Congressman Mr. Robert Hurt (R-VA) introduced a new bill H.R. 4164 on 03/06/2014 called: H.R.4164 – Small Company Disclosure Simplification Act.
This bill is “To exempt smaller public companies from requirements relating to the use of Extensible Business Reporting Language for periodic reporting to the Securities and Exchange Commission, and for other purposes.”
The detail is here:
Mr. Robert Hurt has pushed in this direction before:
In my opinion, this bill is against the trend of making data machine-readable in many industries.
Healthcare industry has a number of data standards to digitize patient records, facilitate electronic exchange and measure quality of care. Even the pipeline industry has its own data standard called PODS (Pipeline Open Data Standard).
There are benefits to have open data standards like XBRL to digitize financial reports from the smaller companies. If it is not obvious now, the benefits will be seen in the future. To exempt them from XBRL requirements is to move backward.
But there is true significant cost (time and money) for the smaller companies to digitize financial statements. What can be done to help them?
Let’s look at the healthcare industry. The cost burden in adopting data standard is not unique in the financial industry.
Smaller hospitals, clinics and professionals have no technical knowledge, time and money to digitize patient information. They have much bigger and much more complex data standards than XBRL to deal with.
So what makes these hospitals, clinics and professionals adopt data standards?
One, there are federal mandates and phased-in implementation guidelines. This is the same with XBRL. The SEC has been doing this since 2009 when the mandate started for big companies and the timelines were set for smaller companies.
Second, there are assistance and incentives from the federal, state and local agencies, in the form of grants and tax credits. For example, CMS (Centers for Medicare and Medicaid Services) has the EHR Incentive Programs:
“Eligible professionals can receive up to $44,000 through the Medicare EHR Incentive Program and up to $63,750 through the Medicaid EHR Incentive Program.”
Congressman Mr. Robert Hurt wants to help the smaller companies on their XBRL filings. A different kind of bill – with the financial assistance in the form of grants or tax credits – will do better than this bill, for now and for the long term.