On Wednesday the SEC unanimously voted to propose a rule that calls for companies to report their financial data using interactive data tags that uniquely identify individual financial statement items. The data tags are often referred to as extensible business reporting language (XBRL).

The data tags allow the information in financial statements to be more easily searched and compared by investors, analysts, and the general public. SEC comments suggest investors will be the main benefactors of the new system with no word yet on the expected cost of compliance. Presumably, if investors will benefit from the ease of financial statement comparisons, companies that perform well in such comparisons will also benefit by attracting the investors.

Under the proposed rule, the largest companies (public float above $5 billion) must use the data tags beginning in 2009 for fiscal periods ending late 2008. All other public companies will report using data tags over the following two years.

The SEC will post the proposed rule on its website when available, and public comments will be accepted for 60 days.