The Securities and Exchange Commission is now allowing companies to comply with their XBRL filing requirement by integrating tagged data into HTML filings.

The SEC issued an order under the Securities Exchange Act to allow companies to file structured financial statement data required in quarterly and annual reports embedded into traditional HTML filings through March 2020. The integrated approach is called Inline XBRL. The SEC is hopeful that companies will take advantage of the voluntary allowance to improve the quality of data and perhaps even reduce the cost of compliance.

Inline XBRL wasn’t yet operational in the late 2000s when the SEC first began requiring companies to submit their financial statement data in XBRL. That has meant companies have filed their financial statements using the traditional method, and then taken the additional step of tagging their data in XBRL to submit or file it separately.

Companies have continued complying with the dual filing requirement after the establishment of the integrated approach, awaiting SEC permission to provide one integrated filing rather than two separate filings. The SEC says its EDGAR system through which companies submit their traditional HTML filings has been upgraded to facilitate Inline XBRL, so it is now open for business.

XBRL (or eXtensible Business Reporting Language) is a machine-readable format that is intended to make it much faster and easier for users of financial statement data to access, search, and sort the information. While the largest companies have been submitting data in XBRL for nearly a decade, use of the data submitted in XBRL has been slow to catch on with analysts and investors.

Critics have said users are not flocking to systems that utilize XBRL-tagged data because the data contain too many errors to be reliable. Companies often state negative numbers as positive, for example, or mistake millions for billions, and vice versa. The SEC has been slow to act to require companies to take measures to improve the accuracy of their XBRL filings. Companies are not required to have their XBRL filings audited.

In its order permitting Inline XBRL, the SEC says Inline XBRL could be the answer. “Inline XBRL could decrease filing preparation costs, improve the quality of structured data, and by improving data quality, increase the use of XBRL data by investors and other market participants,” the order says.

Experts at Workiva say allowing inline XBRL will prove more efficient for preparers because they can prepare one filing instead of two. It also should reduce the opportunity for error associated with the added separate step of tagging data, and it will enable accountants to prepare an HTML document that is visually familiar to them, also reducing the opportunity for error. XBRL experts have said accountants often make changes to XBRL renderings based strictly on visual appearance of the document, contributing to tagging errors.

The window of opportunity, however, is limited, the SEC says. The order is only effective through 2020. “In light of the potential benefits from using Inline XBRL, we are initiating a voluntary, time-limited program to assess the usefulness of this new filing format,” the order says. “This voluntary program also may facilitate the development of technological tools to support the potential further use of Inline XBRL in the future.”