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XBRL: Get it Right!

January 7, 2011

As companies comply with the Security and Exchange Commission’s (SEC) Interactive Data (XBRL) mandate, they are beginning to learn about the US GAAP Taxonomy (UGT). Every UGT element (or tag) relates to a financial concept reported by SEC filers. But what should filers consider as they select US GAAP Taxonomy (UGT) elements? What UGT element attributes or properties should filers consider as they try to map UGT tags to their data? Should some components of the UGT have a higher priority than others in determining which tag to use? Many companies are grappling with questions like these as they comply with the SEC’s Interactive Data filing mandate.

Each UGT element consists of labels, a financial concept definition, US GAAP references, and several attributes or properties. Certain properties, however, should play a more important role in determining which UGT element to map to reported data. It is helpful to consider what disclosure is being tagged then look to that node (section) of the UGT it is related to. For example, suppose the inventory footnote is being tagged. It is likely that most of the tags needed would reside in the Inventory section (node 340000) of the UGT. Beyond that, it is helpful to consider the following components of the UGT by placing a higher priority on components at the top of the list and a lower priority to those on the bottom of the list. UGT Attribute Priority

  • ATTRIBUTES OR PROPERTIES
    • Period type: Instant, Duration
    • Data type: Monetary, Shares, Per Share, Text, Strin
    • Element definition: Describes the financial concep
    • Authoritative references: US GAAP, SEC Regulations
  • RELATIONSHIPS
    • Relationships: Land + Buildings + Equip = PPE
  • LESS RELEVANT TO ELEMENT SELECTION
    • Element name: Camel Case name is a way of referring to the element and has no bearing on the data being tagged. The HTML is what XBRL renders. Element names (or labels) are intended to be descriptive but are less important than attributes that designate something about the data being tagged
    • Balance type: Debit / Credit

Period Type needs to be considered early in the tag selection process. It would be wrong to tag a balance sheet amount with a duration tag since duration tags represent a period of time. Likewise an income statement amount would never be tagged with an instant tag since instant tags represent a balance at a certain point in time.

Similarly Data Type needs to be considered early in tag selection. The selected tags need to represent the same type of data being disclosed. For example, the number of share outstanding needs an element that is a share type tag. It would be very misleading to tag shares with a monetary type tag.

Element Definition is clearly essential to knowing whether a particular tag adequately describes a disclosure amount. After all, disclosure definitions are integral to “telling the company story”.

Authoritative References can be very helpful in choosing a US GAAP taxonomy element. If the business acquisitions footnote is being tagged and it describes the financial impact of acquisitions that occurred during the period filers should be looking for a tags that reference Statement of Financial Accounting Standard 141.

Relationships can also be helpful in determining which tag to map to financial data. It is helpful to note that raw materials inventory, work in process and finish goods are presented in the same footnote and sum to total for inventory when mapping those facts to the appropriate tag.

The Element Name is purposely descriptive of what the element consists of, but it is less important than other more unforgiving attributes like period type and data type. If filers get the period type and data type wrong it clearly communicates the wrong information about their disclosures. The element name (or label) is more forgiving when period type, data type, definition, authoritative references and relationships are all correct.

The Balance Type is less important in tag selection. This seems counter intuitive, but balance types can be flipped to the opposite balance. Balance types are also likely right if all the other attributes accurately describe the data. While balance types are less important, they should still be considered, especially for amounts that are always expected to be debits (like cash, inventory, and fixed assets) or amounts that are always expected to be credits (like accounts payable, short term borrowings, and revenues). Balance types are much less important for facts that could be a debit or a credit (like net income/loss or cash provided by/used in operating activities) 

The order of preference in which attributes are to be considered is set forth in section 6.6.29 of the Edgar Filer Manual (EFM). It’s helpful to remember what to consider first when selecting an element from the UGT, but priority of considerations is just one part of getting XRL right.  There is a steep learning curve for understanding how to get XBRL right. Are you ready?

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