Bob Schneider is a Partner in 
Wilson So is the Director of Hitachi Consulting Corporation At Least for Now, It’s Just an IDEA
Written by Matt Kelly Posted on August 27, 2008
Matt Kelly is editor-in-chief of Compliance Week, a magazine and online newsletter on corporate governance, risk, and compliance. Prior to his role at Compliance Week, Kelly was a reporter and contributor on corporate compliance and technology issues for magazines such as Time, Boston Business Journal, eWeek, and numerous other publications.
You know the Securities and Exchange Commission is serious about mandating XBRL technology when it announces that it’s going to implement XBRL itself.
At least, that’s what SEC Chairman Christopher Cox is promising. Last week he heralded the long, slow demise of EDGAR, the SEC’s decades-old filing system, responsible for eyestrain at countless computer terminals around the world. In EDGAR’s place will be IDEA — the hot new thing in corporate reporting systems, promising a paradise of faster, cleaner, easier-to-read corporate financial reports, all thanks to XBRL. Cox introduced IDEA (Interactive Data Electronic Applications) at a press conference complete with guest speakers, a live webcast, and a nifty IDEA logo hanging on the wall behind the podium.
This immediately suggests IDEA isn’t going to arrive any time soon.
The truth is that the gravity of any SEC pronouncement is inversely proportionate to the flashy media display accompanying its arrival. All the really deadly stuff is posted to the SEC website at 4:57 p.m. on a Friday. When you see clever logos and press conferences promising the imminent arrival of something, relax.
Indeed, a close reading of Cox’s remarks last week shows that EDGAR isn’t going anywhere. Companies will still make their corporate filings via EDGAR as always. Investors will still use EDGAR “for the indefinite future.” And while the SEC is promising that IDEA-like features will be grafted onto EDGAR filings by the end of the year, nobody has described exactly what those features will look like, or how investors will use them. Presumably the SEC’s own IT systems will allow investors to see the XBRL-tagged data, in a souped-up version of the XBRL reader applications on the Commission’s website right now. But that’s just a guess.
Yet again, we are seeing the fundamentally uncertain dynamic of XBRL adoption in the United States so far: an excellent idea, with no clear path to its implementation. I don’t doubt that IDEA will arrive at some point, and a new tool to display XBRL-tagged data as richly as possible is something the investing public will need going forward. But why launch this now, before the SEC even publishes whatever final XBRL mandate is coming down the road?
The SEC still hasn’t sold either Corporate America or Investing America on the utility of XBRL; those three or four small reader applications on the SEC website really don’t cut it. People might not necessarily like EDGAR filings, but they know EDGAR filings. IDEA has the opposite problem: everyone likes it, but nobody knows it — the SEC included. Until the SEC solves that problem by delivering tangible, practical examples of how XBRL filings will work in ways that investors understand, the technology is still a monster truck doing nothing more than roaring its engine.
And I won’t even delve into the philosophical subtext here, of why we should move into a world of real-time disclosure when every CEO in the country wails about the pressures of meeting short-term market expectations. That is a whole blog post unto itself.