The SEC has long been a vocal supporter of extensible business reporting language (Xbrl), with its voluntary filing program blazing a trail for interactive data. However, as many analysts and investors pointed out when the voluntary filing program began over two years ago, companies could file in XBRL but there was no widely used free way for investors to view the data. One analyst reportedly phoned the Ceo of Pepsi to complain that the XBRL documents the firm had just filed with the SEC were gibberish.
This all changed last December when the Sec made available a demonstration release of its interactive financial report viewer, a tool that allowed users to view XBRL filings submitted to the commission. This was upgraded in March to a fully functional, open-source software, giving users the opportunity to search and compare documents with charts and comparison reports, as well as the facility to export data to Excel.
The look and feel of the viewer was also overhauled, making it significantly more user-friendly. A second viewing tool will be launched by the Sec this summer, having much the same functions as the current one but offering different ways to achieve the same goals. By providing these two sample tools, the commission hopes to encourage software makers to launch a wide variety of new XBRL tools.
Right tools for the job
‘The SEC will provide some tools on its website and, as is natural, the private market will develop feature-rich, sophisticated tools tailored to different audiences,’ promises Jeff Naumann at the office of the chief accountant at the SEC. ‘We’re trying to draw a baseline and encourage the market to come up with creative ideas we hadn’t even thought of.’
Naumann agrees the SEC’s viewing tools are arriving not a moment too soon. ‘Until December 2006 the data wasn’t readable on our site, so this first tool filled a gaping hole,’ he notes. When asked why there was a delay between companies filing in XBRL via the voluntary program and the launch of the viewing tool, he explains: ‘The XBRL standard was obviously the cornerstone. On top of that you needed sufficient taxonomies and data in XBRL before a reliable tool could even be created. We launched our voluntary program while the XBRL market was still emerging, so it’s natural the tools came later.’
Perhaps the Sec, like many companies and investors, wanted to see whether XBRL would take off before investing in viewing tools. But with more companies joining the commission’s voluntary filing program and more countries around the world embracing XBRL, it seems the SEC has no doubts about making XBRL mandatory in the not-too-distant future.
As well as the SEC’s new tools, there are various others emerging, including other viewing tools, tools to help with the creation of XBRL documents and tools to help analysts with comparison and analysis. But the market is moving fairly slowly and is far from saturated, says Christy Rohrs, senior consultant for professional services at Rivet Software, a Colorado-based company involved in creating the SEC’s interactive financial report viewer.
‘It’s difficult because the market is not knocking on our door saying, I have to have XBRL tools,’ she says. ‘People want to see how XBRL develops and they’re also a little gun-shy after Sarbanes-Oxley, which was expensive. A lot of companies are taking a wait-and-see attitude.’ ‘One of the things vendors are looking at is when there will be a critical mass of XBRL data available,’ adds Naumann. ‘I think we’re building toward that point.’
