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Where Does the Market Obtain XBRL Data?

Merrill Disclosure Solutions | July 26, 2012

Nearly 30 years ago, it almost sounded like science fiction. On December 10, 1984, SEC Commissioner Charles C. Cox gave a prescient speech called “EDGAR: Truly A Revolution” to the SEC Institute Inc. He said:

&ldquoJust imagine yourself fifteen to twenty years from now. After dinner you go directly to your home computer-which doubles as your television set-to check your electronic mail. You find that you’ve received a proxy statement from a company in which you own stock … First, after reading the proxy statement, you transmit your proxy electronically … After you’re done, you flip on Monday night football.&rdquo

EDGAR . will make it possible for investors and analysts to do much more sophisticated economic analysis.

There is also the prospect of instant computer analysis and execution of securities transactions.

What was then fantastic is now routine. The next frontier in Commissioner Cox's “instant computer analysis” is XBRL data. The demand for XBRL-tagged financial data among investors and analysts is growing stronger. But where does the market go to obtain a company's XBRL exhibits? In this article, we explain the three main ways in which investors, analysts, and companies gain access to XBRL-tagged financials, and some of the uses for XBRL data.

The audience is watching

We hear a consistent refrain from those involved in applying XBRL at companies both large and small: It is a lot of work. Questions naturally follow: Is XBRL worth the time, effort, and resources that companies must spend to adopt and normalize it into their financial-reporting routines? Is anybody actually using corporate financial disclosures expressed in XBRL-tagged data?

The answer to both questions is a resounding yes. While more work remains to be done before XBRL disclosure is fully assimilated, especially the improvement of tagging quality by filers and the development of tools, its use by the market is already a fact. In addition to the SEC's scrutiny of XBRL financial statements for regulatory activities, XBRL-tagged data is becoming an established part of research for investors and analysts-and we are only three years into the age of XBRL filings. As the language becomes standard and the overall quality of tagging improves, expect more and more eyes to be on your company's XBRL financial exhibits.

Three sources: EDGAR, corporate websites, and data providers

Data-seekers have three primary sources for obtaining XBRL data. First and foremost, the SEC makes XBRL instance documents freely available on its EDGAR website, where data-seekers can download XBRL files to an unlimited extent. Each corporate filer's XBRL-tagged data is available in a number of ways: by an RSS feed from which users can pull the data, through download as an FTP file, or on the filing page of the filer itself.

Most seekers of corporate financials in XBRL are using the SEC's website to obtain the data. “It's important to note that all constituents that use SEC filing data have now caught on to the fact that there's a database that they can access that can make their life much easier,” observed Mike Schlanger, VP of XBRL Strategy and Business Development at Merrill Corporation, in an informative webinar broadcast by Merrill on May 17, 2012. “[Data-seekers] can conduct broad queries, very specific data-mining exercises-things that could have taken weeks, if not months…can be condensed into a very small period of time.”

Second, every corporate filer is required to post its XBRL exhibits on its own website. However, as noted by Campbell Pryde, CEO and President of XBRL US, during the Merrill webinar, “very few people” obtain XBRL financial filings from corporate websites. Most investors and analysts prefer to use the one-stop shop of the SEC's EDGAR system.

The third source of XBRL financials available to the market is the growing group of data aggregators and service providers that republish XBRL filing data in various ways. These service providers include XBRL US and Thomson Reuters, along with application providers such as CalcBench. XBRL US, for example, maintains a database of XBRL-tagged financial data obtained from the SEC and makes it available to data-seekers upon request in convenient formats, such as Excel spreadsheets.

Who is obtaining XBRL data?

Because there is no limit on the redistribution of XBRL financial data, it is not possible to track exactly who is using the information, where it is going, and how it is being analyzed. The SEC does not report the number of XBRL-data downloads from its EDGAR website.

According to Mr. Pryde, XBRL US currently receives no fewer than 5,000 requests for XBRL-tagged financials every week by data-seekers ranging from accounting firms to academics. The organization also discusses efficient data processing and use with, on average, three data-providers each week. Data is requested for myriad uses; for example, investors, analysts, and research companies seek data for financial and economic analysis, not only of financial statements from single companies but also of corporate financials across an entire industry or sector. Other seekers of XBRL financial information are mutual funds and hedge funds that are trying to fill gaps in their data sets.

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