David Kirkpatrick

December 19, 2008

SEC to require online interactive filings

Filed under: Business, Politics — Tags: , , , — David Kirkpatrick @ 11:31 am

The commission voted in use of XBRL for company filings to be fully implemented in 2014. This move will be a boon for investors in terms of getting public company much more quickly and hopefully in a somewhat less arcane manner.

I’ve done quite a bit of business reporting and had to dig through many, many quarterlies and other various filings. Right now it’s something of an art form to pull the information or number you really want out of those things.

From the link:

Financial disclosures by public companies and mutual funds will be provided in an online interactive format in the next few years under rules adopted Wednesday by federal regulators.

The changes will make it easier for investors to analyze financial data from companies, and the risk and return information provided by mutual funds in prospectuses, Securities and Exchange Commission officials said.

The SEC voted 4-1 in a public meeting to require companies and mutual funds to begin using the so-called XBRL, or extensible business reporting language, in their regulatory filings under a phased-in schedule for companies culminating in 2014. The deadline is Jan. 1, 2011, for mutual funds.

Commissioner Luis Aguilar voted against adopting the rules. He objected to the limitation of legal liability afforded to companies for some types of mistakes in tagging their information.

At a time of market turmoil and shaken investor confidence, Aguilar said before the vote, “We shouldn’t put investors at risk of relying on inaccurate information.”

Many companies already have voluntarily filed their financial data with XBRL data-tagging. Rather than treating financial information as a block of text _ as in a standard Internet page or a printed document _ XBRL language provides a unique identifying tag for each individual item of data, such as company net profit.

That enables users to extract specific information more easily from SEC filings, run calculations and aggregate data as desired. Company revenue, for example, can be tracked over several years without having to open up and review multiple filings.

The XBRL system gets information to investors faster and more reliably, and saves the companies money, the SEC said.

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