If the feds have their way -- don't they always? -- analyzing stocks is about to get a lot easier.

Last week, the Securities and Exchange Commission (SEC) introduced a proposed rule that would require the 500 largest public companies to submit quarterly and annual reports in what's called eXtensible Business Reporting Language, or XBRL, by next year. Smaller firms would get more time, but within three years, regulators expect most companies to be providing what the agency calls "interactive data."

I'll understand if you're skeptical. Government programs have a mixed history. But this one looks very promising.

Stock screeners? Who needs 'em?
But that's less to do with the feds than the software. XBRL is, essentially, a collection of codes or "tags" that represent every meaningful metric defined in the U.S. GAAP accounting rules. Thus, any electronic filing properly coded to XBRL would be readable by any software program that understands XBRL.

We already know of at least four. They're here, at the SEC's website for interactive data. My favorite is the Interactive Financial Report viewer. Not only does it present financial statements in a clean format (and with selected footnotes), but you can also export statements to Excel and create custom charts to compare metrics over different time periods.

Other tools allow investors to track executive pay and mutual fund filings. Future viewers could scan for related-party and off-balance-sheet transactions or amendments. You know, "10.X" filings like this one, which describes a licensing deal between CommVault and Dell (NASDAQ:DELL). Yeah, I'd call that reasonably important.

But I'm not complaining about what's not available yet. Noooooooo. I'm simply saying that XBRL has the potential to transform how we research stocks. At the very least, screening would be reduced to pulling information directly from EDGAR, rather than expensive, custom-built databases.

And once you have the data, sorting industry participants by key metrics such as revenue growth, net margin, or free cash flow could become a breeze. (EDGAR Online and RR Donnelley already promise features like this in an XBRL analyzer called I-Metrix.)

What's Buffett buying now?
What I really want, though, is XBRL for Forms 4, 13-D, 13F-HR and 13F-NT. Those are the ones related to insider and institutional transactions, the sort of stuff that informs my weekly study of insider buying.

Can you imagine how cool that would be? A multiyear summary of Berkshire Hathaway's (NYSE:BRK-A) (NYSE:BRK-B) buying and selling on a single page. The very thought must give Mr. Buffett the chills. Me? The thrills.

But it gets better. The SEC already allows any standard RSS reader to track new XBRL filings by company. Here's the link for XM Satellite Radio (NASDAQ:XMSR). Similar feeds are available for NYSE Euronext (NYSE:NYX), General Electric (NYSE:GE), and of course, Microsoft (NASDAQ:MSFT), which has been a surprising ally in pushing XBRL.

Be a Fool for XBRL
I'd love to believe that we no longer need to push this initiative -- the most important since Regulation FD -- but firms are notoriously resistant to change. You can expect that some will put up a fight during the forthcoming comment period.

Mostly, you'll hear claims of government interference, higher costs, and additional staff burdens. My response: Isn't it worth it? Wouldn't it be easier to file in subsequent years after creating the initial XBRL taxonomy? All that's required is a digital file.

And costs? Really? How much does it cost to send out a paper annual report and proxy statement? More than filing in XBRL, I'll bet.

Excuses are excuses, Fool. Don't let the companies in which you invest give you one in an effort to stiff-arm Uncle Sam. Yeah, he's made mistakes before. Former president Ronald Reagan made a good living sticking it to the old man, with quotes like, "The nine most terrifying words in the English language are: 'I'm from the government and I'm here to help.'"

Not this time, sir. This time, the SEC has it right. Uncle Sam is here to help common investors. Please don't get in his way.