing it to extend from a standard set 

of tags to meet its particular reporting 

needs. The extensions are able to 

connect back to, and collapse into, the 

more general, standard tags provided for 

all registrants, thereby mitigating a 

concern noted with respect to Financial 

Data Schedules, that data would be 

placed under an inappropriate, general 

tag.29

B. Essential Elements of Data Tagging 

In order to be able to tag and use 

tagged data for disclosure and analysis, 

a data tagging system must include: 

• The technology to administer the 

tags—a technology specification that 

provides the system’s core concepts and 

language; 

• Standard definitions to describe the 

tags—a set of tags agreed upon by users 

and preparers of information that give 

data an identity and context by 

providing an unique label to each 

specific data element; and 

• A means of presenting and 

analyzing the tagged data—software 

programs that process the tagged data 

for presentation and analytical 

purposes. 

Data tags can be applied through fixed 

field technology or through actively 

pairing data and tags. Fixed field 

technology requires preparers of 

information to provide data in a 

specialized form or template. Using 

fixed field technology, preparers fill out 

a form and each cell within the form is 

assigned a tag by the filing system. In 

this way neither preparers nor users 

actively participate in tagging the data. 

Our electronic filing system for Section 

16(a) beneficial ownership reports relies 

in part on the use of fixed field 

technology to tag data.30 An alternative 

approach requires preparers of 

information to actively pair data in a 

filing with tags, based on standardized 

definitions that have been agreed upon 

by both preparers and users of 

information.31 This provides preparers 

with the opportunity to apply a greater 

degree of professional judgment 

regarding the items to be tagged. The 

proposed voluntary program would 

allow the submission of financial 

information using XBRL in reliance on 

an active pairing approach.

Questions for Commenters:

• What are the advantages and 

disadvantages of using the active pairing 

approach as compared with the fixed 

field technology approach? Are there 

Commission filings, in addition to 

Section 16(a) beneficial ownership 

reports, that would better rely on fixed 

field technology? If so, which filings or 

forms would best use that technology? 

C. Impact on Disclosure 

Investors frequently analyze 

information reported by registrants 

when making their investment 

decisions. We are considering whether 

and how tagged data would affect 

registrants’ disclosure and the way 

investors use that disclosure. Until now, 

data tagging of financial information has 

generally occurred after a registrant has 

prepared its disclosure, as was the case 

with Financial Data Schedules. When 

third-party financial data providers tag 

data, the tagging is based on the 

registrants’ reports filed with us. Using 

data tagging technology, information 

can be tagged by registrants at the 

source, improving the efficiency of the 

financial reporting process. Provision of 

such tagged data by registrants may 

59114 Federal Register / Vol. 69, No. 190 / Friday, October 1, 2004 / Notices 

32We are not a member of XBRL International 

and have not served in an oversight role over XBRL 

International or its development of XBRL.

33See Financial Services Authority Press Release 

No. FSA/PN/031/2004 (Mar. 31, 2004) and Policy 

Statement No. PSO 4/9 (Mar. 2004).

34See http://www.apra.gov.au.

35See XBRL International, ‘‘XBRL International 

White Paper: Improving XBRL Implementation & 

Interoperability, The Case for XBRL 2.1 Today’’

(Mar. 23, 2004). According to the Web site, XBRL 

specification 2.0 was released by XBRL 

International in December 2001 and subsequently 

refined based on experience with the specification.

36 Id.

37 Id. XBRL International has expressed its 

intention to develop modules to improve the ability 

of XBRL to transition data prepared in prior 

versions of the specification and run more complex 

validation routines.

38See http://www.xbrl.org/Specification/XBRLRECOMMENDATION–2003–12–31+CorrectedErrata-2004–04–29.doc for details relating to the 

specification.

39See http://www.xbrl.org/Specifications.

40For more information see the discussion on 

http://www.xbrl.org under Technical Information 

relating to the US Financial Reporting Taxonomy 

Framework.

increase the quality of that disclosure 

and better facilitate analysis of 

disclosure. The tagged data may enable 

registrants, as well as investors and 

regulators, to more easily examine the 

component parts of financial statement 

line items and view elements of the line 

items that are found in the notes to the 

financial statements. Registrant tagged 

data may also generally improve the 

ability to search for and locate particular 

data items by simply calling up the 

specified tags.

While tagged data has the potential to 

improve transparency and enhance 

analysis, the use of tagged data could 

result in investors’ receiving less 

detailed disclosure. Any use of data 

tagging, no matter how detailed, might 

have the effect of causing registrants and 

users to focus on the tagged data and 

miss information that is not tagged or 

fail to take into account the aggregate or 

cumulative effect of the tagged 

information. Further, if registrants were 

to prepare and file their financial data 

based on a set of standard tags, they 

could limit their disclosure to the 

classifications under the standard tags, 

failing to disclose more detailed 

information that might otherwise have 

been presented. Data tagging using 

technology such as XBRL may mitigate 

this concern because, unlike Financial 

Data Schedules that were limited to a 

set of specified tags, XBRL is capable of 

being extended to provide more detailed 

information than that provided in a set 

of standard tags. 

Questions for Commenters:

• What effect would tagged data have 

on the ability to use and analyze 

registrants’ disclosure? Is the provision 

of tagged data in Commission filings 

preferable to the current system? 

• Would tagged data have an effect on 

the quality of disclosure in Commission 

filings? 

• Can the usefulness of disclosure be 

improved in ways other than the 

application of tagging technologies? For 

instance, are there alternative solutions 

(e.g., software products) that reliably 

facilitate analysis of the text-based 

information contained in filings today? 

III. XBRL and XBRL Tagged data 

XBRL is an XML-based standard for 

use in business and financial reporting 

that was developed and is supported by 

XBRL International.32 We are aware that 

XBRL data tagging initiatives are 

currently underway in a number of 

regulatory contexts, including initiatives 

by the FFIEC in the United States, the 

Financial Services Authority in the 

United Kingdom,33 and the Australian 

Prudential Regulatory Authority.34 Our 

proposed voluntary program to accept 

data tagged using XBRL as an exhibit to 

Commission filings would permit us to 

evaluate the XBRL technology 

specification, the standard taxonomies, 

and the types of extension taxonomies 

used by registrants and assess the 

feasibility of XBRL tagged data in 

Commission filings. While the voluntary 

program would only encompass 

registrants’ financial information, 

taxonomies also could be developed to 

include labels for other non-financial 

information.

Although we are seeking comment on 

the ability of XBRL to add value to 

Commission filings, we are interested 

generally in the ability of data tagging to 

meet our objectives and are interested in 

receiving comments on alternative 

XML-based or other languages that we 

should consider. When commenting on 

other languages, please address the 

same general questions that we have 

outlined below for XBRL. Specifically, 

please address whether standard 

taxonomies have been developed, how 

they are maintained, who is responsible 

for updating the taxonomies, and 

whether extensions or some other 

mechanism can be used to allow 

flexibility in providing detailed 

financial information. 

A. Technology Specification 

XBRL International has developed 

XBRL specification 2.1 using XML and 

other World Wide Web Consortium 

specifications.35 XBRL specification 2.1 

was released in December 2003 and is 

the foundation upon which the 

consortium and third parties are 

currently developing software and 

taxonomies.36 According to XBRL 

International, XBRL specification 2.1 

will remain current until at least 

December 2005.37 XBRL specification 

2.1 is an open standard, available on a 

royalty-free basis allowing software 

providers to use the technology 

specification to develop XBRL-enabled 

products.38 In the event that the 

technology specification changes, XBRL 

International has stated that it would 

propose changes to the specification and 

make those proposed changes available 

for public comment.39

Questions for Commenters:

• Is the XBRL specification 2.1 

sufficiently developed to support the 

tagging of financial information? 

Explain whether the specification 

provides an effective and efficient 

means for tagging data in Commission 

filings.

• Although XBRL specification 2.1 is 

an open standard available on a royaltyfree basis, are there limitations on the 

ability of filers, software providers or 

others to freely use the specification? 

B. Taxonomies 

An XBRL taxonomy is a standard 

description and classification system for 

business reporting and financial data. 

Tags consist of: 

• Specific financial data, such as the 

line items presented in the financial 

statements; and 

• Words or labels, such as headers in 

the notes to the financial statements. 

For example, a taxonomy may include 

a tag for the balance sheet line item 

‘‘inventory’’ as well as tags for 

inventory’s component accounts, ‘‘raw 

materials,’’ ‘‘work in process,’’ and 

‘‘finished goods,’’ which often are 

disclosed in the notes to the financial 

statements. Any item that is tagged can 

be retrieved and analyzed across 

multiple registrants and time periods by 

using software. In addition to being 

readily accessible for financial analysis, 

by using software, tagged information 

can be retrieved and formatted in any 

desired presentation, such as a 

traditional balance sheet and income 

statement or as a chart or graph. 

XBRL–US, the jurisdiction of XBRL 

International in the United States, has 

developed the United States Financial 

Reporting Taxonomy Framework.40 The 

taxonomy framework provides the 

foundation on which others can build 

taxonomies to meet their specific 

reporting and analytic needs. On 

September 20, 2004, using the taxonomy 

framework and XBRL specification 2.1, 

XBRL–US proposed for public comment 

three comprehensive industry-level 

Federal Register / Vol. 69, No. 190 / Friday, October 1, 2004 / Notices 59115

41See http://www.xbrl.org.

42For more information see the discussion on 

http://www.xbrl.org under Technical Information 

relating to the United States Taxonomies and the 

Explanatory Notes to each of the US GAAP 

taxonomies.

43See http://www.xbrl.org/faq.aspx#33.

44See note 42 above.

45According to XBRL–US, standard taxonomies 

are generally developed by national jurisdictions, 

such as XBRL–US, and sent to XBRL International 

for comment. While XBRL International does not 

have a required notice and comment period and is 

not bound to consider comments, we understand its 

practice includes the circulation of a working draft 

of a standard taxonomy to members of XBRL 

International for a 30-day comment period and, 

once revised, the publication of a working draft on 

its Web site for a 60-day public comment period. 

While this practice could change, XBRL 

International has indicated that it will actively 

publicize and solicit public comment on the 

specification 2.1 taxonomies. Public comment is 

solicited on the Web site and comments are made 

available on request, but are not published. More 

information is available at its Web site at http://

www.xbrl.org.

46See the discussion of Technical Information 

relating to the US Financial Reporting Taxonomy 

Framework and the US GAAP Commercial and 

Industrial extension taxonomy at http://

www.xbrl.org.

47 Id.

48See Interpretation No. 5 of Chapter 1, Attest 

Engagements, of Statement on Standards for 

Attestation Engagements (SSAE) No. 10: Attestation 

Standards: Revision and Recodification (AT Section 

101), as amended, available at http://

www.aicpa.org/members/div/auditstd/announce/

XBRL_09_16_03_FINAL.htm. Its interpretation has 

not been adopted by the Public Company 

Accounting Oversight Board as part of their 

auditing standards.

taxonomies for tagging financial 

information:

• Commercial and industrial 

companies; 

• Banking and savings institutions; 

and 

• Insurance companies.41

These standard taxonomies were 

developed by XBRL–US based on input 

from accounting firms, technology 

companies, and other participants in 

XBRL–US that have financial reporting 

knowledge.42 Neither the Public 

Company Accounting Oversight Board, 

the Financial Accounting Standards 

Board, nor the Commission participated 

in the taxonomy development. While 

the content of the standard taxonomies 

is based on GAAP and registrant 

disclosure practices, the taxonomies are 

not intended to be accounting standards 

or to require changes to current 

accounting standards or the content of 

reported information.43 In developing 

the taxonomies, we understand that 

XBRL–US considered the following:

• Disclosure indicated in various 

financial reporting checklists prepared 

by the AICPA and major national 

accounting firms; 

• Disclosure in sample financial 

statements included in accounting and 

auditing industry guides published by 

the AICPA; and 

• Disclosure frequently found in 

financial statements filed by 

registrants.44

XBRL–US also has under 

development additional industryspecific taxonomies, including 

taxonomies for investment companies, 

broker-dealers, and oil and gas 

companies.45

In order for the standard taxonomies 

to provide the market with useful tagged 

data, the standard taxonomies must 

provide an appropriate level of detail for 

financial statement presentation and 

analytic purposes. The taxonomies’ tags, 

definitions, and classifications also 

must conform to established standards 

(i.e., GAAP and Commission rules). For 

example, a taxonomy would contain 

inaccuracies if ‘‘raw materials,’’ ‘‘work 

in process,’’ and ‘‘finished goods’’ were 

not classified as components of 

‘‘inventory’’ or their definitions did not 

conform to GAAP. If additional tags are 

needed to satisfy a registrant’s specific 

data requirements, a registrant using 

XBRL would be able to expand the 

standard taxonomy through what is 

known as an extension taxonomy.46

Extension taxonomies enable any 

registrant or group of registrants to 

refine the standard taxonomy by 

creating additional tags to fit their 

particular circumstances. If a group of 

registrants all require similar additional 

data elements, an extension taxonomy 

could be created for the group or a new 

standard taxonomy could be 

developed.47 Where a data element does 

not have a corresponding tag included 

in the standard or extension taxonomy, 

that item would not be able to be 

retrieved, analyzed or separately 

presented as a line item in the financial 

statements.

Questions for Commenters:

• What should the Commission’s role 

be in taxonomy development? How 

could the taxonomies be assessed to 

determine whether they include the 

disclosures required by GAAP and 

Commission rules? 

• Are the standard taxonomies 

sufficient for registrants to submit data 

tagged using XBRL without extensions? 

If not, should standard taxonomies be 

expanded to make extensions 

unnecessary? If standard taxonomies 

were expanded to make extensions 

unnecessary, would the standard 

taxonomies still be manageable, efficient 

and useful? 

• What would be the advantages or 

disadvantages of permitting registrants 

(either individually or as part of an 

industry group) to develop, use, and 

submit their own extensions? If 

registrants were permitted to use their 

own extensions, would it result in better 

financial reporting with greater detail 

than reliance solely on standard 

taxonomies? Is there any potential that 

investors could be confused or misled 

by registrant-developed extensions? 

C. Presentation and Analysis of Tagged 

Data 

Data tagged using XBRL consists of 

tags paired with values in a computer 

readable document, known as an 

instance document. Software programs 

are able to read an instance document, 

analyze and manipulate the data, and 

display it in a desired format. For 

example, a style sheet can render an 

instance document into a traditional 

balance sheet and income statement or 

into a chart or graph. Other software 

programs are able to use the instance 

document and analyze the data.

Questions for Commenters:

• Would it be preferable for 

registrants to develop and submit their 

own style sheets to render tagged data 

into a specific format or for the 

Commission to provide a standard style 

sheet? Why or why not? 

• What is the appropriate level of 

detail to be provided in rendered 

financial statements? What standards 

should be established to ensure a 

sufficient level of detail in the rendered 

financial statements? 

• Are software analytical tools 

sufficiently developed to analyze the 

data? What are the fundamental features 

of such tools? 

D. Attestation/Validation of Tagged 

Data 

Under a tagged reporting system, it is 

important that filers properly tag items 

included in the standard and extension 

taxonomies. If items are not tagged 

properly, financial information 

generated from the instance document 

could be misleading or inaccurate and 

the ability to perform analysis on the 

tagged data could be impaired. An 

example of forms of accountant 

attestation that can be performed on 

tagged data is in the AICPA’s 

interpretation to Section 101 of the 

Statements on Standards for Attestation 

Engagements titled, ‘‘Attest 

Engagements on Financial Information 

Included in XBRL Instance 

Documents.’’48 Specifically, this 

interpretation sets forth procedures an 

accountant should consider when 

engaged to examine and report on the 

accuracy and completeness of an XBRL 

instance document.

Questions for Commenters:

59116 Federal Register / Vol. 69, No. 190 / Friday, October 1, 2004 / Notices 

49Release No. 33–8496. 50See the discussion under Technical 

Information relating to the United States 

Taxonomies at http://www.xbrl.org.

51See Section IV. E. of the XBRL Voluntary 

Financial Reporting Program on the EDGAR System 

Proposing Release. Release No. 33–8496.

52See Release No. 33–7684 and Release No. 33–

7855.

53 17 CFR 249.310.

54 17 CFR 249.331 and 274.128.

55 17 CFR 249.308a.

56 17 CFR 249.332 and 274.130.

57 17 CFR 249.308.

58 17 CFR 249.330 and 274.101.

59 15 U.S.C. 77a et seq.

• If we require or accept tagged data 

in Commission filings, should 

accountants attest to the accuracy and 

completeness of the tagged data? If so, 

what form should such an attestation 

take? 

IV. Information for and Filing of 

Tagged Data 

In a companion release, we are 

proposing a voluntary program to 

permit certain registrants to furnish 

financial information using XBRL in 

order to evaluate data tagging of 

financial statement information in 

general and the use of XBRL in 

particular.49 In this release, we are 

considering the more general question 

of the usefulness of tagged data formats, 

like XBRL, in electronic filings and 

reports made by registrants under the 

federal securities laws. As part of our 

evaluation, we are considering whether 

tagged data should supplement textbased filings, currently provided in 

either ASCII or HTML formats, or 

replace them. The proposed voluntary 

program is the first step in evaluating 

this technology and determining its 

usefulness to investors. After reviewing 

the comments on this release and the 

proposed voluntary program release, we 

will consider whether to implement the 

voluntary program to permit electronic 

filers to furnish financial statement 

information using XBRL as an exhibit to 

certain Exchange Act and Investment 

Company Act filings on EDGAR.

A. Information Appropriate for Data 

Tagging 

It is our understanding that it is 

possible for all information contained in 

Commission filings to be tagged. We 

wish to determine which information in 

those filings is most appropriate for 

such tagging. Currently, the standard 

taxonomies developed by XBRL–US 

provide tags and related definitions for 

registrants’ financial statements, notes 

to the financial statements, industry 

guides and certain elements of 

management’s discussion and 

analysis.50 In the future, registrants may 

be able to tag not only particular line 

items from their financial statements 

and the notes to the financial statements 

but also relevant data from the body of 

a filed document (e.g., executive 

compensation, fund performance 

information, beneficial ownership, legal 

proceedings, and risk factors).

Questions for Commenters:

• What information contained in 

Commission filings would be 

appropriate for tagging? Only the 

financial statements? The financial 

statements and the notes to the financial 

statements? Should management’s 

discussion and analysis or 

management’s discussion of fund 

performance also be included? Should 

Commission industry guide information 

be included? Should financial schedules 

be included? What about other 

information included in the periodic or 

current reports or other information 

collected by the Commission? Please 

provide an explanation for the 

information that you believe is 

appropriate for tagging. 

• Are there specific industries for 

which data tagging would be easier to 

implement or the tagged data would be 

more useful? 

• Should we consider tagging 

investment company information other 

than financial statements, such as the 

prospectus fee table or the table of sales 

loads and breakpoints? Should we 

consider tagging registrant or depositor 

financial statements for insurance 

company separate accounts issuing 

variable insurance products?

B. Filing of Tagged Data 

If, after reviewing the comments on 

this release and the proposed voluntary 

program, we determine that the use of 

XBRL tagged data in Commission filings 

is in the interest of investors, we will 

need to determine how the tagged data 

should be provided and treated for 

liability purposes. Under the proposed 

voluntary program, we are considering 

whether to permit electronic filers to 

‘‘furnish’’ rather than file the exhibit 

containing their XBRL tagged financial 

information, providing electronic filers 

with limited relief from liability under 

the federal securities laws.51 We have 

proposed this limited relief due to the 

experimental nature of the voluntary 

program and to encourage registrants to 

volunteer to provide XBRL tagged data 

with their filings. We expect that the 

voluntary program will allow us to 

gather and analyze data and make 

conclusions regarding the feasibility and 

desirability of using XBRL tagged data 

in Commission filings. Experience with 

a voluntary program would better 

enable us to evaluate data tagging and 

determine whether to propose 

additional data tagging rules for 

electronic filers.

Any additional data tagging rules 

would be developed in a series of steps 

based upon our experience with the 

voluntary program. We may determine 

to extend the acceptance of voluntary 

filings of tagged information 

indefinitely, in which case we would 

need to determine whether to accept the 

tagged data as an alternate official filing 

similar to the approach used in 

accepting either ASCII or HTML, or to 

accept documents using tagged data as 

an unofficial part of the filing, similar to 

the way we currently accept PDF files.52

We also may determine to require 

registrants to file the tagged information 

as their sole official filing. In any event, 

we would consider the liability that 

should attach under the federal 

securities laws to promote the reliability 

of tagged information provided by 

registrants.

Questions for Commenters:

• If we were to extend the acceptance 

of voluntary filings, would it be 

preferable to accept documents using 

tagged data as an alternate official filing 

similar to our current approach of 

accepting either ASCII or HTML 

formats? Would it be preferable for us to 

accept documents using tagged data as 

an unofficial part of the filing, similar to 

what is currently done with PDF files? 

• Should tagged data be applied to 

only certain types of forms? If so, which 

forms? Should tagged data be applied 

only to periodic reports? If so, should it 

be applied only to annual reports on 

Forms 10–K 53 and N–CSR? 54 Should 

application extend to quarterly filings 

on Forms 10–Q 55 and N–Q? 56 Aside 

from periodic reports, should it be 

applied to information filed or 

furnished on Form 8–K? 57 Should it be 

applied to reports by investment 

companies on Form N–SAR? 58 Should 

tagged reporting for investment 

companies be different than for 

operating companies?

• What are the specific implications 

for the use of tagged data in filings made 

pursuant to the Securities Act of 1933?59

Would using tagged data affect an 

issuer’s ability to access the market or 

the timing of its offerings? If so, how?

V. Impact on Various Parties 

We are requesting comments on how 

various parties may be affected by a 

decision to pursue data tagging in 

Commission filings, including the 

impact on: investors, registrants, 

accountants, and other parties generally 

Federal Register / Vol. 69, No. 190 / Friday, October 1, 2004 / Notices 59117

60See, e.g., Financial Executives Research 

Foundation, Inc., Everything You Wanted to Know 

About XBRL but Were Afraid to Ask: A CFO’s Guide

(2003) and Financial Executives Research 

Foundation, Inc., Corporate Reporting and the 

Internet—Understanding and Using XBRL (2002).

61See also the discussion and questions in 

Section III.D. of this release.

involved in the financial reporting 

process. 

A. Investors 

Registrants provide their financial 

data in EDGAR text filings. As a result, 

anyone wishing to translate that data 

into spreadsheet or database software in 

order to analyze the data must either 

copy the data into a more usable form 

or purchase a subscription from a thirdparty financial data provider that has 

already tagged the data. If the data is 

purchased from a third party, the data 

provided may have been modified from 

the information filed by the registrant in 

order to conform it to the third party’s 

database system. 

Tagged data provides financial 

information in a format that is more 

readily usable for standard quantitative 

financial analysis. Investors and other 

parties who are interested in using 

tagged data to calculate financial ratios, 

compare companies to peers or indices, 

or otherwise use software to perform 

sophisticated technical analyses are 

likely to prefer tagged data provided 

directly by the registrant. Even investors 

that do not use the tagged data may 

receive better access to registrant 

information based on the provision of 

the tagged data to those parties who will 

undertake the detailed technical 

analysis and disseminate their results. 

Questions for Commenters:

• What are the likely impacts of the 

provision of tagged data by registrants 

on financial analysts, institutional 

investors, or individual investors? 

• Would the provision of tagged data 

by registrants result in time and cost 

savings to investors, such as through 

reduced data entry or formatting? 

B. Registrants 

In order to create a data tagging 

system, a registrant likely would incur 

expenses for software creation or 

acquisition, software customization and 

other start-up costs, such as training 

personnel and hiring consultants. While 

technology specifications, such as those 

provided by XBRL, are often in the form 

of an open standard that is available at 

minimal or no cost, registrants may 

need to upgrade their systems to use the 

new software, customize the open 

standard, or add extensions. Registrants 

may, however, benefit from the 

provision of tagged data to investors by 

improving the transparency of the 

information and investors’ access to 

information for analytical purposes. 

This may, in turn, result in broader 

analyst coverage, increased liquidity of 

registrants’ securities, and decreased 

price volatility. 

Further, some registrants already may 

have acquired internal financial 

reporting software with data tagging 

capabilities. According to the Financial 

Executives Research Foundation, those 

registrants may be able to use that 

existing software to improve their 

internal financial reporting and controls 

by enhancing transparency of financial 

information and integrating disparate 

systems.60

Questions for Commenters:

• Are current accounting or reporting 

software programs able to tag data? Are 

the programs able to tag data using 

XBRL? 

• What impact would data tagging 

have on a registrant’s financial reporting 

process? What additional costs would a 

registrant incur to tag their financial 

reporting data? 

• What would be the advantages and 

disadvantages of requiring small 

business issuers to tag data in their 

Commission filings? Should we exempt 

small business issuers from any data 

tagging initiatives? Alternatively, should 

small business issuers be given more 

time than larger issuers to transition to 

the use of tagged data? 

• What would be the advantages and 

disadvantages of requiring foreign 

private issuers to tag data in their 

Commission filings? Are the 

implications different if the foreign 

private issuer reports using home 

country Generally Accepted Accounting 

Principles or International Financial 

Reporting Standards with a 

reconciliation to U.S. GAAP? Should we 

exempt foreign private issuers from any 

data tagging initiatives? Alternatively, 

should foreign private issuers be given 

more time to transition to the use of 

tagged data? 

• What would be the advantages and 

disadvantages of requiring investment 

companies to tag data in their 

Commission filings? Are there types of 

investment companies that should be 

exempt from any data tagging 

initiatives? Alternatively, should certain 

investment companies be given more 

time than other investment companies 

to transition to the use of tagged data? 

C. Accountants 

Data tagging may be integrated with 

internal accounting software packages, 

performed by third parties, or performed 

manually. In order to tag data and audit 

tagged data technology, internal control 

procedures and related audit procedures 

may need to change. Accountants may 

be affected by such changes due to the 

types of incremental assurance that they 

may be required to provide with respect 

to tagged data included in Commission 

filings.61

Question for Commenters:

• What effect, if any, would the use 

of tagged data have on the quality of and 

the time required to conduct audits and 

test internal controls? 

D. Other Parties 

Currently, many registrants use 

intermediaries, such as financial 

publishers and filing agents, to assist 

them in making their EDGAR filings. 

These intermediaries ensure that the 

filing is properly formatted and 

transmitted. Registrants similarly may 

choose to rely on third parties to assist 

them with data tagging. Other 

companies convert EDGAR filings into a 

database format, offering services to 

standardize disclosures, calculate 

financial ratios, filter and sort financial 

data, as well as provide data in a tagged 

format. If we were to require the 

submission of tagged data, the scope 

and value of the services provided by 

financial publishers, filing agents, data 

aggregators, and other parties may be 

affected. 

Question for Commenters:

• What effect, if any, would the 

submission to and availability of tagged 

data on EDGAR have on other parties? 

VI. General Request for Comment 

Any interested person wishing to 

submit written comments on any aspect 

of the concept release, as well as on 

other matters that might have an impact 

on our consideration of the use of tagged 

data in Commission filings, is requested 

to do so.

By the Commission.

Dated: September 27, 2004. 

Margaret H. McFarland, 

Deputy Secretary.

[FR Doc. 04–22035 Filed 9–30–04; 8:45 am] 

BILLING CODE 8010–01–P