Is Your Investor Relations Website Ready for XBRL?

Companies are now required to provide their financial statements on their corporate web sites in interactive data format

The U.S. SEC recently issued new rules requiring companies to provide financial statement information on their corporate web sites in an interactive data format using the eXtensible Business Reporting Language (XBRL). This is good news because XBRL has the potential to increase the speed, accuracy and usability of financial disclosures for investors while also ultimately reducing corporate costs.

Companies are now required to provide their financial statements on their corporate web sites in interactive data format using XBRL no later than the calendar day that they submit their financial statements to the SEC (1). In this format, financial statement information can be viewed interactively from your investor relations web sites, downloaded directly into spreadsheets, analyzed in a variety of ways using commercial off-the-shelf software and used within investment models in other software formats.

The U.S. SEC rules will apply to public companies and foreign private issuers that prepare their financial statements in accordance with U.S. generally accepted accounting principles (U.S. GAAP) and foreign private issuers that prepare their financial statements using International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

This interactive data format must be provided as an exhibit to all periodic and current reports and registration statements, as well as to transition reports for a change in fiscal year. The new rules are intended not only to make financial information easier for investors to analyze, but also to assist in automating regulatory filings and business information processing.

The XBRL Challenge
Until now, individual investors could obtain only high-level key financial figures for large companies with stock price history from sites like Yahoo! Finance and MSN Money. Institutional investors and research firms with deeper pockets could obtain real-time financial data feeds from pay-per-view data aggregators like EDGAR Online. However, these data sources are highly normalized, disconnected from the source and lack any semantic annotations. In greater detail, these data sources are fed by automated screen-scraper aggregation applications culling information from the HTML or ASCII filings and then are mapped to the data aggregators’ various relational databases. This extraction process is expensive and error-prone - especially when data has to be remapped to data aggregators’ relational databases prior to distribution to their various subscription-based data feeds. Also lost in this aggregation process are essential features of financial information: access to the reporting entities’ ‘as-reported’ stories, trust in the authenticity of the content, and granular detail. Data aggregated in this manner is not able to reflect the reporting entities’ as-reported financials.

The SEC ruling introduces a phased mandate for filing in XBRL starting with the largest companies in June 2009, and the ruling will extend to companies of all sizes over the next three years. As a result, we can expect to see very large amounts of financial data becoming available in a machine interpretable format (XBRL). The challenge is to exploit this data to provide new kinds of services to investors.

With XBRL, financial data has become a lot more interactive, with an emphasis on helping users make sense of the data. What distinguishes XBRL is the precise semantics attached to every reported fact. This makes it easy to pull out specific figures and concepts, and facilitates accurate comparison. XBRL metadata also enables both drill-down to granular detail and linking to reference sources like definitions, rulings and accounting standards documentation sets.

How to Take Advantage of this Opportunity
Now is the time to get your IR web site compliant with the U.S. SEC mandate.

First, you need to ensure that your IR web site is ready and able to accept and post XBRL filings in an easily discoverable and permanently linkable manner. It is important that you clearly identify the data that you control on your IR web site. By assigning URIs (hyperlinks) to resources (actual XBRL-tagged filings), you enable other people to talk about and even share ‘as reported’ views of your filings using social networking applications.

URLs like this are not useful for XBRL filings:


A better approach is to use a URI scheme like this:


Using a numerical-based canonical URI provides an explicit hierarchical scheme that is much easier for search engines and other web browsing tools to discover. This approach represents the data in a way that people can use easily, and it will enable you to expose the data to a wider audience in a repeatable fashion.

Secondly, you should also consider delivering a rendered view of your XBRL-tagged SEC filings alongside the raw XBRL filings. Simply posting the raw XBRL files may not be enough. At this early stage in adoption, there are only a few desktop applications available to consume the XBRL content, and you will want to make sure that your site’s visitors can take advantage of the interactive data and access the rich semantic metadata-enhanced XBRL-tagged financial reports on demand.

Finally, although the SEC ruling only requires that XBRL data be made available for at least 12 months on an issuer’s web site(2), it would be wise to continue to host the data on a longer, more permanent basis. Links that disappear after 12 months can be very frustrating for users of that content and can create broken links in search engines. Also, keeping the data around long-term allows you to continue to control the data and allow for your site’s visitors to perform a historical analysis of your financials without having to search for each filing individually on the U.S. SEC EDGAR site or subscribe to expensive data feeds.

In addition, by hosting your XBRL financial content on your Investor Relations web site, the data becomes infinitely more discoverable by search engines. The U.S. SEC blocks all search engines, including Google, MSN, Yahoo, and so on, from indexing any files at the SEC.gov web site. This practice impedes individual investors from easily linking to and aggregating the content on their own.

This new approach will enable your content to remain connected to the original source - improving ‘trust’ in the provenance of the source of the information and enabling a previously unattainable level of information granularity.

If you take these few important steps, you will vastly improve the findability of your financial information, enable your site’s visitors to view your filings in real-time, share them with colleagues across social networks, link to the filings directly on your site and eliminate the barriers to access by your key stakeholders.

(1) The day the registration statement or report is submitted electronically to the Commission may not be the business day on which it was deemed officially filed. For example, a filing submitted after 5:30 p.m. generally is not deemed officially filed until the following business day. Under the new rules, web posting will be required at any time on the same calendar day that the related registration statement or report is deemed officially filed or required to be filed, whichever is earlier.

(2) The initial proposing release did not specify that the XBRL data would be required to be posted for at least 12 months on an issuer’s web site, but commenters requested clarification and the SEC did make a clarifying amendment to the ruling.

More Stories By Diane Mueller

Diane Mueller is a leading cloud technology advocate and is the author of numerous articles and white papers on emerging technology. At ActiveState, she works with enterprise IT and community developers to evangelize the next revolution of cloud computing - private platform-as-a-service. She is instrumental in identifying, building, and positioning ActiveState's Stackato cloud application platform. She has been designing and implementing products and applications embedded into mission critical financial and accounting systems at F500 corporations for over 20 years. Diane Mueller is actively involved in the efforts of OASIS/TOSCA Technical Committee working on Cloud Application Portability, works on the XML Financial Standard, XBRL, and has served on the Board of Directors of XBRL International. She currently works as the ActiveState Cloud Evangelist.

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