XBRL Public Education Seminar
Tuesday, March 23, 2010, 1:00 - 4:00 pm, Eastern Time
Panel Discussion Among Joel Levine, Tony Mealey and Susan Yount (With Slide References)
1. We'll start off with a few observations on rendering. Rendering refers to how the Exhibit 101 interactive data looks when using the agency's interactive data viewer. Tony, are there some overall observations on rendering that the filers should be aware of?
Yes, the overall observation is that the interactive data financial statements will not appear identical to the traditional or HTML format financial statements. This includes the balance sheet, where for example indenting and underlining may not be the same, as well as Level IV tabular information, which may appear with axes reversed and there could be blank cells in a Level IV table when there were none in the traditional format financial statements. Also a reminder to include the parenthetical data in the label of the element and do not neglect to tag the parenthetical data. For example for preferred stock the label on the balance sheet should include information about authorized and issued shares and the parenthetical data would be tagged and presented directly after the balance sheet in accordance with the Edgar Filer Manual.
2. The tagged information appears in our viewer in a particular order that is described in the Edgar Filer Manual. Tony, can you explain what the Edgar Filer Manual requires?
The Edgar Filer Manual requires the information in the Exhibit 101 to be presented by Level. All Level 1 tagging will be first, followed by Levels II, III and IV in that order. For example a filer will present the financial statements first and in the same order as in the traditional format financial statements with of course any parenthetical data added directly after the relevant statement. This will be followed by the footnotes tagged at Level 1. Then the significant accounting policies, followed by the tables in the notes and finally the notes tagged in detail.
3. You have described what order the statements will be in. Are there any naming conventions for the presentation groupings?
The conventions for presentation group labeling are in FAQ 41. Level I Footnote labels should be the same as those in the traditional format financial statements. For example the slide shows an example from a quarterly filing, note that each of the names of the statements and the notes should conform to the titles of the notes in the traditional format financial statements. The only addition that would be made is to the Condensed Consolidated Balance Sheet (Parenthetical) which is presented directly after the balance sheet.
4. What about naming conventions for Levels II, III and IV?
The naming convention at Level II (which refers to tagging each significant accounting policy) is that the title should be consistent with the title used in the traditional format financial statements, plus a parenthetical (Policies). We can see this demonstrated on the slide. We also note that all of the significant accounting policies, while each one is required to be tagged separately, will be presented in one presentation group.
With regard to Level III tagging, which refers to tagging each table within each footnote, the naming convention adds a (Table) to the title from the traditional format financial statements. As we can see demonstrated on the slide, while each table is required to have a separate text-block tag, all tables appearing within the same note will be in the same presentation group, and there will be a separate presentation group for each note.
With regard to Level IV tagging; which refers to separately tagging each amount in the footnotes, filers have a choice of including all the tagged data of a footnote within one presentation group, or they could use multiple presentation groups.
Here is a summary of the Presentation groups for each level. Note that the Level I material is presented first, with the addition of the parenthetical data on the balance sheet; followed by the Level II tagging of the significant accounting policies; followed by the Level III tagging of the tables in the notes; followed by the tagged data at Level IV.
5. Tony, Can you give us an example of a rendering difference, the staff has noticed, that filers should be able to avoid?
Labels used in tagging line items on the face of the financial statements should conform to the line item descriptions appearing in the traditional format financial statements. This includes parenthetical amounts; for examples allowances on the receivable line or preferred shares issued and authorized. In addition, filers should not neglect to tag the parenthetical data as part of level I.
6. Can you mention some rendering differences that a filer may not be able to avoid?
There is quite a list of differences that filers may not be able to avoid and again I draw attention to (see C&DI 130.08). There is no requirement that the Interactive data appear identical to the traditional format financial statements.
Filers will have only limited control over:
Indenting, fonts, underlining, subheadings.
Blank captions for totals that appear in the traditional format financial statements, where filers do not use a Current Assets label or a Total Assets label but instead leave the space blank. This presentation is not possible with the current rendering tool, but the standard element label will render on that line.
Stockholders equity: Brackets, Column subtotals, and Ordering of columns and rows, reversing the axes.
As we'll see later in the presentation, detail tagging at level IV often will render quite differently than the traditional format financial statements.
These are the main areas where rendered documents may not be able to conform exactly to the traditional format financial statements.
7. A filer's balance sheet shows a line item for Commitments and Contingencies, and nothing appears under the columns. How should a filer tag this?
Set the NIL attribute to True and don't tag the element with any information. This applies whether the columns in the traditional format balance sheet appear with dashes or are just blank. The result of setting the NIL attribute to True will be blank fields under both columns in the SEC viewer. This is the guidance described under Edgar Filer Manual Section 6.6.15.
8. Okay, that guidance is specifically for the Commitments and Contingencies line item. But, a filer's financial statements may have other line items for which one or more columns are blank or have a dash "-." How should a filer tag that?
A filer may simply not tag the element for line items appearing as an empty field or a dash. For example, if "Notes Receivable" appears on the balance sheet with a $1,000 balance this year-end and a dash last year-end, the filer can simply not tag the "Notes Receivable" element for last year's balance. Taking this action will render an empty field by our rendering engine for last year's balance. Our rendering engine will not currently render dashes "-."
Please note that if a filer wants to tag one or more line items that appear as an empty field or a dash with a zero value because that's what management believes the item represents, and they think the distinction is useful, they can choose to do so. This guidance applies to all the financial statements, including the statement of shareholder's equity, the financial statement schedules, as well as to footnote data tagged at Level IV.
9. Just one more nuance before we leave this topic. A filer may have a line item, such as preferred stock, where both columns on the balance sheet are blank or have dashes. This could be the case when there are authorized shares, but none are issued. Can a filer set the NIL attribute to True without tagging any information similar to the Commitments and Contingencies line item?
Yes, and that action will result in blank fields in both columns. However, like I described in the last answer, the filer can tag the element with zeros instead if they believe the distinction is useful.
10. Let's move on to talk about element selection. Susan, can you tell us how to find the U.S. GAAP taxonomy and show the type of information it includes about the standard elements?
(Slides 14 and 15)
Filers can find the 2009 U.S. GAAP taxonomy by going to our portal website at xbrl.sec.gov, and clicking on the taxonomies link. When you open the taxonomy, it will launch a viewer and show you the taxonomy elements. We're looking here at a screen shot of the viewer, and you can see on the left side a list of the elements.
On the right side, you'll see that if you select an element, and here we're looking at "Net Inventory," the taxonomy contains quite a bit of information about that element. Starting from the top, we have a label, and below that a definition. Now this element doesn't happen to be associated with any authoritative references, but if it did, you'd see that in the reference section. Below that, we see a section called "Properties," which lists a number of attributes that are associated with the element. In a minute we're going to talk about what you'll be doing with all of these elements and attributes, but you should understand how the taxonomy is presented before we get started.
11. Can you show us how one would search the taxonomy for an element?
(Slides 16 and 17)
Let's look at how you would find elements in the taxonomy. The taxonomy viewer has a search function, and if you're using a software tool, that probably has a search function as well, so that's a good place to start. The taxonomy search function has some limitations: it doesn't handle misspelled words very well, and it may not be as helpful for financial concepts that might be presented with various names. For example, you might have a line item on your balance sheet for short-term debt outstanding, but the taxonomy element for that might be labeled, "short-term borrowings," so the search function might not be as useful in that case. So what other options do you have? Browsing through the taxonomy can be helpful, especially when your search results don't seem quite right.
We're looking here again at the taxonomy, which has sections at the top for financial statements and then "Disclosure" sections below the financial statements. The disclosure sections are primarily used for footnote tagging, although you might find line-item details you need for your financial statement disclosures in these sections. You'll want to be familiar with the general topics covered in these sections.
Let's look at an example of how you would use browsing to find an element. Say a filer is mapping a fair value table, and they're mapping the amounts for the fair value measurement hierarchy, and specifically looking for elements for the fair value Levels 1, 2 and 3 inputs. If you search in the taxonomy for "Level 1," the first search results you get are actually in the pension disclosures; and if you weren't familiar with the disclosure categories, you might stop there and say that there isn't a level 1 element for fair value disclosures.
But if you went back and searched by browsing through the disclosure categories, you would find a disclosure category for "fair value;" and if you expand that category, which we've done here, you'll find your fair value disclosure elements.
So, a good rule of thumb is that if you think what you're looking for is a common disclosure, it's probably in the taxonomy somewhere. Keep in mind that you may need to use a couple of different search techniques to find your appropriate element.
12. If a filer goes to our website and links to the U.S. GAAP Taxonomy, they'll see what appears to be a listing of several U.S. GAAP taxonomies, including commercial and industrial, banking and savings institutions, insurance, and real estate. Susan, how does a filer decide which one to use?
There's been some misunderstanding that the entry points are actually separate taxonomies, which is understandable because they're labeled "taxonomies."
The U.S. GAAP taxonomy was designed with a number of what are called "entry points", which are actually just subsets of the taxonomy. They're designed to help filers, by showing them only those elements that they're most likely to use to tag their financial statements. Some filers have been under the mistaken impression that they can only use the elements in the entry point that most closely matches their primary business. Whereas in fact they may need to use an element in a disclosure that relates to a different entry point, if some part of their business is in that entry point or they have some transaction that's typically found in that entry point.
So to be clear, filers are not limited to a particular entry point, and the entire U.S. GAAP taxonomy is available for filers to use.
13. There are over 15,000 standard elements in the U.S. GAAP Taxonomy. Rule 405 of Regulation S-T requires filers to select an appropriate element from the taxonomy. Tony, how should filers go about deciding which element to select?
(Slides 19 and 20)
The Edgar Filer manual in section 6.6.29 outlines an approach to be followed when deciding which standard element, among multiple elements is the most appropriate for your particular circumstance. The approach refers the filer to five different pieces of information included in the taxonomy for each element. This information appeared on the right side of the taxonomy viewer that Susan showed us a moment ago. The filer would need to consider these five pieces of information sequentially. So, say a filer has searched the taxonomy and has found more than one element that might be appropriate; that filer will need to carefully consider the following information about each element in making a decision as to which one to select:
- Period type,
- Item Type,
- Label, and
When selecting between elements, these pieces of information should be considered in this order.
14. So the "period type" is an important attribute for an element. Is it normally pretty easy to identify the appropriate "period type?"
Period type is the first of the filters that should be used to choose between elements and yes it is typically pretty easy to determine period type. There are two period types — Instant (which means the fact relates to a specific point in time), and Duration (which is used in all other cases). An example of Instant is accounts receivables or cash — we know these are balance sheet items and will always be instant item types. Duration item types will include facts that cover a period of time, such as income statement items, as well as all block-text and string type elements, which I'll discuss in a moment. While period type is the first filter in element selection, it is usually clear which elements have the period type necessary to match the original fact to be tagged.
15. Okay. What can you tell us about the importance of "Item type?"
There are various element "item types" included in the taxonomy. They include monetary, percent, integer, shares, per share, text-block and string. Examples of each of these would be:
Monetary — The "Receivables" balance on the balance sheet for Level I or, at Level IV, the "Gross Buildings" balance in the Property, Plant and Equipment Footnote.
Percent — You would typically see this at Level IV tagging where there would be disclosure of interest rates in the Long Term debt footnote, for example.
Integer — These items typically are used at Level IV and would include disclosure such as the number of court cases or number of customers.
Shares — This is used to tag the number of shares, such as for weighted average number of shares outstanding.
Per share — These are items such as Earnings per share amounts.
Text block — Text blocks are used to tag complete footnotes at Level I, significant accounting policies at Level II, and Tables in the footnotes at Level III.
String — These are used to tag optional text at Level IV.
16. So, if a filer wants to block tag an entire footnote, what "item type" attribute should the element have?
That is a great point to clarify. Filers should only use Text Block elements for tagging at Level I footnotes, Level II accounting policies and Level III tables. String elements should not be used to tag at these Levels. Therefore, when deciding on the narrowest element, filers have to consider just text-block elements.
17. Tony, can you explain how filers should consider an element's definition in deciding which element to select?
When making an element selection, the filer generally will devote significant attention to the elements' definitions. One thing that's helpful to remember is that no two elements in the taxonomy are exactly the same — each one is unique. An important purpose of including definitions with elements in the taxonomy is to distinguish one element from another. Depending on the particular disclosure area, therefore, some definitions may be brief, or general, while others may be long or very specific.
There are three Edgar Filer Manual rules filers should follow with regard to element selection that include the consideration of definitions. Let me summarize these:
The definition of the standard element must capture all concepts in the line item or disclosure the filer wants to tag,
The definition of the standard element must not exclude any of the concepts in the line item or disclosure the filer wants to tag, and,
In the case where there is more than one element being considered, the element with the narrowest definition should be selected.
Let's use three examples to demonstrate these concepts. The first rule is that the definition of the standard element must capture all concepts in the line item or disclosure the filer wants to tag. For example where a filer has a line item, "Research, Development and Engineering Expenses" in the traditional format financial statements, it would not be appropriate to use the standard tag that only included research and development expense because the engineering expenses were not included in the definition.
The second rule that the definition must not exclude any of the concepts in the line item or disclosure the filer wants to tag can be illustrated using Goodwill and Intangible Assets. Let's say the filer wants to tag the line item, "Goodwill and Intangible Assets" on its balance sheet using the standard element, "Indefinite Lived Intangible Assets [Excluding Goodwill]." This element would not be appropriate since its definition excludes goodwill.
The third rule, to use the standard element with the narrowest definition, can be illustrated by the following example. In the Statement of Cash Flows, the filer reports the payment for common stock repurchases. Instead of selecting the standard element, "Payments for the Repurchase of Equity," the filer should select the element, "Payment for Repurchase of Common Stock" because it has a narrower definition. I might also point out that even if the line item label in the traditional format financial statements reads "Payment for the Repurchase of Equity," if the transaction represents the payment for repurchasing only common stock, then that is the concept that needs to match the element selected.
18. Tony, that's a good example. Let's talk thru some more examples of applying these rules: Say that "Depreciation" is the line item in the filer's traditional format financial statements, and a search of the US GAAP taxonomy reveals the element, "Depreciation, Depletion and Amortization." Would this be an appropriate element for tagging the "Depreciation" line item?
Well, let's use the first two rules above. The two rules are that the Definition must capture all concepts in the line item, and the Definition must not exclude any of the concepts in the line item. Does the standard element "Depreciation, Depletion and Amortization" include all concepts in the line item? — Yes, it includes depreciation. And, it does exclude any concepts in the line item? — No. So, it would be appropriate to use that element to tag the line item, "Depreciation." And in this case, the standard element label would need to be changed to "Depreciation."
However, I'll take this opportunity to bring up an important point in tag selection when the element you're considering is a "combination element" such as "Depreciation, Depletion and Amortization." In other words, the element is a combination of two or more concepts. If the filer has different line items in its financial statements to report those concepts separately, say one line item for Depreciation and another line item for Amortization, then the filer would need to create a custom element for each of the line items and not use the combination element at all. So, this filer would need to create one custom element for Depreciation and another for Amortization. This situation can arise when selecting elements for tagging at level I, II, III, or IV. I'll mention an example we've come across on more than one occasion, which is block tagging a footnote that consists solely of a discussion of the filer's Organization, while there's another footnote that discusses the filer's Basis of Financial Statement Presentation. There's a standard element in the taxonomy, which is another "combination element," called, "Organization, Consolidation, and Presentation of Financial Statements." Instead of using this standard element, the filer needs to find a standard element just for Organization and another one just for Presentation of Financial Statements, or, if there aren't such standard elements, then the filer would need to create two custom elements. Finally, if instead, the filer has just a single footnote for "Organization and Basis of Presentation" then the standard combination element would seem fine as it meets each of these 3 rules I've been talking about.
19. Tony, that's interesting. So, if most of the work in the element selection process is evaluating the definition of elements, why are the standard label and references important?
(Slides 25 and 26)
Joel, the standard label is part of the element identification, and it is typically the information that we search on to initially identify possible elements. In many cases, the filer may not need to go beyond the element's Definition, except just to see that the label is consistent with the definition. However, if the filer is still trying to distinguish among two or more elements, then the references might help.
Let me expand a moment on references. In some cases, the references will be to a general disclosure requirement in the authoritative literature, and in this case, they may not be very helpful in distinguishing among elements. In other cases, the references might be to very detailed and specific disclosure requirements — and along with the definition, that information could be useful to distinguish one element from another.
20. Tony, what are the sorts of issues the staff has noticed during its reviews with respect to element selection?
Joel, there are four major error types, which are easily demonstrated by these examples:
The filer selected a standard element when it appears that a standard element with a narrower definition exists. An example of this could be the use of the element, "Additional Paid-in Capital." If a filer's reporting concept consists only of additional paid-in capital attributable to common stock, then the element, "Additional Paid-in Capital Common Stock" would have been more appropriate since it's narrower than the "Additional Paid-in Capital" element, as that element applies to various classes of equity securities.
The filer selected a standard element when a standard element with a broader definition appears more appropriate. For example, the standard element, "Long-Term Debt" was used as a text-block for a footnote that includes information about long-term debt and short-term credit agreements. The standard text-block element, "Debt Disclosure" has a broader definition that captures both long-term and short-term credit agreements, and, therefore, it would have been more appropriate.
The filer created a custom element when it appears an appropriate standard element exists. An example of this would be the custom element, "Salaries, Wages and Benefits" used for an income statement line item, when the standard element, "Labor and Related Expense" seems appropriate and should have been used.
The filer selected a standard element when it appears a custom element should have been created. For example, the filer used the standard element, "Prepaid Expenses" for the balance sheet line item that had the label, "Prepaid Expenses and Other Current Assets." In this case, a custom element that combines prepaid expenses and other current assets may be more appropriate.
21. So, you go through this process and don't find an element that's appropriate for your particular disclosure. Susan, how would a filer create their own custom element?
(Slides 28, 29, and 30)
Let's go back and take a quick look at the information that Tony has been discussing.
Standard elements are associated with period types, item types, definitions, labels, and references. When filers create a custom element, they'll specify most of this information for that element.
Now let's look at an example, and we'll set up a custom element for the income statement line item, "Interest and Other Income, Net of Other Expenses."
Period type — You'll need to specify whether your custom element has an instant or duration period type, based on whether your fact is measured at a point in time or not. Since in this case we're looking at an income statement line item, we're going to specify a "duration" period type.
Item type — For the item type, as Tony mentioned, there are a number of different types available. Since here we're looking at a dollar amount, we're going to specify a "monetary" item type.
Balance type — If you're creating an extension for a monetary item, you may specify whether the element would normally have a debit or credit balance — and this is required for extensions for income statement or balance sheet line items. It's optional for other items, and may not be applicable for some items. Since this is an item of income, we're going to specify that it will normally have a credit balance.
Definition — If your monetary extension element doesn't state a debit or credit balance attribute, you'll need to provide a definition that makes the meaning of a positive or negative value clear. For example, if you create a monetary extension called "Other Loss Adjustments, Net", your definition might say, "A positive adjustment value indicates a net increase in cumulative losses." In all other cases, definitions are optional.
Standard Label — Next you'll create a standard label, which should be descriptive, but not too descriptive: don't include company-specific or period-specific information in your label. For example, don't create a standard label: "Acquisition of ABC Company", or "4th Quarter Adjustment". Make sure your labels are generic enough so that you can reuse your custom element for other transactions, or in other periods.
Element Name — The element name is derived from the standard label — it's usually it's the label with all the words capitalized and the spaces removed. This is the "tag", and it's what you'll use to tag your facts in your instance document.
Reference — In this case, references are easy; you cannot include a reference for custom elements.
One question we've gotten is whether "common extensions" will be added to the taxonomy. We are monitoring extensions, but you should also take advantage of the public review period for the 2011 taxonomy to suggest any elements that you think are missing.
22. The staff has described problems with filers entering negative values where they should have merely negated the label in the label link base. Susan, can you tell us what this is about?
(Slides 31, 32, and 33)
Once filers have selected an appropriate element for their facts, they then enter the amounts associated with that element into their instance document. We have seen some issues come up surrounding how to both enter and display negative amounts.
In a traditional format financial statement, some amounts might be shown with brackets to designate negative amounts, and sometimes negative amounts are designated by their label, for example, "Loss on Sale" or "Cash Used in Investing Activities." But when you're entering amounts in an instance document, deciding whether to enter a negative value or negate a label is really a two-step process. The first step deals with how you enter the value and getting the value accurate. The second step deals with controlling whether the data renders with, or without, brackets.
First, filers determine whether the amount should be entered as a positive or negative value. This determination is made based on the element's attributes, and specifically the element's definition, and its debit or credit balance attribute. The U.S. GAAP taxonomy is designed so that, for most elements, amounts will be entered with a positive value. For example, the balance sheet element, "Treasury Stock," has a debit balance attribute, which means that the amount tagged for treasury stock on the balance sheet would be entered as a positive value, even though most of the other elements in the equity section have credit balance attributes.
After the determination has been made whether to enter the amount as a positive or negative value, filers can then change whether the amount is rendered with brackets, by "negating the label" in the label link base. The default position of all signs in the label link base is set to "positive," or as I think of it, "off." This means that the amount will render the same way that it was entered — positive amounts will render without brackets, and negative amounts will render with brackets.
Filers can "negate" the label, or turn the negating "on," which will change the rendering to show the opposite of the way the amount was entered — positive values will now render with brackets, and negative values will render without brackets.
So to going back to our example, if you present "Treasury Stock" on your balance sheet with brackets, you would enter the amount with a positive value, and then negate the label, so the amount would render with brackets.
23. Does this issue also pertain to amounts tagged at Level IV?
Yes, filers will face this same issue when they get to the Level IV tagging. They will need to go through the same decision process for entering positive or negative amounts, then deciding whether or not to negate the label.
24. Okay, we'll move on to Level II tagging. Just by way of background, Rule 405 of Regulation S-T requires that "Each significant accounting policy within the significant accounting policies footnote must be block-text tagged." On the surface, this one seems pretty cut and dry, but as you'll learn, that isn't always the case. Susan, can filers use an element of any "item type" to tag the significant accounting policies?
No, filers should only use text-block type elements for tagging Level I footnotes, Level II significant accounting policies, and Level III tables. The only time you're going to use a string-type element is if you're choosing to tag narrative text in Level IV tagging.
25. A filer includes a separate footnote called "Significant Accounting Policies." The filer also describes certain other accounting policies in other detailed footnotes, such as, for example, it discloses that "PP&E is stated at cost" in the PP&E footnote. How should a filer consider this in complying with the Level II tagging requirement?
If a filer has a footnote designated for "significant accounting policies," and in-fact it includes all significant accounting policies, your Level II tagging would consist of tagging the individual policies just in that footnote. If you have other accounting policies in other footnotes that you'd like to tag, those would fall under the optional Level IV tagging for narrative text, and you would tag those policies with a string element.
26. Susan, what happens if a filer does not have a separate Significant Accounting Policies footnote?
If a filer has their significant accounting policies located with the related footnote, rather than all together in one footnote, they'll need to analyze their footnotes and identify the significant accounting policies wherever they appear, and then tag them.
27. Say a filer has a separate note for significant accounting policies. Tony, what guiding principles should a filer consider when thinking about how to tag each significant policy?
Joel, a filer should consider a number of guiding principles when thinking about tagging each significant accounting policy at Level II. They are:
Often, there is going to be more than one reasonable way to tag significant accounting polices. In other words, filers have some flexibility.
The best tagging approach will depend on the filer's particular facts and circumstances, such as the level of detail included in the disclosures and how the information is organized.
A filer's headings and subheadings included in the footnote may be useful guides in determining how to tag the information, recognizing that filers use headings and subheading differently. A quick example would be a filer that includes subheadings under revenue recognition; one for domestic sales, one for international sales, and one for related-party sales — the accounting policies are all the same, but the filer just breaks them out to describe their unique sales and credit terms. Here, the subheadings are really irrelevant for tagging the single common accounting policy.
Each paragraph in the significant accounting policies footnote does not necessarily need to be separately tagged; again, it's fact and circumstances based on the substance of the information in those paragraphs. For example, if each paragraph describes a different significant accounting policy, then they may need to be separately tagged.
28. Let's demonstrate how a filer can apply some of those principles by walking through the details of a significant accounting policies footnote that includes two sub-headings:
The first sub-heading is "Revenue Recognition." Under that subheading are 10 separate paragraphs; the first 6 of which describe various arrangements that generate product revenues, the next 3 describe how franchise fees are earned, and the last paragraph describes how shipping and handling costs are recognized in revenue. Can you walk us through what a filer should consider in making tag selection decisions?
It would be reasonable for a filer to tag all the paragraphs that describe product revenue recognition with a single text-block element, tag all the paragraphs that describe how franchise fees are earned with another single text-block element, and then tag the shipping and handling paragraph with another text-block element. If the filer does that, he'll have to create custom text-block elements for each because the taxonomy only includes one text-block element for all of Revenue Recognition. Alternatively, the filer can tag all 10 paragraphs with one text-block using the standard revenue recognition text-block element. Future updates to the standard taxonomy may include many more text-block elements for various types of accounting policies, including various revenue recognition policies like in this example, in order to allow filers to tag more detailed accounting policies without having to create custom elements.
The second sub-heading is called "Cash and cash equivalents and short-term investments." Here, the filer includes 1 paragraph which includes a commingled discussion dealing with classification issues pertaining to cash and cash equivalents and short-term investments. What should a filer consider when tagging this?
The filer may extend for the single text-block "combination" disclosure, or alternatively, the filer can block tag the disclosure twice — once with the cash and cash equivalents standard text-block element and once with the standard short-term investments text-block element, since both discussions are combined into a single paragraph.
29. In a filer's Form 10-Q, the filer does not repeat any of the significant accounting policies it disclosed in its latest 10-K. What should the filer consider in satisfying the Level II tagging requirement?
Joel, if the 10-Q does not include any significant accounting policies, then there is nothing to tag for Level II for that filing.
30. Moving on to Level III, which requires each table in each footnote to be block tagged. Again, this one seems pretty simple to deal with — but we'll see. A filer includes in its traditional format footnote a table showing the components of inventory, and there is a column for each balance sheet period. The taxonomy has elements for raw materials, work-in-process, finished goods, and total inventory; however, there is no text-block for this table. In this situation, what should the filer do?
Joel this situation is quite common throughout the taxonomy and the filer should create an extension for the text-block. We recognize that future updates to the taxonomy may include many more Level III text-block elements than it currently has. To talk specifically about the example on the slide where the filer wants to tag the inventory table, the filer would create a custom text-block element since the U.S. GAAP taxonomy does not include one.
31. Tony, a filer presents in its traditional format footnote two separate tables having information that is included in just a single standard text-block element. So for example, the filer's segment footnote presents one table for "revenues and earnings by segment" and a second table for "assets by segment." The taxonomy includes all this information within one single text-block element. How should the filer tag its two tables given that Rule 405 of Regulation S-T says that "each table within each footnote must be block-text tagged?"
First, let me comment on the rule you just cited, and then I'll address the fact pattern presented in your question. Decisions about block tagging tables warrant a case-by-case evaluation based on specific facts and circumstances; and, often times, filers will have a choice among more than one reasonable approach. We think one consideration for filers is whether the taxonomy has the information being presented in one text-block element, or more than one. It's helpful to remember that elements in the taxonomy were developed based on a number of factors, including various reporting practices among filers and the manner in which accounting standards describe the disclosure requirements. Another consideration for filers is how closely related multiple tables are to each other, and the composition of information included within a single table. We recognize that U.S. GAAP gives filers considerable flexibility in presenting their footnote disclosures and that the U.S. GAAP taxonomy doesn't provide elements to fit all possible scenarios. With all this mind and as a practical matter, we lean toward reading the Level III tagging requirement of Rule 405 you cited fairly broadly. As tagging practices evolve, we may be poised to develop further guidance in this matter.
Now to your specific fact pattern: As you've pointed out in your question, the taxonomy includes a single standard text-block element, which is "Schedule of Segment Reporting Information, by Segment." Based on its definition and authoritative reference, that standard text-block element captures all the information the filer has presented in two separate tables. While it would be fine for the filer to create custom text-block elements for each of these two tables, it seems to make more sense in this case for the filer to tag both tables using that standard text-block element.
32. Okay, let's explore that in another example. One filer includes in its traditional format footnote one table showing the components of inventory, and there is a column for the balances at this year-end and another column for balances at last year-end. However, another filer presents this similar information in two tables — one table shows the balances at the end of this year and the table just below it shows the balances at the end of last year. While the taxonomy has elements for raw materials, work-in-process, finished goods, and total inventory, there are no text-block elements at all for the information being presented by these tables. What should these filers do to tag their tables?
Since the information presented by the first filer is contained within a single table, that filer just needs to create one custom text-block element. The second filer has a choice of combining the two tables in a single custom text-block element, or tagging them separately in two custom text-block elements. While both approaches for the second filer are fine, we think combining them into a single text-block element makes more sense since the only distinction between the two tables is the contextual time period.
33. Consider a situation where the filer's traditional footnote has a single table, and the information in that table corresponds to two separate text-block elements in the taxonomy. For example, the footnote has a single "fair value" table showing the net asset and liability position, but the taxonomy has one standard text-block element just for the asset position and another text-block element just for the liability position. How should the filer tag its table?
We believe there are two reasonable approaches. The filer may extend for the single text-block "combination" table, or, alternatively, the filer can the block tag the table twice — once with the asset text-block element and once with the liability text-block element — this would be a reasonable approach since the asset and liability positions are commingled into a single table.
34. Some tables in a note have their own superscripts, or footnote references, which are presented just below the table. When block tagging the table, should these footnotes be part of the block tag?
Yes they should. By the way, filers shouldn't forget to tag data in those superscripts when tagging at Level IV — they should be tagged just like any other Level IV data.
35. Now let's talk about Level IV detail tagging and some of the issues filers will be dealing with. Tony, here's a very simple question we get all the time, which is, "Will a table appearing in the traditional format financial statements render the exact same way by our viewer after it's detailed tag?"
Joel, it's a simple question; and the answer is, "It depends on how the table is set up in the traditional format financial statements and how the related elements are set up, or "structured," in the U.S. GAAP Taxonomy." We'll be demonstrating the rendering effects of tagging tabular footnote information in a few moments.
36. Okay, you've referred to the way elements are set up, or structured, in the taxonomy. Let's explore that. Some elements are set up in the taxonomy using what is called a "dimensional table structure." Can you explain what that means and how filers should consider that structure when tagging tabular footnote information?
(Slides 43, 44, and 45)
Joel, I'll start off describing "non-dimensional table structures" first since it's easier for most folks to understand, and then I'll describe the dimensional table structure. Certain tables in the footnotes, for example, the major components of inventory at each balance sheet date, appear with monetary line items that provide the items' descriptions; in this case, raw materials, work in progress, finished goods and total inventory; and there are two columns, one for each balance sheet date. The related monetary elements are simply listed in the taxonomy — we refer to this as a non-dimensional table structure; some refer to it as a list type table.
Now, the filer would tag the amounts for raw materials, work in progress, finished goods and the total using the monetary elements in the taxonomy and designate the appropriate date contexts for each element — one for each balance sheet date. So, while only four monetary elements are used, eight amounts are actually tagged because there are two date contexts for each monetary element. This type of table typically will render in a fashion similar to the traditional format financial statement table. Another example of this structure would be the income tax rate reconciliation, where there are columns for each of the periods presented in the financial statements, and the types of reconciling items are listed down the left side of the table.
So that is a description of the non-dimensional (or list type) table — now I'll describe dimensional tables.
In dimensional tables, for example the Property Plant and Equipment Note, the structure of the related elements in the taxonomy is quite different. First, the taxonomy will group all the related elements for the dimensional table under a title that will include "Table." The elements are then sub-grouped into monetary line items, similar to what I just described in the non-dimensional (or list type) structure, and columns, called "domain members." The monetary line item, like gross cost, can be tagged for a variety of types or categories of assets, each one of which is represented by a domain member. So, there can be a domain member for Land, one for Buildings, one for Furniture and Fixtures, etc., and the filer can add as many domain members as he wants to. Generally, this table structure is useful because it allows a filer to easily customize the columns, or domain members, to fit his particular circumstance for tagging common monetary line items.
The U.S. GAAP Taxonomy has many of these dimensional tables, and they occur typically where there are a large number of items with a common underlying monetary concept. Examples of dimensional tables included in the taxonomy are the "Schedule of Restricted Cash and Cash Equivalents" and the "Schedule of Finite Lived Intangible Assets." Note that in the "Restricted Cash and Cash Equivalents" table, the underlying concept, or monetary line item, "Restricted Cash and Cash Equivalents" will be the same for each item represented by the columns, or domain members. In this case, those domain members are the types of cash equivalents; that is, money market funds, commercial paper, and U.S. treasury securities.
Let's talk through the example of a "Property, Plant, and Equipment" table. The table at the top of the slide is the table in the traditional format financial statement, and the first few lines — Land, Buildings, Furniture and Fixtures and Construction in Progress — have a common underlying monetary concept, which is Gross Cost. This is the concept that is represented by the monetary line item element "Property, Plant and Equipment, Gross."
To map this information to the standard dimensional table elements, the filer would start with the underlying concept of "Property Plant and Equipment, Gross" and add each of the domain members — Land, Buildings, Furniture and Fixtures and Construction in Progress. This is shown by the table at the bottom of the slide.
37. So, if a filer wants to tag his fixed asset table at Level IV, should he use the dimensional table structure and related elements included in the taxonomy?
Yes, we suggest filers utilize the pre-defined table structure included in the taxonomy and use the related line item elements and domain members to the extent they are applicable. The filer can create custom line item elements and domain members as needed to fit his particular circumstances. These custom elements would be created based on the same principles for creating extensions we discussed earlier. This is addressed in FAQ Number 38.
38. Susan, a filer's note includes several tables along with several paragraphs that provide more information about what's depicted in those tables. How might the filer approach mapping and tagging this information?
First, I'd like to talk for a minute about mapping and tagging. Some people use these terms interchangeably, but there are really two separate processes going on here. Mapping is the first process, and this is where filers select elements that are appropriate for their specific facts, which is what we've been focusing on here today. Tagging would include taking those elements you've identified in the mapping process and now associating them with your facts in an instance document. How that process works is dependent on the process you've set up for creating instance documents, whether you're using a software program in-house or outsourcing that part of the process. It's good to keep in mind that these are separate processes and approach them in that order, because it will help you think through and focus on the element selection process.
So now let's go back to the process of mapping a footnote where you have text and tables. I'd approach that by starting with the first table, and I'd look in the taxonomy to see how the table is structured. Just to review, the taxonomy uses two types of tables, dimensional tables and what I think of as "list-type" tables. Once you've determined whether you have a dimensional or a list-type table, you would set up your mapping using that structure, and map your table elements. Then, I'd look at the text to see if there are any amounts relating to that table that should be added to the existing table structure, and I'd map them directly into the table at that point, and create any custom elements that might be needed. Then, I'd go on to the next table, and repeat that same process.
After you've mapped the data in your tables, and the amounts in the text related to those tables, if you have any remaining amounts in the text that haven't been mapped yet, you would use the same process to find the appropriate elements for those amounts, see how the table structure for those elements is set up in the taxonomy, set up your mapping to follow that structure, and map the elements. Following this, it's very possible that you could end up with tables in your mapping that don't exist in your traditional format document.
If you're mapping a footnote that contains amounts only in the text without having any tables at all, you would still use that same process of identifying appropriate elements and mapping them; and, this is another situation where you'll end up with a "table" as part of your mapping process that doesn't correspond with a table in your traditional format document.
I do want to point out that mapping data using table structures doesn't change the underlying data itself. Even if you end up with a table in your mapping that doesn't appear in your traditional financial statements, we're not adding any information that doesn't already appear. We're just mapping the information in your traditional format document to elements in the taxonomy.
39. We've received a number of questions about tagging interest rate information and tagging numbers expressed as a range. We'll review these issues now. In a note, a filer discloses that a debt instrument has a variable interest rate of LIBOR plus 1%, which is reset monthly. Susan, how should a filer tag this at Level IV?
The 1% is an interest rate (percent) that is required to be tagged. To tag this, you would look to see if the taxonomy includes an element for this — which it does not at this time. Filers would need to create a custom element, which would have a "percent" item type, and a label and element name that indicates that it represents "the interest rate percent above LIBOR." Filers might find it helpful to create this custom element as a line item within the dimensional table for debt, so they can reuse it for multiple debt instruments. Since the disclosure that the rate is reset monthly is not an amount, filers could choose to tag that part of the disclosure using a "string" type element, or choose not to tag it.
40. Susan, the filer has the following disclosure: "The useful lives of the company's fixed assets range from 3 to 5 years." How should the filer tag this information to comply with the level IV requirements?
When you're tagging ranges, each endpoint is a separate amount and must be tagged separately. In this case, you would select an element with an "integer" item type. In addition, you may choose to tag the entire sentence or the phrase, "3 to 5 years," as narrative text using a "string" type element, or choose not to tag it.
41. Susan will now briefly review some of the concepts we've been discussing here this afternoon as they apply to footnote tagging. Susan?
Inventory Footnote (Slides 47 – 51)
Choose a text block element that most closely matches the information in your footnote.
Text-block type elements have a "duration" period type.
Your period dates should be the year-to-date period you're currently reporting on.
Restructuring Footnote (Slides 52 – 56)
Fair Value Footnote (Slides 57 – 65)
Two tables, one presentation group.
Where a traditional format table contains information that is covered in more than one standard text-block element, the table might be able to be tagged with each applicable text-block element. Facts and circumstances. Or, filers may create a custom element.
Footnotes to tables should be included with the Level III text-block tag.
Review mapping process.
Some dimensional tables render as long lists, with the totals at the top followed by the domain members and their related line items.
Footnotes to tables may be included in their entirety at Level IV (using "XBRL Footnotes"); this is optional.
Additional tables may need to be created for facts that don't fit in the footnote tables.
To wrap up this section, we've given you a lot of information, but there are just a couple of points I'd like to emphasize:
First, your rendering may or may not look like your traditional format filing. Some of the differences filers can control, and some, particularly with regard to dimensional tables and the Statement of Shareholders' Equity, filers may not be able to control.
Second, element selection and mapping decisions will require thought and judgment, and I hope we've given you a framework for those decisions that you will find helpful.
The good news is that you can use the decisions from your initial filing as you create subsequent filings, so you won't be starting from scratch each time. But, we encourage you to start early and give yourself plenty of time to get through the initial process.
Now, Walter Hamscher is going to explain how a filer can make a "test submission" of the interactive data exhibit, and how the filer can view the data in a human-readable format using the agency's "previewer." As you may know, a filer can make a so-called "test submission" of the interactive data exhibit with the Commission before making a "live submission." A filer is encouraged to make a test submission in order learn how the Edgar validation system would respond if it were a live submission. If the validation system finds an error as part of the test submission, the filer will be notified as to the nature of the error so that it can be addressed before making a live submission. A major validation error in an interactive data exhibit that is part of a live submission will cause the exhibit to be held in suspense in the electronic filing system, while the rest of the filing will be accepted and disseminated if there are no major validation errors with the rest of the filing. If this happens, the filer will need to revise the interactive data exhibit to eliminate the major error and submit the exhibit as an amendment to the filing to which it is intended to appear as an exhibit.