EDGAR, the Securities and Exchange Commission’s amusingly named electronic database of public company filings, is headed for extinction after 20 years of service to investors. On Aug. 19, 2008, Christopher Cox, the SEC Chairman, introduced IDEA. Short for Interactive Date Electronic Applications, IDEA will replace EDGAR, and promises to allow investors to sort through and compare information from the SEC filings of multiple companies with one search. Currently, EDGAR users who want to compare information about multiple companies must search for the information by looking into each company’s filings one form at a time, or by using EDGAR’s antiquated search capabilities. Currently, there is no way to export information from EDGAR into a user’s own spreadsheet or computer program.
IDEA is based on completely new system architecture and is being built from the ground up. IDEA is being designed to work seamlessly with XBRL. XBRL is an interactive data-tagging system that relies on computer “tags” that identify individual items in a company’s financial disclosures, and will allow information from multiple companies to be easily searched, downloaded and compared. Earlier this year, the SEC proposed rules that would require public companies and mutual funds to begin tagging their financial statements using XBRL as early as 2009. The SEC expects that the introduction of IDEA and XBRL will generate many new Internet-based services and products for investors.
During the transition to IDEA, the SEC plans to add certain of IDEA’s interactive features to EDGAR, including IDEA’s advanced search capabilities and its ability to download search results to spreadsheets or analytical software. Some public company filings are expected to be available though IDEA by the end of this year. After IDEA becomes fully operational, the SEC will continue to maintain EDGAR as an archive of company filings from past years. Aside from the upcoming requirement to tag financial data using XBRL, it is unclear whether the current EDGAR coding process (often called EDGARization) and filing procedure will change with the implementation of IDEA.