Companies' initial efforts to apply interactive tags to the financial statements they file electronically with the Securities and Exchange Commission have been fairly successful. But companies face a much bigger challenge this year when they have to start applying tags to the details in the footnotes of their financial statements. By using Extensible Business Reporting Language (XBRL) tags, companies make it easier for investors to compare their financials with those of other companies. The XBRL mandate is being phased in, and the 500 biggest companies, which were required to start tagging with their second-quarter filings last year, must implement detailed tagging for their second-quarter filings this year.

While companies used about 250 tags on average in the first phase of implementing XBRL, that number will balloon with detail tagging, says John Truzzolino, managing director of electronic solutions at R.R. Donnelley & Sons, a Chicago-based printer that provides SEC filing services.

"The challenge is going from 250 to possibly 600 or 1,000 elements, because of the four levels of tags that are required," Truzzolino says. In the second phase, companies must tag each table, each number and each accounting policy referenced within a footnote, as well as tagging each footnote as a whole.

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Susan Kelly

Susan Kelly is a business journalist who has written for Treasury & Risk, FierceCFO, Global Finance, Financial Week, Bridge News and The Bond Buyer.