We at MFA wish you all the best in the Holiday season, and we look forward to resuming our blog entries in 2009.

Happy Holidays!

The SEC voted yesterday to make XBRL the official standard for communicating business and financial information.  As XBRL Blog Magazine reports, the mandate comes out of a roundtable held by the SEC, and might require compliance for companies reporting as early as June 2009.

We noted over the summer in a post on XBRL that in a June survey by Compliance Week, 55% of 236 financial reporting executives had started researching XBRL or were not aware of the subject at all, and less than 20% of respondents had anybody on staff considered to be an XBRL expert.  This SEC mandate will demand a short learning curve for the first half of 2009; the transition might be challenging but the payoff will be considerable.  As we wrote in that earlier post, “Long-term benefits are likely to be realized by those businesses that are willing and able to embrace the technological change that XBRL will bring about, such as easier and faster access to competitive information and knowledge.”

The SEC’s study of mark-to-market accounting is winding down, and Compliance Week’s Tammy Whitehouse published some interesting insight into the initial comments made by SEC Chariman Christopher Cox.  The main thrust is that the fair value model is not at fault for the grave concerns of the markets, and that the standards need to be viewed as a constant amidst the carnage.

In answer to the call that went out for a rule change to ease the burden on companies that have been hit by a deterioration in value, Whitehouse offers a key observation and quote from Cox:

Cox defended the independence of the standard-setting process at the Financial Accounting Standards Board, where the accounting rules are written, imploring the future administration from excessive tinkering. Invoking lessons from the market collapse of the 1930s, the savings-and-loan crisis of the 1980s, and the corporate scandals of the 1990s and early 21st century, Cox said standard setting must remain free of self-serving influences. “It must also be protected from any regulatory reform in the new Congress and administration,” he said. “Accounting standards should not be viewed as a fiscal policy tool.”

A silver lining from the global financial debacle may be that standards are better understood and more widely respected.  Just Google “mark to market accounting” (here - I did it for you!) and witness the litany of results from the Fall of 2008 –  It’s clear that the concept has hit the mainstream.