2012 US GAAP Taxonomy Approved by the SEC

The 2012 US GAAP Taxonomy (UGT) has now been approved by the SEC. Approved taxonomies are shown on the SEC’s XBRL Website. The SEC staff strongly encourages companies to use the most recent version of the US GAAP taxonomy release for their Interactive Data submissions to take advantage of the most up to date tags related to new accounting standards and other improvements.

The 2012 UGT contains many updates for accounting standards and other improvements to the official Taxonomy previously in use by SEC issuers. Some of the major improvements include:

• Accounting Standards Updates
• Common reporting practices observed in company filings
• Correction of errors and rationalization of duplicated concepts
• Updated modeling of existing taxonomy structures and other architectural changes

The updates to the 2012 UGT were made with the intent of minimizing the impact of changes to instance documents while providing for the necessary accounting updates, common reporting practices, error corrections and rationalizations.

Where elements did not change, the element names are identical to the 2011 UGT names to provide for the greatest level of comparability and to facilitate conversion from the 2011 UGT to the 2012 UGT. However, there are a number of changes to the taxonomy that preparers should be aware of when transitioning to the 2012 update including elements which have been added, changes in element attributes and deprecation of elements from the 2011 UGT. As expected, the 2012 UGT update has a different namespace, which means preparers rolling filings forward to use the 2012 UGT update will have to update those filings for the new namespace.

A complete list of all changes from the 2011 UGT is included in the Appendices of the 2012 UGT Release Notes posted on the FASB website. The Release Notes and other guidance on the FASB Website have been developed to help users transition from the 2011 UGT to the 2012 UGT update. For the convenience of XBRL filinrs, the FASB has developed two taxonomy transition tools:

• A listing of taxonomy changes in a worksheet format
• An Extension Taxonomy Migration Application

Initial Detail Tagging companies should consider filing the first detail tagging using the 2012 UGT to avoid having to migrate the entire filing at a later date. When will you migrate to the 2012 UGT?

XBRL: A Word about Definitions

The Edgar filer manual addresses the priority of element attributes to consider when selecting element to tag to the facts in your SEC filing. However, it is important to note that the element attributes that are less important to element selection are essential for other tagging decisions. For example, the balance type for monetary elements is not important when making element selection and mapping decisions. Conversely, the balance type is essential to consider when deciding the appropriateness of applying negated labels.

According to the SEC’s Edgar Filer Manual (EFM) 6.6.29: “When choosing the most appropriate element for facts in one or more periods, the element’s xbrli:periodType attribute takes precedence over the type attribute, which takes precedence over the element’s documentation string…”. The element’s “definition”, or documentation string as it is more properly called, may be listed third, but it is the single most important attribute for communicating the meaning of the amounts being reported. This thought is validated in EFM 6.6.24 which says “The definition is an element’s most important attribute and must be consistent with the financial concept reported”.

After confirming that an element’s period type (duration versus instant) and type (dollars, shares, per share, etc.) attributes are appropriate to use for a line item of facts, the SEC’s Edgar Filer Manual specifies that decisions on the appropriateness of documentation strings should be based on three factors as follows.

Factor 1

EFM 6.6.24 says “If an element used in numeric facts representing amounts in one or more periods has a definition, then the scope of that definition must include the material amounts reported for that line item in the corresponding official HTML/ASCII document.” Generally, an element “has a definition” if there is text defining the element in the documentation string. The documentation string must do more than “fit” what it is being tagged; it must conceptually include all of the material amounts that the related facts consist of. If any of the facts being tagged includes a single material amount that is not within the scope of the documentation string, then the element does not meet this requirement and should not be used.

Factor 2

According to EFM 6.6.25 “An element must not be used in numeric facts representing amounts of a line item in different periods if it has a definition that explicitly excludes one or more of the material amounts in the corresponding official HTML/ASCII document.” This factor covers the opposite side of the materiality question from EFM 6.6.24 above, so if the documentation string excludes even a single material concept that is within one of the facts within an amount on a line item, the element must not be used.

Factor 3

When there is a choice among different elements that have definitions consistent with a set of facts in one or more periods, use the element with the narrowest definition (EFM 6.6.26). Sometime two elements have documentation strings that could work with a single line item attribute. When this happens the Edgar Filer Manual specifies that the element with the narrowest documentation string is the one that should be used.

Conclusion

When selecting elements to map and tag to your SEC filing, remember to think beyond the element’s label, name and balance type. For better element selections first consider the period type and type attributes then verify that the definition (i) includes all the material amounts, (ii) does not exclude any material amounts and (iii) is the narrowest definition that also meets the two materiality tests.

What processes have you implemented to ensure that these and other XBRL best practices are followed?

XBRL Best Practices Guidance Now Available

XBRL is designed to enable greater transparency, accuracy and timeliness of data as long as it is applied consistently by those who prepare it. One of the major challenges to consistent application of XBRL is the diversity and complexity of US GAAP and the wide variety of ways companies choose to present it. This diversity in traditional financial reporting practices causes different XBRL tagging judgments to be made by professionals who are trying to best communicate that information in XBRL.

In order to promote greater consistency, XBRL US established a Best Practice Committee. The Best Practice Committee meets regularly to discuss a variety sample disclosures and options for how to best tag them in XBRL. Once a consensus is reached, Best Practice Resolutions are written, approved and posted to the XBRL US website. Through this process, the committee achieves its mission of identifying best practices in the creation of XBRL-formatted financial statements and communicated those best practices to the XBRL community.

The resolutions of the Best Practice Committee are available on the XBRL US website Best Practices Committeepage. The site has links to each of the monthly resolutions since 2010, but XBRL US has now made it easier to access all of those resolutions by publishing a summary of XBRL best practice guidance covering all 2010 and 2011 best practices. XBRL US has now published “Best Practice Guidance – Summary of Guidance Issued to Date“. It is also available on the Best Practices Committee page.

When will you employ XBRL best practices?

XBRL: What If…?

I wonder what the future of business and financial reporting might be if XBRL lives up to its potential?
What would XBRL be used for if it was widely accepted as a reporting standard? XBRL is already being used in 10-Qs and 10-Ks as well as certain other SEC filings, but few realize that XBRL is being used by the FDIC to gather information from Bank Call Reports and by the SEC to gather rating agency ratings and mutual fund risk and return information. In other parts of the world XBRL is being used by stock exchanges, taxing authorities, banking systems and governments. In addition to these, efforts are underway to explore XBRL use to track business risk factors as well as environmental sustainability efforts. In addition, the potential for XBRL to achieve the much promised (but little delivered) government transparency is significant. Senator Issa of Hawaii has been a proponent of using an XBRL type approach to make government information readily available to the average taxpayer, thereby increasing governmental transparency.

What if XBRL was deeply integrated into business and financial information systems?

Most companies have address the SEC’s XBRL filing requirements using a compliance based approach. Rather that trying to complete the effort in-house, many have relied on third party vendors to do the heavy lifting on XBRL. The result has been that companies are forced into timelines provided by their partner. The real question has become “Are companies managing their XBRL service provider or is the service provider managing them”?

Imagine a different scenario where companies integrate XBRL into existing systems. The existing consolidation process could generate much of the XBRL required for SEC filings. Additional supplemental information could be generated in a separate system, tagged with XBRL then used in connection with the consolidated XBRL to automate “the last mile of finance”. An Integrated approach like this one could free financial reporting professionals from some of the transactional work involved in filing a 10-Q or 10-K thereby allowing them the time for higher value analytical and advisory work.

What if XBRL creation could be completed with an easy to understand graphical user interface?

XBRL is still a new technology, barely over 10 years old in its development as a global standard. There are many powerful software tools available, but the long awaited easy to us semantic based approach to XBRL generation still escapes the imagination of many software providers. If an innovative software provider were able to take the technical syntax based decisions out of XBRL creation and provide such a tool with an easy to understand graphical user interface, XBRL creation would be a much easier process that many would choose to create internally.

What if traditional Edgarized SEC filings ceased and XBRL were the only filing format required by the SEC?

XBRL filings currently provide all of the same financial statement and footnote information traditional filings provide. In fact, when the SEC mandated XBRL, it insisted that the XBRL format was a change in filing format NOT a change in filing requirements. If XBRL was mandated for entire 10-Q and 10-K filings, traditional Edgarized filings could cease entirely. If XBRL were the only format required by the SEC, would companies finally embrace the idea of bringing XBRL in house? Would XBRL technologies finally be used to rationalize data flow within organizations? A change like this would certainly cause companies to revisit their XBRL creation approaches.

What if XBRL could be easily consumed by software tools that allowed users to pivot data and dive into the deeper details?

If there were software tools available to easily consume XBRL filings via RSS feed or directly from public websites, investors would likely begin to use XBRL data in lieu of more expensive aggregator provided data. If such a tool also provided robust analytical features like pivot tables, sub-totaling, filtering and similar functions investors and analysts would seek the tool and begin to demand easy access to XBRL data. Perhaps this would cause companies to embrace XBRL as a way of sharing information internally and externally.

What else could be done with XBRL? How else might XBRL be generated and used in the future? Please share your thoughts by commenting on this post.

The IFRS Foundation Publishes an Interim 2011 IFRS Taxonomy

On August 22 the IFRS Foundation published an interim release of the 2011 IFRS Taxonomy to address Presentation of Items of Other Comprehensive Income (IAS 1 amendments) and Employee Benefits (IAS 19).

The 2011 IFRS Taxonomy is based on IFRS as issued at January 1, 2011. The interim release of the IFRS Taxonomy contains additional taxonomy concepts that reflect new IFRS standards and improvements to existing IFRS standards published by the IASB. The interim taxonomy release gives companies the opportunity to report XBRL financial concepts using the latest IFRS standards without creating custom taxonomy elements.

The interim release of the 2011 IFRS Taxonomy follows the taxonomy architecture in The IFRS Taxonomy 2011 Guide and The Global Filing Manual.

The Power of XBRL Demonstrated

After over ten years of development, the power of XBRL is being demonstrated in some interesting and compelling ways. It is being put to practical use in a number of countries and XBRL implementations in increasing numbers. In the process XBRL is proving its benefits in increasing the efficiency, the speed, the accuracy and the transparency of financial reporting. In this article several tools that demonstrate the power and utility of XBRL are described (hyperlinks included). If you know of other helpful tools, please share them by commenting on this post.

XBRL Data in Use

A recent demonstration of XBRL is on the XBRL US Website at http://xbrl.us/research/Pages/data.htm. The tool allows users to see a graphical display of selected XBRL data broken down by year, by quarter, by selected financial concepts and by selected industry.

Brix iPhone App

XBRL US has another free tool that is available to iPhone users. The XBRL iPhone App, called “Brix” or “The Brix Project”, allows users to browse XBRL filings on an iPhone. Filings on the Brix App can be browsed by company or by taxonomy element. The tool also shows the most recent XBRL filings and tracks the total number of companies that file XBRL reports with the SEC as well as the total number of XBRL reports filed to date. The iPhone Brix App can be found at on the XBRL US website at http://xbrl.us/research/Pages/iphone.aspx.

Sample XBRL Data Issues

XBRL US has yet a third tool to inform XBRL users about the most common XBRL error types. The foundation of this site is the XBRL US Consistency Suite which is being used to test the validity and consistency of filings and saving the filing results in an XBRL database. The sample of common XBRL data issues is listed at http://www.xbrl.us/research/Pages/CSuiteSample.aspx. In addition, a count of the number of errors by type is shown on the lower right of the Consistency Suite page at http://xbrl.us/research/pages/Csuite.aspx.

The SEC’s Financial Explorer

Another interesting tool is the SEC’s Financial Explorer (http://209.234.225.154/viewer/home/). The Financial Explorer graphically represents XBRL filing data in a way that non-financial users may find beneficial.

Prime Aim

Prime Aim offers a user friendly XBRL query tool to enable the public to search XBRL filings. The tool is found at http://primeaim.com/ and offers assistance in helping users learn how to use the site. There are Advanced and Browse options as well as a help page and “how to” page.

Reporting Standard Query

Reporting standard has a tool that allows users to write their own queries of XBRL SEC filings. Filings that match the query criteria ar accessable from the query tool which can be found here: http://www.xbrl4.org/regulators/ExploreXBRL.html

XBRL Calculation Issues

XBRL Site, a Chalie Hoffman creation, offers a listing of possible XBRL calculation issues by filing company. The site allows links to the specific calculations that it highlights. Users should be aware that there are occasions when XBRL calculations may not work for valid reasons (like the total being a rounded amount as opposed to an exact amount). The list of possible calculation errors can be found at http://www.xbrlsite.com/demos/Analysis/2009-11-15/Viewer/Other/CalculationIssues.html.

Financial Filing Glossary and Logical Model

Another Charlie Hoffman site summerizes the SEC’s XBRL Logical Model and Provides a Glossary of SEC Filer XBRL terms. There are links throughout the site to take filers to the details of each topic covered. The site may be found at http://secxbrlglossary.wikispaces.com/.

XBRL Cloud

XBRL Cloud analyzes SEC filings and highlights the number of validation errors, warnings, and best practices. I was previously under the impression that XBRL Cloud used its own validation criteria, but thanks to direct contact with XBRL Cloud, I am happy to say that XBRL Cloud goes to great lengths to present findings based on publicly published documents such as the SEC’s EDGAR Filing Manual, and the US GAAP Architecture. Because the validation techniques are based in open and widely recognized standards, companies that have good report on XBRL Cloud can have confidence that their XBRL filings meet required standards. The beauty of XBRL Cloud is that companies, investors and other interested users see a “report card” on how companies are doing with their XBRL SEC filings. The site can be found at http://edgardashboard.xbrlcloud.com/.

Other XBRL Tools

There are other interesting XBRL tools available as well, including a Firefox XBRL add-on (https://addons.mozilla.org/en-US/firefox/addon/xbrl-addon/) that allows users to pivot XBRL data, multiple XBRL taxonomy viewers (http://viewer.xbrl.us/yeti2/resources/yeti-gwt/Yeti.jsp, http://bigfoot.corefiling.com/yeti/resources/yeti-gwt/Yeti.jsp, http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176157088011, http://www.compsciresources.com/ – lower right side of page). Even Microsoft Office contains capabilities to help XBRL users access XBRL tagged data.

 The number of available XBRL tools will continue to grow as XBRL use expands around the globe. Already XBRL is being used in SEC filings and Bank FDIC Call Reports in the US, Tax Returns in the United Kingdom, a securities filings in China, stock exchange listings in Tokyo and more. XBRL use will not be limited to financial reporting. Projects are underway to apply XBRL to environmental and sustainability efforts, risk management projects and governmental transparency efforts. To see what’s going on in the world of XBRL see XBRL Planet at http://www.xbrlplanet.org/index.php.

I am sure there are other XBRL tools as well. If you know of other helpful XBRL tools that demonstrate the power of XBRL please share them by adding a comment to this post.

What’s in a Dash? – Getting XBRL Right

Financial Statements typically consist of line item descriptions and amounts for each period presented, but in some periods a dash is shown rather than a specific amount. What does a dash mean and can it be tagged with an XBRL taxonomy element? If so, how should the dash be tagged?

Before determining how to tag a dash, it is important to think about the role of  line item tags within the US GAAP Taxonomy. When a concept is tagged, all of the line item facts for that concept (i.e. in that line item or row) are tagged with the same element no matter what calendar they are in (i.e. what point in time or period of time the facts relate to). Since all of the amounts in that row or line are tagged with the same element, then any dash in that row is associated with the element as well. However, the dash is unique and needs additional consideration.

Companies may use a dash to represent different concepts. Most often it is thought to represent an insignificant undisclosed amount. Other times the dash may represent zero. It is essential to understand what the dash actually means before deciding how to tag it. If the dash actually represents a zero, then it can be tagged as a zero in the same way any other amount is tagged. If the dash represents an insignificant or immaterial undisclosed amount, then it needs a nil=true attribute. By assigning the nil=true to the period that contains the dash, the amount is understood to be “null” or “nil” (empty – not zero). The calendar with the nil=true attribute renders as a blank or empty field in the SEC’s viewer.

When the dash actually represents a zero, then a zero is tagged (not a dash) and the nil=true attribute does not apply. In this case, the amount is a zero and renders as a zero for the period that contains a dash in the traditional filing.

Planning an Orderly Transition to the 2011 US GAAP Taxonomy

What taxonomy should SEC filers be using this year? A new US GAAP Taxonomy was approved by the SEC on February 28, 2011, but when are filers to adopt it and what must be done to ensure an orderly transition?

US GAAP Taxonomies were developed and maintained by XBRL US until early 2010. In February 2010, the Financial Accounting Foundation and the Financial Accounting Standards Board (together the “FASB”) assumed responsibility for maintaining and updating the US GAAP Taxonomy (“UGT”). Typically, a new UGT is released once each year. However, with the ownership of the UGT transitioning from XBRL US to the FASB, a 2010 US GAAP Taxonomy was not released. Since assuming responsibility for the UGT, the FASB has made significant improvements in the taxonomy. The improvements include:

• Updates for the accounting standards that have been issued since the 2009 UGT was published
• Expanded disclosure for previous omissions, including common reporting practices observed in XBRL filings over the last couple of years
• Correction of errors and rationalization of duplicated concepts
• Updated architectural modeling of existing taxonomy structures (dimensional tables for example).

Modifications to the US GAAP Taxonomy were made with the intent of minimizing the impact to the instance documents of filers who have used the 2009 UGT while also making the necessary changes to improve the UGT. A new element label type has been added, the New Concept label type, to indicate where new taxonomy elements have been added. The new taxonomy elements have a New Concept label of “2011 New Element”.

Summary of Changes to the UGT

Many changes were made to US GAAP during the last two years. Naturally, changes in US GAAP since the 2009 taxonomy was released have been incorporated into the new taxonomy. Where there was not a significant change in the context of an element, the element name remains the same to facilitate migration to the 2011 UGT. For elements with significant definitional changes, new UGT elements replaced the old UGT elements or new elements were added to provide alternative elements for filers to use. Where UGT elements have been replaced, the old UGT elements have been deprecated (a way of retiring the element from use but retaining it’s history in the UGT). In addition, several new presentation groups have been added to the UGT including:

• 124200 – Statement of Income, Additional Statement of Income Elements
• 152201 – Statement of Cash Flows, Additional Cash Flow Elements
• 152205 – Statement of Cash Flows, Supplemental Disclosures
• 985000 – Other Industries
• 195000 – Comprehensive Text Block List

One of the more notable changes in the 2011 UGT is the Comprehensive Text Block List (Presentation Group 195000). In the previous taxonomy text block elements for XBRL mappings at level 1 (footnote text blocks), level 2 (significant accounting policy text blocks) and level 3 (table text blocks) were labeled in the same way. In general, they all had a suffix of “[Text Block]”. In the new UGT level 1 text block elements have the suffix “[Text Block]”, level 2 text block elements have the suffix “[Policy Text Block]” and level 3 text block elements have the suffix “[Table Text Block]”. Additionally, presentation groups 795000–Statement of Cash Flows Supplemental Disclosures and 993550–Form SH Investments Sold Not yet Purchased have been removed from the 2011 UGT.

Many dimensional elements (e.g. Axes, Domains and Members) within the 2011 UGT have been remodeled and rationalized to more accurately represent the dimensional structure of US GAAP disclosures in the financial statements and footnotes of SEC registrants. Also duplicate and redundant dimensions have been rationalized and new dimensions added to provide better extension taxonomy modeling.

Removal of Non-GAAP Elements

The 2009 UGT consisted of US GAAP elements and non-GAAP elements. Examples of Non-GAAP elements that were previously included in the taxonomy include SIC elements, entity elements and document information elements. The following non-GAAP groups have been removed from the 2011 UGT:

• 994400 – Document – SEC Certification
• 994600 – Document – Management Report
• 994800 – Document – Management Discussion and Analysis
• 995000 – Document – Accountants Report
• 995200 – Document – Document Information
• 995400 – Document – Entity Information
• 995410 – Document – Country Code
• 995420 – Document – State or Province
• 995430 – Document – Currency
• 995440 – Document – Exchange
• 995450 – Document – SIC
• 995460 – Document – NAICS
• 995470 – Document – Investment

Maintaining non-GAAP taxonomy groups will now be the responsibility of the SEC. Non-GAAP taxonomy elements will be maintained and available for use on the SEC’s website. To use both US GAAP and non-GAAP taxonomy components, filers will need to import each taxonomy group into their XBRL software tools. Both US GAAP and non-GAAP taxonomies are available on the SEC’s website at http://www.sec.gov/info/edgar/edgartaxonomies.shtml.

When Are Companies to Adopt the New UGT and What Factors Should Be Considered?

The SEC strongly encourages companies to migrate to the 2011 Taxonomy. The new Taxonomy is a significant improvement over the 2009 Taxonomy. Things to consider when migrating from the 2009 UGT to the 2011 UGT include:

• Companies should make an orderly transition from the 2009 Taxonomy to the 2011 Taxonomy
• Companies who have already mapped their data to the 2009 Taxonomy are permitted to continue using the 2009 Taxonomy for their filings
• The SEC will remove the 2009 Taxonomy from the approved taxonomy list at some point, but filers will have plenty of notice before they do.
• It is likely that filers who migrate to the new taxonomy will be able to reduce the number of extension they use in their taxonomies.

Some filers may believe that that they must begin using the new Taxonomy for periods ended after July 15, 2011. That language was included on the SEC’s XBRL Taxonomy Website, but it has been removed. As of March 30, 2011 the SEC’s website contains the following instructions about the 2011 US GAAP taxonomy:

“The SEC staff strongly encourages companies to use the most recent version of the US GAAP taxonomy release for their Interactive Data submissions to take advantage of the most up to date tags related to new accounting standards and other improvements. However, due to the timing of the release of the US GAAP 2011 taxonomy in conjunction with the phase-in of the Rule, companies will be permitted to continue to use the US GAAP 2009 taxonomy.”

Conclusion

Many positive improvements are included in the 2011 US GAAP taxonomy. New accounting standards have been incorporated, disclosures have been improved, errors and duplications have been rationalized and the dimensional structure of the taxonomy has been enhanced. Companies should begin planning and implementing an orderly migration to the 2011 UGT to take advantage of its superior ability to eliminate taxonomy extensions, improve extension taxonomy structures and normalize comparability of new US GAAP disclosures.

The XBRL Taxonomy Gap: Foreign Private Issuers using IFRS

Are you a Foreign Private Issuer using IFRS as issued by the IASB? If so, then you will implement XBRL in 2011 right? Not so fast…

Over the last two years the larger SEC filers have implemented XBRL into their quarterly SEC reporting process. In 2011 Tier 1 companies (Note 1) will lose the XBRL liability limitation that existed during implementation. 2011 will also see Tier 2 companies (Note 1) implement detail footnote tagging and Tier 3 companies (Note 1) implement XBRL for the first time.

One big open item in the 2011 XBRL agenda is the IFRS Taxonomy. The SEC’s XBRL rule requires all foreign private issuers that prepare their financial statements in accordance with IFRS as issued by the IASB to file the XBRL exhibit to their SEC filings beginning with quarters ended after June 15, 2011. To do so, these filers would be required to use a taxonomy that is approved by the SEC (approved taxonomies are listed on the SEC’s website). The problem is that there is not an approved IFRS taxonomy listed on the SEC’s website.

The bottom line for foreign private issuers that prepare their financial statements in accordance with IFRS as issued by the IASB is that they will be required to file XBRL as part of their 20-F or 40-F filings, however they will be unable to file XBRL because there is not an approved IFRS taxonomy. An investigation of this issue with the SEC confirmed this understanding as true. There is a 2011 IFRS taxonomy that is exposed for comment until March 18, 2011. Hopefully the SEC will consider approving the new 2011 IFRS Taxonomy or will issue additional guidance clarifying expectations for foreign private issuers that prepare their financial statements in accordance with IFRS as issued by the IASB.

Stay tuned for further developments.

 

Note 1: Tier 1 companies are domestic and foreign large accelerated filers that use U.S. GAAP and have a worldwide public common equity float above $5 billion, Tier 2 companies are all other domestic and foreign large accelerated filers using U.S. GAAP and Tier 3 companies are all remaining filers using U.S. GAAP, including smaller reporting companies, and all foreign private issuers that prepare their financial statements in accordance with IFRS as issued by the IASB.

Negated Labels: Getting XBRL Right

According to XBRL US, of the 41,000 plus errors and inconsistencies in XBRL filings to date, over 24,000 were related to negative values being reported when a positive value is expected and positive values being reported when a negative value is expected. Many of these errors are likely due to a lack of understanding about the proper use of “Negated Labels”. Do you understand Negated Labels well enough to keep your filings off the error list?

Use of negated labels for monetary US GAAP elements (commonly called “tags”) can be challenging. Negated labels are used to “flip” the sign of a rendered amount. By incorrectly using negated labels to flip the sign of an amount that was tagged backwards, some filers have made renderings look correct when the underlying values are actually backwards. Thinking about when to use a negated label can be facilitated by thinking about monetary tags as either “one way” monetary tags or “two way” monetary tags.

One way monetary tags are almost always expected to be either a debit or a credit. Examples of one way monetary tags include Goodwill, Other Short Term Borrowings, Sales Revenue, and Cost of Goods Sold. US GAAP Tags like these are almost always expected to have either a debit or a credit balance. Amounts reported as positive numbers and tagged with one way tags will be correctly tagged the vast majority of the time. As expected, one way tags are typically presented as positive numbers in HTML financial statements and render as positive numbers in XBRL renderings. Negated labels are generally not need for one way tags.

Two way tags are more challenging. Two way tags could be properly debits or properly credits depending on a filer’s financial situation. Some examples of two way tags include Net Income (Loss), Increase (Decrease) in Accounts Receivable, and Net Cash Provided By (Used In) Financing Activities. Filers need to think carefully about the balance that is tagged and the balance type of the tag it is tagged with. After making sure that the tagged value is tagged in the right direction, filers can then consider how they want the rendering to look and whether a negated label is desirable.

Where amounts are reported as negative numbers in HTML versions of filings, it may be necessary to reverse the sign of the amount and negate its label for rendering – especially when the related tag is a one way tag. For example, treasury stock is typically reported as a negative number on the HTML balance sheet and it is normally tagged with a US GAAP Taxonomy tag named “TreasuryStockValue”, which has a debit balance type. If an amount is reported as a negative number on the HTML financial statements, it will be imported into most XBRL software tools as a negative number. If left alone, it will be reported in the instance document as a negative debit which is in fact a credit. A credit is not correct for Treasury Stock, so the reverse sign attribute would need to be applied to the Treasury Stock line item. By doing so, the negative HTML Treasury Stock amount which was imported as a negative value will be changed to a positive value making it a positive debit which is correct. Treasury Stock is now a positive number mapped to a one way tag with a debit balance type, it will therefore render as a positive number. Since Treasury Stock was reported as a negative number in the HTML financials it may be desirable to have it render as a negative value. In order to get the amount to show as a negative number in the rendering while keeping its now correct debit balance, a “negated” label is used to flip the view of the rendering to negative.

Based on the discussion above, it is easy to understand why actual instance document values, the balance type of tags they are mapped to and how they should be rendered must be carefully considered to make sure that amounts are not reported backwards. By remembering the factors described above, SEC Filers may get their XBRL right and keep their filings off the erroneous filings list.

What are you doing with XBRL?