Terry Savage
The Securities and Exchange Commission is creating a new financial "language" that is designed to give individual investors an advantage previously available only to securities analysts and huge firms.
Soon, all corporations will report their financial information in a format called XBRL, which is an acronym for Extensible Business Reporting Language. And you don't have to understand the technology to reap the benefits. This new format will make all data interactive, which means anyone can go online and easily find all the corporate data that's been filed, including financial reports, footnotes and management's take on the company's prospects -- the management's discussion and analysis, or MD&A, filing. I got a close-up view of the format's potential benefits for investors last week, when I moderated a panel at SEC headquarters in Washington, D.C. The project is being accelerated by SEC Chairman Christopher Cox, who says: "We are on a campaign to liberate business and financial information that is now filed at the SEC but is currently trapped inside dense documents." Cox believes that "liberation" will benefit both individual investors and the capital markets. The data that companies are currently required to file are available on the agency's Web site. The database for all that information is called Edgar -- Electronic Data Gathering, Analysis and Retrieval -- a system developed about 20 years ago when filings such as annual corporate 10K reports or quarterly 10Q reports first went online. But except for securities analysts, few individuals would dare wade through all the material posted there.
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