Slowly, the princes of Wall Street are succumbing to the will of Fools.

On Tuesday, SEC chairman Christopher Cox laid out a plan to make the organization's entire EDGAR database of financial filings -- and future filings -- fully interactive using a technology called XBRL.

Think of it as Web 2.0 for investing.

In English, please ...
Still confused? No problem. XBRL is tech-speak for eXtensible Business Reporting Language.

Talk about an appropriate name. XBRL offers a way to code financial data so that it can be easily organized. Most often, this method is called "tagging." Here, it will allow any software designed to handle data -- a spreadsheet, for example -- to download and organize GAAP financial information with very little effort.

Cox put it more simply in answering a question from our own David Gardner during Tuesday's press conference. (Watch the video of the event here.) To wit, David asked what the implications of XBRL would be for a common investor named Sally Q. Fool.

Cox's response? "Let's say Sally Q. is a working mom. Sally Q. is going to have a lot more time with her kids."

What you want, in the form you want it
What he means is that searching for data will be a lot easier. Let's say you're researching retailer Hot Topic (NASDAQ:HOTT), and you'd like to see how its gross margin compares to Abercrombie & Fitch (NYSE:ANF) and Wet Seal (NASDAQ:WTSLA). With XBRL, that data would become available in EDGAR in seconds, as if you were searching the Web for the latest Britney blowup.

That's certainly cool. (Aren't all Britney blowups?) But the real power of XBRL for investors arrives when any Fool can manipulate data as the pros do. Here's how David explained it in his CAPS blog:

XBRL commoditizes screening. That's the way I see it. If what is being screened is itself a commodity (public filings), the whole experience has been made so simple and convenient that anyone can now do it cheaply and easily.

Yes, Mr. Softy, there's something in here for you, too
Firms will also benefit. According to Cox, with XBRL, the entire process of financial reporting could be automated. If he's right, that might help to keep some IPOs from fleeing overseas in fear of oppressive filing requirements.

Existing public firms appear to like what they see. Forty of them have participated in a pilot XBRL program that began more than a year ago. Among these earliest of early adopters are General Electric (NYSE:GE), Microsoft (NASDAQ:MSFT), and United Technologies (NYSE:UTX). Sweet.

Stand up, Sally
For now, XBRL is a work in progress, and a complete implementation is probably a year or more away. But investors should begin preparing for the switch now. How? There are three ways:

  1. Get a spreadsheet. To fully take advantage of XBRL, you'll want a spreadsheet that can display the data you want cleanly. It will also make doing the math for useful formulas such as return on invested capital far easier.
  2. Start studying the industries you love, or could learn to love. With XBRL making more financial data more widely available, you'll have a harder time producing a numbers-driven edge. Compensate for that by studying business models and the art of competitive advantage. Though these are more esoteric concepts, they remain essential tools for the Fool who stalks the multibagger.
  3. Bone up on accounting. XBRL could expose the accounting-challenged to information they've never before seen. Study up with an elementary text such as John A. Tracy's How to Read a Financial Report.

And if you don't do any of this? That's seven years of bad luck, bucko.

Kidding! Do only what makes investing enjoyable for you. That's the Foolish way. And, thanks to XBRL, it's soon to be the SEC's way.

Watch out, Wall Street. A gathering of Fools is upon you.

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Fool contributor Tim Beyers didn't own shares in any of the companies mentioned in this article at the time of publication. Find Tim's portfolio here and his latest blog commentary here. The Motley Fool's disclosure policy could swear that "x" marks the spot.