The Securities and Exchange Commission unveiled its next-generation system for online financial filings, IDEA, the successor to its EDGAR database.
IDEA, short for Interactive Data Electronic Applications, uses interactive data tags. Investors will be able to collate information from thousands of companies and forms, and create reports and analysis on the fly.
"This isn't just a renaming of EDGAR," said SEC Chairman Christopher Cox (pictured) at a press conference. "It's a fundamental change in the way the SEC collects information."
The SEC has formally proposed requiring U.S. companies to provide financial information using interactive data beginning as early as next year, and separately has proposed requiring mutual funds to submit their public filings using interactive data.
The IDEA logo will begin to appear on the SEC's Web site as the agency transitions to making IDEA the primary source for all SEC filings. Companies' interactive data filings are expected to be available through IDEA beginning late this year.
Investors and others who currently use EDGAR will be able to continue to do so for the indefinite future. During the transition to IDEA, investors will be able to take advantage of new interactive features that will be grafted onto EDGAR in the short run. The EDGAR database also will continue to be available as an archive of company filings for past years.
Cox noted that EDGAR dates back to the era of mainframe computing, and IDEA will make analysis faster and cheaper for investors. He demonstrated how difficult it is to search for specific financial data on mutual funds with EDGAR and then to cut and paste it into an Excel spreadsheet. The SEC now offers a tool on its Web site that automates mutual fund comparisons by using Extensible Business Reporting Language technology.
Cox also said the XBRL tags would make it easier to read the financial statements of foreign countries because XBRL includes automatic translation capabilities. China and Japan, as well as several European countries, have already begun to use XBRL.
Cox noted that some of the companies that were part of the XBRL test-filing program spent about $30,000 to tag their financial statements the first time, but the ongoing costs are relatively modest, unless a company makes a major change such as an acquisition. The SEC plans to hold a roundtable discussion on interactive technology on October 8.
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