Companies filing financial statements using XBRL will want to take a look at the proposed 2011 taxonomy, which has been updated to reflect the latest changes in accounting standards.

The Financial Accounting Foundation has published the proposed 2011 U.S. GAAP Financial Reporting Taxonomy for a 60-day review and comment period before it is finalized and published in early 2011. The taxonomy contains updates for changes that have occurred since last year in accounting standards as well as continued refinements and improvements in the taxonomy overall.

The taxonomy is a list of computer-readable tags in eXtensible Business Reporting Language that enables companies to precisely tag data in their financial statements. The tagging makes it easy for users of financial information, including investors, analysts, and regulators, to search for, assemble, and process data appearing in financial statements.

The 60-day review provides an opportunity for companies that file their financial statements using XBRL to check the updated taxonomy for any corrections that should be made before it is finalized and put into use in 2011.

While the taxonomy currently used by public companies was developed by an independent research organization promoting the XBRL technology, the Financial Accounting Foundation assumed responsibility in 2010 to update the taxonomy as necessary to reflect changes in U.S. GAAP. FAF is the overseer of the Financial Accounting Standards Board, which determines GAAP for all public companies as well as private and not-for-profit entities in the United States.

The Securities and Exchange Commission began requiring the largest public companies to file their financial information in the XBRL format in 2009, with the requirement further phased in for medium and smaller public companies in 2010 and 2011. The SEC championed XBRL technology to make financial statement information more useful to investors.

When data is tagged through XBRL, it can be downloaded directly into spreadsheets, analyzed in a variety of ways using off-the-shelf software, and used in investment models in other software formats. Investors say the approach leads to greater comparability among public companies.