Washington, D.C .- The Securities and Exchange Commission furthered its eXtensible business reporting language (XBLR) initiative this week with the launch of its “Financial Explorer” on the SEC Web site.
SEC is making corporate financial performance information available via diagrams and charts on public companies that reported information using XBRL. Since announcing the voluntary filing program in 2005, the SEC’s XBRL initiative has been growing.
ACORD, the Pearl River, N.Y., insurance standards body, began work in early 2005 with New York-based XBRL International, the not-for-profit consortium tasked with building out the XBRL language to examine the need for data standards and evaluate their respective roles in overall communications flow. The two teamed to publish a white paper called “XML Standards and the Insurance Value chain.”
In broader terms, XBRL serves the overall financial services community with a standard for business financial reporting. From the back office outwards, the XBRL standard constitutes the XML standard for enterprise business reporting to a variety of stakeholders including regulatory authorities, analysts, and investors.
“XBRL is fast becoming the universal language for the exchange of business information and it is the future of financial reporting,” says SEC Chairman Christopher Cox. “With Financial Explorer or another XBRL viewer, investors will be able to quickly make sense of financial statements. In the near future, potentially millions of people will be able to analyze and compare financial statements and make better-informed investment decisions.”
The software takes the work out of manipulating the data by entirely eliminating tasks such as copying and pasting rows of revenues and expenses into a spreadsheet. That frees investors to focus on their investments’ financial results through visual representations that make the numbers easier to understand.
Financial Explorer lets investors automatically generate financial ratios, graphs, and charts depicting important information from financial statements. Information including earnings, expenses, cash flows, assets, and liabilities can be analyzed and compared across competing public companies.
Financial Explorer is open source, so technology and financial experts can update and enhance the software. As interactive data becomes more commonplace, investors, analysts and others working in the financial industry may develop hundreds of Web-based applications that help investors garner insights about financial results through creative ways of analyzing and presenting the information.
In recent months, the SEC also published two other online viewers – the Executive Compensation viewer and the Interactive Financial Report viewer. The Executive Compensation viewer enables investors to instantly compare what 500 of the largest companies are paying their top executives. The Interactive Financial Report viewer is designed to help investors gather, analyze, and compare key financial disclosures filed voluntarily by public companies using XBRL. To date, there have been 307 such filings from 74 companies. Under the SEC’s interactive data filing program, companies may continue to file XBRL data voluntarily, pending anticipated Commission rulemaking.
Unlike most free Internet tools that use adjusted or aggregated data and include disclaimers warning investors not to rely on the information for investment decisions, XBRL data can give investors nearly real-time access to the complete and actual data companies report under U.S. Generally Accepted Accounting Principles, says the SEC. The SEC’s interactive data initiative is designed to make financial information more accessible, more understandable, and more useful to investors. It enables public companies and mutual funds to submit information in a standardized, tagged format to facilitate analysis and comparisons.
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Source: The Securities and Exchange Commission
