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Negated Labels: Getting XBRL Right

February 12, 2011

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?

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