Yesterday, Rep. Robert Hurt’s Small Company Disclosure Simplification Act (H.R. 1965), was discussed by the House Financial Services Committee at a subcommittee hearing. This is the fourth time Rep. Robert Hurt’s (R-VA) proposal has been brought up – both as standalone legislation and bundled into larger Financial Services packages. It’s failed thrice.
The proposal, which is supported largely by the biotech industry, would exempt over 60% of U.S. public companies from the obligation to file their financial statements with the SEC in XBRL. This proposal will effectively render the entire XBRL requirement moot: a capital markets database must be full market to have value to stakeholders.
Citing a $50,000 price tag, Rep Hurt’s main driver seems to be simply “XBRL is too expensive for emerging growth companies.” He’s correct, it was too expensive… back in 2012 when the highly referenced Columbia Business School white paper, An Evaluation of the Current State and Future of XBRL and Interactive Data for Investors and Analysts, was published.
Plus, per the white paper:
A “White Paper” project is in-depth and comprehensive, aimed towards those familiar with the topic at hand – standard-setters, regulators, CFOs and professional accountants. Because of the nature of these projects, they are time-intensive, and can take up to a year to complete.
So, that may give us a 2011 perspective as Rep Hurt’s baseline.
It’s now 2015, and as Vintage clients appreciate, XBRL costs have become realistic and more importantly – scalable to the fiscal sophistication of the issuing company. That is exactly why we introduced fleXBRL. In 2011 -12, many XBRL solutions were one-size-fits-all, which caused the “aggressive” fees for micro- and small-caps. That is no longer the state of XBRL filing and fees. The House Financial Services Committee must reference current 2015 fee structures.
Collectively, the XBRL industry understands the frustration that brought this to The Hill, but not having a unified database of financial reporting is not an option. This infographic from The Data Transparency Coalition explains it the best. Click here to see their high-resolution version.
Disclosure: I am a registered Independent, generally vote Democrat and make money marketing our intelligent value XBRL services.