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U.S. Securities and Exchange Commission


Staff Observations From Review of Interactive Data Financial Statements (from October 6, 2009)

The staff in the Office of Interactive Disclosure has completed an initial evaluation of the eXtensible Business Reporting Language (XBRL) submissions under the Commission's new rules relating to interactive data for financial reporting. We have now received most of the Interactive Data Files from the initial phase-in group of filers and overall the filings indicate that filers devoted significant effort to consider their responsibilities under this program, comply with the new rules and provide high-quality submissions.

Based on a limited review, we have identified certain matters filers should consider as they prepare future submissions to further improve the quality of those submissions. In describing these matters, we have included specific examples for illustrative purposes only. These examples are not meant to represent a complete list of all such items we identified during our review nor necessarily reflect a violation of our rules.

The observations based on this initial review represent the views of the staff of the Office of Interactive Disclosure. They are not rules, regulations, or statements of the Securities and Exchange Commission. Further, the Commission has neither approved nor disapproved them.

Rendering

The format of financial statements and footnotes rendered on the Commission's interactive data viewer generally will be similar but not identical to the HTML/ASCII filing when filers adhere to the guidance in the rule release and EDGAR Filer Manual ("EFM"). Filers should be aware that there is no requirement that the rendered files appear identical to the HTML/ASCII filing (Compliance and Disclosure Interpretations for Release 33-9002, Question 130.08). In addition, filers should not deviate from the guidance in the rule release and EFM (e.g., change, delete, or summarize information in the Interactive Data File) solely in an attempt to correct rendering issues.

  • We have noted certain differences between the HTML/ASCII filing format and the Commission's viewer-rendered format that can be eliminated by filers. For example, line item captions appearing in the HTML/ASCII financial statements should be replicated in the Interactive Data File by changing the element label to match the corresponding line item (EFM 6.11.1). Also, major headings appearing in the HTML/ASCII financial statements, such as "Assets," "Revenues," or "Cash Flows from Operating Activities," can be reflected in the Interactive Data File by using abstract elements. Abstract elements also are used to present separately each footnote (EFM 6.7.12).

  • Alternatively, we have noted certain differences between the HTML/ASCII filing format and the Commission's viewer-rendered format that cannot be eliminated by filers, such as, underlining, indenting, bold/italic fonts, column headings such as "unaudited", and subheadings such as "Current Assets". Also, captions for totals and subtotals may differ, particularly when the HTML/ASCII filing includes totals and subtotals without a corresponding line item caption; in this regard, filers should recognize that in order to report a value on the face of the financial statements in the Interactive Data File, the element's label will always render. Finally, the formatting of the statement of shareholders' equity may differ in a number of ways, including how certain columns and subtotals are rendered. We expect to continue updating the Commission's viewer periodically to address these issues.

Element Selection

Filers should select elements after a thorough search of the standard taxonomy and careful consideration of elements' standard definitions, standard labels, and other attributes. Filers will benefit from using several taxonomy search strategies to identify the appropriate element and becoming thoroughly familiar with the general organization of the standard taxonomy. Filers should understand that elements related to any particular face financial statement, such as the cash flow statement, may be located within another face financial statement section, such as the income statement, or within one of the "Disclosures" sections of the standard taxonomy. Also, filers should be aware that inadvertently misspelling search terms or using search terms that differ from standard label names may produce unintended search results, and search results may include elements unique to specific industries which may not be appropriate for the filer.

Based on the results of a thorough search, filers should select the element with the narrowest definition that captures all material information (EFM 6.6.24 through 6.6.29). We have noted the following types of issues with element selection:

  • Filers selected a standard element when it appears a more appropriate standard element exists.

    • We have noted the following examples where our understanding of the filer's disclosures suggests that a standard element with a narrower definition would have been more appropriate:

      Standard element used by filer Standard element with a narrower definition
      Payments for Repurchase of Equity — used for a cash flow statement line item Payments for Repurchase of Common Stock
      Additional Paid-in Capital — used for a balance sheet line item Additional Paid-in Capital, Common Stock
      Inventory, Finished Goods — used for a balance sheet line item Energy Related Inventory, Petroleum
      Fair Value Disclosures — used as a text-block for a footnote Fair Value, Measurement Inputs, Disclosures
    • We have noted the following examples where our understanding of the filer's disclosures suggests that a standard element with a broader definition would have been more appropriate:

      Standard element used by filer Standard element with a broader definition
      Consolidation Policy — used as a text-block for a footnote that included information about consolidation as well as basis of presentation Organization, Consolidation, and Presentation of Financial Statements Disclosure
      Long-Term Debt — used as a text-block for a footnote that included information about long-term debt and short-term credit agreements Debt Disclosure
  • Filers created a new element when it appears an appropriate standard element exists.

    • We have noted the following examples where our understanding of the filer's disclosures and new element definitions (when provided) suggests that the filer should have used a standard element:

      New element created by filer Standard element
      Salaries, Wages and Benefits — used for an income statement line item Labor and Related Expense
      Leaseback Transaction Gross Proceeds — used for a cash flow statement line item Sale Leaseback Transaction Gross Proceeds
      Income (Loss) Before Income Taxes — used for an income statement line item Income (Loss) from Continuing Operations Before Equity Method Investments, Income Taxes, Extraordinary Items, Cumulative Effect of Change in Accounting Principles, and Noncontrolling Interests
      Principal Payments on Other Debt — used for a cash flow statement line item Repayments of Other Debt
      Net Income Attributable to [Parent's] Common Stock From Discontinued Operations — used for an income statement line item Income (Loss) From Discontinued Operations, Net of Tax, Attributable to Parent
      Retrospective Adoption of Accounting Pronouncement — used as a text-block for a footnote Accounting Changes and Error Corrections
    • We have noted filers created new elements representing identical concepts reported on multiple financial statements within the same submission. For example, a filer that presents consolidated financial statements together with separate face financial statements for each of the consolidated businesses created new elements for each of the same line items appearing in the separate financial statements, whereas the filer should have used the same applicable elements with unique context references so as to differentiate and designate the statements to which they relate. Refer to the Context References section below for further information regarding this issue.

    • We have noted the following examples of mixed practice among filers in the use of standard elements that contain multiple reporting concepts when filers disclose information that includes some but not all of those reporting concepts. While either approach depicted in these examples has merit, to foster the most helpful comparisons, using the narrowest standard element is generally preferred to creating a new element. (1) A filer reporting a line item for "depreciation and amortization expense" on the cash flow statement chose the standard element, "Depreciation, Depletion and Amortization," as it is the narrowest standard element that includes depreciation and amortization expense. However, another filer created a new element, "Depreciation and Amortization Expense," since their line item did not include depletion expense. (2) A filer presenting a footnote for "basis of presentation" created a new text-block element, "Basis of Presentation," when a standard text-block element, "Organization, Consolidation, and Presentation of Financial Statements Disclosure" was selected by another filer in a similar circumstance.

  • Filers selected a standard element when it appears a new element should have been created. If a standard element does not adequately capture all material information, filers should create a new element.

    • We have noted the following examples where our understanding of the filer's disclosures suggest that the filer should have created a new element which combines the concepts of two or more standard elements instead of selecting a standard element that does not capture all material information: (1) The filer used a standard element, "Prepaid Expenses," for the balance sheet line item, "Prepaid Expenses and Other Current Assets," whereas a new element combining both concepts may be more appropriate. (2) The filer used a standard element, "Deferred Income Tax Expense (Benefit)," for the cash flow line item, "Deferred Income Tax Benefit and Other Non-cash Tax Items," whereas a new element combining deferred income tax benefits and other non-cash tax items may be more appropriate.

    • We have noted the following example where a filer reported on separate line items each of multiple reporting concepts included in one standard element. The filer reporting "proceeds from sale of finance receivables" and "proceeds from collection of finance receivables" as separate line items on the cash flow statement used the standard element, "Proceeds From Sale and Collection of Finance Receivables" for one of those line items and created a new element for the other. Since both of the reporting concepts included in the standard element were disclosed separately, creating a new element for each of the separate line items would be appropriate.

  • Filers neglected to tag amounts appearing parenthetically in the financial statements, such as the allowance for doubtful accounts and shares of stock outstanding. Such parenthetical amounts should be tagged and presented separately from the face of the financial statements (EFM 6.13.4).

Context References

The context reference, in combination with a selected element, defines a fact or value in the financial report. Context references provide specific information (such as reporting periods or particular businesses) that allows tagged information to be understood in relation to other information presented. We have noted the following types of issues with respect to context references:

  • When filers present consolidated financial statements and separate financial information for subsidiaries, businesses, or segments using the same line items, they should use the same elements for those common line items and create unique context references to differentiate and designate the elements among each presentation. In these circumstances, creating unique context references allows common elements to be used for multiple financial presentations included in a single Interactive Data File.

    • For example, a filer who reports the same product revenue line item on a consolidated income statement as well as within disclosures for an operating segment should select the same appropriate revenue element for both presentations, and use one context reference unique to the consolidated income statement and a separate context reference unique to the segment disclosure.

  • When filers report financial information using a roll-forward format, they should use the same instant context reference for the beginning balance as for the end of the previous period (EFM 6.5.9 and 6.5.10).

    • For example, a calendar-year filer presenting the statement of cash flows should use an instant context for the beginning "Cash and Cash Equivalents," which references the end of the previous period (e.g., 12/31/07).

Negative values and negated labels

Filers may enter an amount as a negative value and/or they can negate the label in the label link base, with each action serving an entirely different purpose and achieving an entirely different result. We have noted many instances of filers incorrectly entering amounts with negative values. Filers should be aware that the standard taxonomy generally is designed so that for most elements, amounts will be entered with positive values. Filers should first decide whether to enter an amount as a positive or negative value based on the specifics of the particular element (i.e., its definition and debit/credit balance attribute). After a decision has been made to enter an amount as a positive or negative value, filers can then change whether the amount is rendered within brackets by negating the label in the label link base. In this regard, the default position of all signs in the standard label link base is set to "positive." Therefore, if an amount is entered as a positive value, it will render without brackets unless the label is negated. Conversely, if an amount is entered as a negative value, it will render with brackets unless the label is negated. (EFM 6.6.30 and 6.11.6) The following examples illustrate the issues we have noted related to these matters:

  • The balance sheet element, "Treasury Stock," has a debit balance attribute, which means that the carrying value of treasury stock appearing on the balance sheet is entered as a positive value, even though most of the other elements for commonly reported components of stockholders' equity will have credit balance attributes which also are entered with positive values. If the carrying value of treasury stock is to be rendered within brackets, the label should be negated; if the amount is not to be rendered within brackets, the label should not be negated.

  • The income statement element, "Net Income (Loss) Attributable to Noncontrolling Interest," is defined as "the portion of net income (loss) attributable to the noncontrolling interest deducted in order to derive the portion attributable to the parent." So, the amount of the net income attributable to noncontrolling interest should be entered as a positive value even though the amount is subtracted from "net income including portion attributable to noncontrolling interest." If the amount is to be rendered within brackets, the label should be negated.

  • Elements within the "Net Cash Provided By (Used In) Operating Activities" section of the cash flow statement and "Non Operating Income (Expense)" section of the income statement may appropriately be entered with either a positive or negative value based on a careful evaluation of the elements' standard definition and balance attribute. For example, the amount entered for "Marketable Securities, Unrealized Gain (Loss)" could be either a positive or negative value depending on whether the reported amount represents a gain or a loss, whereas the amount entered for "Provision for Other Losses" generally would be entered only with a positive value.

Decimals

Filers should follow the decimals attribute table in EFM 6.6.32 to ensure that the tagged amounts accurately reflect the rounded values reported in their financial statements. We have noted some filers incorrectly used a "0" decimals attribute for earnings per share rounded to cents when they should have used a "2" decimals attribute instead.

Other Observations

Other miscellaneous observations are noted below:

  • Filers have not provided debit/credit balance attribute information for new monetary elements created for the balance sheet or income statement (EFM 6.8.11). Also, filers have not included a definition for other new monetary elements created. This information is necessary in order to provide meaning to the new elements and distinguish a positive value from a negative value (EFM 6.11.5 ).

  • Filers have incorrectly included the document information element, "Amendment Description," when the Amendment Flag is set to "false." If the Amendment Flag is set to "false," the element "Amendment Description" should not be included in the Interactive Data File. The element, "Amendment Flag," should be set to "true" only if the Interactive Data File is an amendment to a previous Interactive Data File. Otherwise, the flag should be set to "false." (C&DI 105.08)

  • Some filers have not posted their complete Interactive Data File on their corporate web site. The Interactive Data File must be posted to the corporate website by the end of the calendar day on the earlier of the date the Interactive Data File is submitted or is required to be submitted. Compressing these files in a .zip file may make them more difficult to access.

 

http://www.sec.gov/spotlight/xbrl/staff-review-observations-100609.shtml


Modified: 11/01/2010