Potential Cost Savings for Emerging Growth Companies
Reversing the results of a vote earlier this month, the House of Representatives has now passed HR 37 “Promoting Job Creation and Reducing Small Business Burdens Act,” which includes a voluntary exemption for “emerging growth companies” to choose not to utilize Extensible Business Reporting Language (“XBRL”) for financial statement reporting with the SEC. The vote, on January 14, was 271-154. The bill has now gone to the Senate Banking Committee.
HR 37’s future is not without controversy as many believe the bill represents a major setback to data transparency while others believe that XBRL data is of limited utility. In addition, HR 37 contains other provisions relating to the Dodd-Frank Act including delaying the so-called “Volcker rule,” an exemption for merger and acquisition brokers from SEC broker-dealer registration, and a requirement for the SEC to look at ways to simplify their disclosure rules under Regulation S-K. HR 37 still requires Senate and Executive approval and its opponents are concerned that the bill represents a setback to banking regulations enacted under the current administration.