Support Learning and Insight

It’s more important than ever to understand the challenges facing financial executives. Support the Financial Education & Research Foundation today.

Accounting

3 Biggest XBRL Mistakes of the First Quarter


by FEI Daily Staff

The 10-K season is over and most Q1 filings are in as well, so now is a good time to ask how corporate filers are doing with their XBRL filing quality.

© JURGENFR/ISTOCK/THINKSTOCK

We track all filings as they come in and inspect for incorrect dates, incorrect numbers and other quality issues. Here’s a wrap-up of what we’re still finding to be issues. DEI Information

The Document and Entity (‘DEI’) section of a filing is the section that contains basic info about the filer and the type of filing being submitted. It’s the first thing that users typically see. The fact that there are errors here at all is disappointing since they are easy to detect and prevent. However, the good news is we have seen the rate of problems decrease significantly over time, from near 5% of filings a few years ago to closer to 2% now.

What to look for? Fiscal year end date for some reason is a recurring problem. We see a number of cases where it matches the quarter end rather than the year end. Also, the DATE associated with the entity shares outstanding. Companies often times forget to update this value from the previous filing.

Scale Errors

Errors of scale continue to be the most common error in XBRL filings today. Unfortunately, many filers don’t appear to realize this is an issue, and therefore are not checking for it. A ‘scale error’ is when a filer incorrectly enters a value in the wrong ‘scale’…like: 302,456 instead of 302,456,000, most likely because that is the way it appears in the ‘paper’ filing. This should not be taken lightly. These are serious errors and have led to SEC comment letters in the past.

In particular, share counts seem to attract more than their fair share of scale errors. Textual portions of the footnotes as well. But these errors can happen anywhere, and invariable we get one or two filings every period with every value in the wrong scale.

We have seen only a small amount of reduction in the amount of scale errors over time, with the frequency of filings contain scale errors holding around 10%. Most every company has done this at one time or other, and we see it happen across all filing software suites and service providers. If you are an XBRL reporting professional, you should assume that there are problems in your filings, and spend a little time trying to weed them out.

How to prevent scale errors?

All filing software suites are different, and their rendering will often times be deceiving. Therefore, the best way is the simplest: When all is said and done, before you file, take a last look at a raw list of the numbers in your filing…just like this:

Items in the wrong scale ought to be fairly easy to spot!

Final note – Auto generated tags It appears there is a feature in some XBRL creation software that allows users to created randomly generated tags for their disclosures, rather than assigning the proper GAAP tags. In other words it turns this:

Into this:

This seems to be a significant violation of the E.F.M. Plus it makes the data useless to users like us. I’d strongly recommend people stay far away from this approach.

Alex Rapp is the co-found of Calcbench, an XBRL powered financial data and analysis platform. Corporate fillers may request free access to their filing quality portal at www.calcbench.com/filerportal.