A bill introduced in the House of Representatives in March would exempt small public filers from having to use eXtensible Reporting Business Language (XBRL), a computer markup language that has been mandated for all filers by the Securities and Exchange Commission (SEC) since 2011.

XBRL uses a standard set of definitions or “taxonomies” that enables the automatic extraction and exchange of financial data. The data can be read by computers and fed into analytic tools, allowing investors to access specific information from a filer’s reports much faster than if they had to manually search through corporate documents, according to the SEC.

The SEC approved the mandated use of XBRL for public companies in 2008 and released the final rule to the public in April 2009, though the commission did allow for a phased implementation: domestic and foreign large accelerated filers with a worldwide public common equity float over $5 billion had to start using XBRL in June 2009, while all other large domestic filers were required to use the language starting in June 2010. All other filers, including small public companies, were required to use XBRL by June 2011.

On March 6, Rep. Robert Hurt, a Republican from Virginia, introduced H.R.4164, the Small Company Disclosure Simplification Act, which, if implemented, would exempt small public filers from the SEC requirement to use XBRL. Under the bill, if an entity is classified as an Emerging Growth Company—defined by the Jumpstart Our Business Startups Act as an issuer with total annual gross revenues of less than $1 billion during its most recently completed fiscal year—it would not have to use XBRL when it files with the SEC. If a filer is not classified as an Emerging Growth Company, but its annual gross revenues are less than $250 million, it too would be exempt from the XBRL requirement and would continue to be exempt until either five years have passed since the passage of the bill into law, or “a determination by the commission … that the benefits of such requirements to such issuers outweigh the costs.”

In addition, the act would require the SEC to conduct an analysis of the costs and benefits of the XBRL requirement and report the results to Congress. The bill cleared the House Financial Services Committee on March 14 by a vote of 51 to five and is currently awaiting approval by the house as a whole.

“With millions of Americans still out of work, our top focus in Congress should be enacting polices to help spur job creation throughout the country,” Rep. Hurt said in a statement released shortly after the bill was introduced. “We must refine costly regulations—especially those disproportionately affecting smaller public companies and those who are considering accessing capital in the public markets. The requirement of [XBRL] has proven to be an example of a regulation where the costs currently outweigh potential benefits for small, innovative companies.”

In its own statement, XBRL US, the national consortium for XBRL business information reporting, said it disagreed with the bill, arguing that it would “result in small companies losing equal access to the capital markets because their corporate data will be less accessible and less transparent than large company data,” among other things.

However, Mitchell Mertz, a member of the NYSSCPA’s SEC Practice Committee who works with public companies as director of quality control at MGI Repetti, said he thought the act made sense. Mertz noted that while XBRL allows for easy comparison between companies, “I don’t know how important that is for smaller companies to have, at least initially.”

“I think it’s good, especially for new companies and developing companies. They have enough to worry about in raising funds and operating, and if they don’t have to deal with [XBRL], it’s a small thing off their plate,” he said.

Elliot L. Hendler, also a member of the SEC Practice Committee, agreed, noting that the bill  “is not an unreasonable proposal.” However, he added that, in general, he doesn’t think XBRL in and of itself improves things for entities of any size.