Tuesday, July 5, 2011

XBRL spells fleet of foot

I am an outsider. So to me this topic is new. I just found something this weekend that I think is a White Crow, disruptive technology. Maybe the fact that I have seen a white paper on XBRL is an indication that it is reaching acceptance.

The SEC mandate for XBRL took effect on June 15, 2009. The Securities and Exchange Commission has officially adopted a rule requiring public companies to begin filing their financial statements in an interactive data format.

Wikipedia describes XBRL as
XBRL (eXtensible Business Reporting Language) is a freely available, market-driven, open, and global standard for exchanging business information. XBRL allows information modeling and the expression of semantic meaning commonly required in business reporting. XBRL is XML-based."
Freely available, not free. Edgar (EDGR) on-line has several products called I-metrix  and I-metrix professional that shows the power of this information modeling.

From the trader's perspective, new information took a day before it was assimilated into all the different financial databases. Financial processing required a manual entry of the financials data into separate proprietary systems, like Thomson Reuters. These feeds sent information to other financial websites.  Now it will be available almost instantly. It will be scanned by a computer on receipt by Edgar and entered into their database. Analysts can then compare the financial information, using information modeling, of two companies as the news hits the wires.

Photo by http://www.signsbyyou.com

For those that have the resources and expertise you can access the database directly. I'm not sure of the fee. There is an API and sample code to build your own access into this Edgar database. There is even an Open source analyzer version built in RUBY.

To get a good overview of the technology read this article.

News Information dissemination has just gotten even faster....

1 comment:

  1. Companies that are using XBRL and see its potential are eager for the platform to emerge past its growing pains. They are calculating the cost of submitting their financial data in two completely separate formats to accommodate dual reporting regimes. Some are frustrated by naysayers, like the Financial Executives International’s Committee on Corporate Reporting, who are telling the SEC to curtail or halt XBRL adoption. CCR sent an unsolicited comment letter to the SEC asking that companies be allowed additional time to complete the filing, and that they be permitted to do less detailed tagging.