After recently attending a South by Southwest panel  “Data is Money: How Geeks are Changing Finance”, I realized there was a high level of groupthink in regards to how technology and XBRL can empower investors to make better financial decisions.  From the panel, questions from the attending audience, and the twitter mments (#datamoney) posted during the session, it was clear to me that XBRL is often dismissed or misunderstood as a potential solution for current issues regarding data transparency.  A few key points were raised by the panelists in this discussion in regards to this new mandate that need to be clarified and, in my opinion, discussed below.

Claim 1 – Due to the fact that all public mpanies will not fully mply with XBRL until 2012, this mandate will not be relevant to investors until that time.

I agree with the panelists that the XBRL data will not be fully mprehensive until 2012.  While the full range of public data in XBRL will not be available for the general public until 2012, around 500 of the largest mpanies in the United States have already filed in XBRL – their XBRL data is already aessible on the SEC’s web or through Rivet’s CrossView to the general public (for free).

By December 2010, nearly 2000 of the largest US public mpanies will have filed a 10-K in XBRL with the largest 500 reporting detailed information into their notes which has never been able to be aessed programmatically. By 2012, the number of mpanies who will have filed in XBRL will be over 10,000. By utilizing the existing XBRL analysis tools available on the market today, investors have aess to instantly mpare some of the largest mpanies in the United States today.

Claim 2 – XBRL is too mplicated for the individual investor as it is XML-based de.

nsumers of XBRL data are shielded from the de behind the numbers, much like nsumers don’t need to read HTML (or XML) to view a web page.  HTML has a browser to render the de, similarly the SEC has implemented an open source XBRL viewer that renders just like your average web page.  (You want to see right now?  Check out Google’s XBRL data.  Where’s the mplex de?)  In addition, many mpanies have developed their own software that allows robust analysis of multiple mpanies – all without the user ever needing to view XBRL de – just the financials they are austomed to viewing.

The end result for investors is an easier to use and navigate source of financial information.  By linking references and definitions to every piece of financial data, in an easy to use, rendered format, users can aess this “tagged” data as soon as it is filed, right from the horses’ mouth.  The ability to aess and mpare this information right in excel saves investors a great deal of time and energy on how to get at the data.  By limiting the role of 3rd party data aggregators, investors can spend more time on data analysis and less time on how to get at the data itself.

Claim 3 – mpany line items can’t be mpared due to mpanies using different definitions of line items (such as operating expenses)

With best practices and software tools already in place to categorize the US GAAP XBRL taxonomy definitions by industry, statement, and definition, mpanies can easily choose from the line items and associated definitions that best represent their specific needs.  What this means for investors is that while mpanies may not use the exact same definition, there is usually only a few options that they choose from – making nsolidation and analysis of the possible definitions simple.

Prior to XBRL, while mpanies may have used the same line item name, their internal definitions of say, revenue, varied widely. Often times, nsumers were not mparing apples-to-apples as XBRL now enables them to do. While mpanies may still maintain different definitions of Revenue, with XBRL investors now know mpanies are using different definitions and can choose to aggregate that data for analysis.  Investors can already take advantage of existing XBRL data to instantly aess, mpare, and analyze mpanies’ financials side-by-side, regardless of the definition – today.

As with all new standards, XBRL will ntinue to evolve with user feedback.  The XBRL data for the largest mpanies in the world and the tools to analyze the data are available to use today.

While technology alone will not fix the behaviors that ntributed to our recent financial crisis, XBRL provides investors with a higher degree of data transparency along with the tools they need to make more cated investment decisions – holding public mpanies acuntable for the financial information they provide to the public.