EDGAReView

The original developers of XBRL envisioned a ‘killer app” that would free the  business data locked in text-based documents. But acceptance of the new data format in the conservative world of corporate accounting required a mandate from the U.S. Securities and Exchange Commission. The SEC’s new rules are about to kick in, starting with the biggest public companies, who must report their first quarter  2009 reports as interactive data. Are they ready to comply? Is the SEC still behind XBRL?

Large companies are ready. At least 340 of the estimated 500 large public companies first impacted by the mandate have made the conversion, according to a survey from XBRL US, the nonprofit group responsible for the data standards. Starting with first quarterly reports (10-Qs), all companies with a public float exceeding $5 billion, will file XBRL data. That enhanced data is instantly accessible to investors and analysts, who can automatically search and download the information into Excel spreadsheets for automated analysis. The mandate phases in over two years, until all public companies have made the switch to XBRL.

Some companies are still unaware. According to another survey, a lot of corporate financial offers are still resistant or completely unaware of what’s coming. An April 2009 survey of CFOs and senior comptrollers conducted by Grant Thornton, showed 64 percent of public companies have no plans whatsoever to use XBRL. Won’t they be surprised… We have to assume that this sampling of 100 corporations included smaller ones, which won’t be affected by the mandate for another two years. But even those larger companies who “didn’t get the memo” will still have time, because a standard report can be converted to XBRL very quickly. Smaller companies will get a “head’s up” when they file this year, when they have to check a box that asks whether they are posting XBRL data on their websites. That first official encounter with XBRL filing should cause some head scratching.

Is the SEC still behind XBRL? Messages are mixed from the SEC, which has changed leadership since the new rules were was announced last year. For all the criticism of former Commissioner Christopher Cox, most critics still credit the XBRL mandate as a major, if not the major accomplishment of his tenure. The new Commissioner, Mary Schapiro, however, has made it clear that Interactive Data is not her priority. That’s understandable given the Bernie Madoff fiasco and possible merging of the SEC with another oversight agency; but fortunately, everything is already in place, including the mandate, the new technology infrastructure, and the people who do understand XBRL. Commissioner Schapiro has time to learn the advantages this will bring to her agency, and the SEC’s greatly improved ability to more quickly communicate superior business data to the public.

Is EDGAR Online ready? EDGAR Online is a founding member in the XBRL organization and most of the companies who have already filed or are now converting their financials into the XBRL format have used the services of EDGAR Online and RR Donnelley. They developed a highly efficient conversion process during the SEC’s voluntary filing program.  As one investor wrote, EDGAR Online “is the market’s only pure-play on XBRL.”  His comments were in response to the company’s live conference call to discuss the company’s first quarter 2009 results. The event is archived here.

What job opportunities does XBRL create? The recent increase in posting for XBRL and SEC reporting jobs speaks volumes.  Although the SEC mandate represents the world’s largest XBRL implementation, it’s a world-wide transformation being implemented in every major financial market and stock exchange. You can track it all at XBRL Planet, a site that includes a new Google Earth interface, jurisdiction snapshots, local streaming news and market updates, and an online language translation facility.  XBRL is truly, the new, global language of business reporting.