SEC launches XBRL viewer

By Dominic Jones

THE US Securities and Exchange Commission (SEC) has launched a new Web-based tool that allows investors to view XBRL documents filed with the commission.

Called the Interactive Financial Report Viewer, the online application converts raw XBRL filings into something humans can read. And while that’s all it does — it does so quite well.

SEC Chairman Christopher Cox, who unveiled the tool at the XBRL International 14th Global Conference in Philadelphia yesterday, said more functionality was coming.

The SEC launched its web-based XBRL viewer yesterday.

He also pointed out that it is not the SEC’s intention to become a software developer. The demo is merely a way to make XBRL more relevant to investors and to encourage the software industry to develop XBRL tools.

To that end, the technology underlying the viewer is or will be open source. Meanwhile, XBRL pioneers like UBmatrix and Rivet Software have announced that they will open source their XBRL processing engine software code.

In his remarks yesterday, Chairman Cox said the SEC hopes “to stimulate the private sector development of software that uses SEC data feeds, so that investors will have better and faster information from the analytical tools created by securities analysts, private software developers, web publishers, and other media outlets that rely on publicly disclosed financial information.”

A key stumbling block for the SEC and investors is the lack of available US company XBRL financial data to view and analyze. Currently, investors can use the SEC’s XBRL web tool to view financials for only 32 companies that are part of a voluntary filing program.

Until there is a much broader base of companies providing XBRL financials, most viewing tools for investors are of little use. Ultimately, the SEC will have no choice but to make the format mandatory for all issuers.

Glimpse of the future

In the meantime, investors who are willing to spend some money can take advantage or proprietary XBRL databases such as that of EDGAR Online, which used the occasion of the international conference to launch the next edition of its XBRL tools called I-Metrix 2.0.

This product offers a glimpse into the future of XBRL tools for investors. It combines EDGAR Online’s proprietary database of XBRL data covering over 11,000 companies with new analytical capabilities.

Open to beta testers, I-Metrix 2.0 will be available to EDGAR Online customers in the first quarter of 2007 and works with the newly released Microsoft Office 2007 and Windows Vista.

New enhancements in the release include:

• New screening tools that let investors filter EDGAR Online’s XBRL database to find companies matching their criteria, highlight anomalies, identify peers, and detect industry trends.
• Built-in valuation models such as Discounted Cash Flow, Dividend Discount, Free Cash Flow and Peer Analysis.
• Selected XBRL tagged footnotes to provide insight into a company and its performance.

EDGAR Online also said it is adding data from both the Shenzhen and Shanghai Stock Exchanges for Chinese companies.

Hyperbole abounds

Of course, developing and providing tools for investors is only part of the XBRL story. Software developers are hard at work on applications to help financial report preparers integrate XBRL into their internal systems.

There has been a slew of news releases over the past few days from a range of companies. Unfortunately, a lot of them of filled with technical jargon and heavy “marketese.”

My head is spinning from the number of times I saw vacuous phrases and terms like “world’s first,” “newest and most sophisticated,” “gold-standard,” “first platform in the world,” “major advance in the field,” “unrivaled.”

The shrill hyperbole needs to be toned down and more focus placed on the benefits to companies.

In fact, I’d suggest that if you are looking for vendors to help with preparing your company’s financials in XBRL, then you’d do quite well to exclude those that use overly promotional language in their news releases.