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SEC Hosts Roundtable On Interactive Data

The SEC hosted a roundtable discussion on the use of interactive data to improve disclosure that featured demonstrations of some of software tools that are currently available. PepsiCo chief executive officer Indra Nooyi opened the roundtable with remarks about Pepsi's experience as a participant in the SEC's interactive data pilot program and how the use of extensible business reporting language, or XBRL, can reach its full potential. As a consumer products company, Ms. Nooyi said Pepsi wants to be first to the market with innovative ideas, which is why it chose to be among the first to participate in the SEC's pilot program.

Ms. Nooyi said that Pepsi is "a fanatic" for accurate, timely and transparent financial reports. XBRL has the potential to pair transparency with ease of use, she explained. Based on Pepsi's experience so far, Ms. Nooyi said XBRL is intuitive and relatively inexpensive. Pepsi had to enlighten not only its internal departments about the presentation of its financial reports in XBRL, but also external parties. Many analysts do not have the software to read it and do not know what it is, according to Ms. Nooyi.

In order for XBRL to meet its full potential, Ms. Nooyi said the expertise of multiple stakeholders must be tapped. The industry must strike the right balance between the standardization of taxonomies and customized taxonomies, she added. XBRL must be structured enough to survive and flexible enough to be useful. Ms. Nooyi said it is important that XBRL gain momentum quickly. She believes the SEC is well-positioned to lead the movement.

When asked about a timetable for companies to begin filing in XBRL, SEC Chairman Christopher Cox said it would be unfair to mandate such filings when the taxonomies are not yet complete. That is why the SEC will finance the completion of the taxonomies, he said. The SEC is also gaining real world experience through the pilot. He pointed to Pepsi's experience and its reports of the low costs of implementing XBRL. Chairman Cox believes the benefits will be so great, that once the taxonomies are in place, companies will voluntary file interactive documents for the cost savings.