XBRL has not really been in the news much lately, but on March 29, 2016 the SEC released a second DERA study about tagging processes. The study, titled “Staff Observations of Custom Axis Tags” is at:
www.sec.gov/structureddata/reportspubs/osd_assessment_custom-axis-tags.html
Here is an excerpt from the introduction of the report:
As part of our ongoing process to monitor registrant compliance with the requirements to report their financial information in their eXtensible Business Reporting Language (XBRL) exhibits, staff in the SEC Division of Economic and Risk Analysis recently assessed certain aspects of the XBRL exhibits that affect the data quality of the disclosures provided. Specifically, the staff examined the use of custom axis tags in XBRL exhibits that reporting companies submitted with their annual reports on Form 10-K. An axis tag in XBRL allows a filer to divide reported elements into different dimensions (e.g., revenue by geographical area, fair value measurement levels, components of total equity (e.g., common, preferred)) while also showing the relationships between separately reported elements.
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The staff’s analysis resulted in a few key observations. First, unlike our previous staff observations that revealed a lower average rate of custom line item tags among large filers, staff observed a higher average use of custom axis tags as filer size increased, with the rate of custom axis tags highest for large accelerated filers. Second, for a random sample of filings that staff reviewed, staff observed instances of filers creating custom axis tags unnecessarily when an appropriate standard axis tag existed in the U.S. GAAP taxonomy.
This is an interesting development, and clearly demonstrates the SEC’s work to help make XBRL information more reliable and useful.
The earlier information the SEC has issued about XBRL include:
A “Dear CFO” letter about calculation structures that is at:
www.sec.gov/divisions/corpfin/guidance/xbrl-calculation-0714.htm
This earlier DERA study of extension use at:
www.sec.gov/dera/reportspubs/assessment-custom-tag-rates-xbrl.html
Getting XBRL Right
Next, here is a good reminder to make sure that your XBRL submissions are prepared properly and tagging is done appropriately. While XBRL is not subject to ICFR and there is no requirement for any sort of auditor review, XBRL submissions are subject to your disclosure controls and procedures. As a result you should have appropriate controls to assure that your XBRL submission:
“is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.”
The above quote is from the definition of Disclosure Controls and Procedures in Exchange Act Rule 13a-15 which is at:
www.ecfr.gov/cgi-bin/text-idx?SID=8e0ed509ccc65e983f9eca72ceb26753&node=17:4.0.1.1.1&rgn=div5#se17.4.240_113a_615
This requirement is highlighted in a recent Form 10-K/A filed by Goldman Sachs to make some corrections in their XBRL submission. Goldman filed their original 10-K on February 19, 2016 and on March 1, 2016 filed a Form 10-K/A. As is required by the Exchange Act Rules for amendments, Goldman included this explanatory note:
EXPLANATORY NOTE
Due to an error by our external financial printer, our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (Original Form 10-K) was filed with an incorrect version of Exhibit 101, which provides items from our Original Form 10-K formatted in eXtensible Business Reporting Language.
This Amendment No. 1 on Form 10-K/A (Amendment) to our Original Form 10-K, filed on February 19, 2016, is being filed in accordance with Rule 12b-15 under the Securities Exchange Act of 1934 for the sole purpose of including the correct version of Exhibit 101.
This Amendment does not amend or otherwise update any other information in the Original Form 10-K and does not reflect events occurring after the date of the Original Form 10-K.
Goldman was perhaps doing something that is appropriate, which we discuss in our workshops. After the filing someone likely double checked the XBRL submission and found the problem, and they fixed it as soon as possible. This is an example of disclosure controls in action on a detective basis, and again, while the SEC has not really indicated that they will do a lot of review of XBRL submissions, we need to make sure they are done appropriately. And, who knows, it is possible the SEC pointed this out to Goldman.
Taxonomy Update
On March 7, 2016 the SEC updated the EDGAR system to accept the 2016 XBRL taxonomies previously released by the FASB. The announcement is at:
www.sec.gov/structureddata/announcement/osd-announcement-030716—xbrl-taxonomy-update.html
Using XBRL Information
While we still don’t hear a lot about users taking advantage of all the information in the XBRL database, user tools are continuing to evolve. One tool that provides a nice way to access and use XBRL data comes from a company called Calcbench. If you do peer group analysis or are searching for comparable disclosures, this is a very useful tool. You can learn more at:
www.calcbench.com
As usual your thoughts and comments, including any insights you have about people using XBRL or XBRL user tools, is welcome!