House Resolution 5405 which was passed by the House of Representatives earlier in September, contains a passage that would exempt "small" firms from filing their financials in eXtensible Business Reporting Language (XBRL).
Some Q & A:
Q: What is the definition of small?
A: According to this legislation, a 'small' company is one with annual revenues of less than $250 million, despite the fact that many such companies have assets well over $1 billion.
Q: How many firms would be exempt under this proposed legislation?
A: In 2013, there were 2,700 entities that reported revenue greater than $250 million. There were 4,280 who reported revenues less than $250 million. These firms would be exempt!
Q: What are the costs related to XBRL as compared to the other costs associated with being a public company?
A: XBRL costs vary with the complexity of the statements being prepared. However, budget conscious companies see a bill between $50 and $100 thousand a year. Compare that to the $2.1 BILLION in investment banking and legal fees paid in 2013 by these 4,280 companies, just for stock issuances alone!
Q: Anything else??
A: Why yes, exempt firms would include some household names like E-Trade, and Solarcity, a $5 billion market cap firm! Does anyone consider these to be small companies?
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