It has been four years since XBRL became a four letter word to issuers and nearly eight years since the SEC introduced the concept to issuers, yet XBRL hasn’t fulfilled the SEC’s prediction of XBRL increasing the “speed, accuracy and usability of financial disclosure.” Largely, the reason for the failed prediction is that many potential users haven’t yet discovered the “usefulness” of XBRL. Eight years, however, seems like plenty of time for the usefulness of XBRL to catch on. Given that investors and analysts aren’t using the XBRL data, isn’t it time for the SEC to waive the white flag and eliminate the XBRL filing requirement?
XBRL, of course, was the SEC’s way of racing into the 21st Century. With high hopes in 2004, then-SEC Chair William Donaldson initiated a study to see how interactive data could benefit the Commission and investors. In the final rule release, the Commission noted potential benefits such as more financial information being available to investors; less costly and more timely financial information; fewer errors; and increased comparability and interpretation of financial data. While these benefits have been largely unrealized, the expected costs incurred by issuers have been realized. Given the ability to look at the XBRL mandate now with real cost and benefit data, it seems that the Commission should re-evaluate the original mandate.
In the meantime, XBRL may be remembered by us in the same vein as Betamax and the Laserdisc – great technology that just never caught on. Of course, the only difference between failed Continue Reading Time to throw XBRL in the trash bin?