The process of preparing your financial statement in XBRL requires knowledge and experience. This process is in constant evolution and it will continue to be refined over the coming years. The latest step in this evolution took place last year when the SEC announced the adoption of Inline XBRL for companies. This is a positive step as it will require companies to move from the current dual filing process (EDGAR HTML and XBRL) to a single filing requirement (iXBRL).
Your company’s financial statement is not just numeric data that is meant to assuage the regulatory authority and keep you on good terms with the law. It is an evaluation of the company’s financial health and potential earning capacity that investors gauge carefully. All of which require
your document to adhere to the SEC reporting software. This is also why the iXBRL tagging in the document is so important. So despite how you may feel about the process, remember that iXBRL makes your financial document accessible to the right audience, in the right way.
Tagging duplicate amounts/facts
As issuers prepare to transition to iXBRL, it is important to understand some of the key differences in the mechanics of tagging in XBRL versus iXBRL. The first basic concept we will address in this series is duplicate amounts/ facts and how they need to be tagged in the iXBRL format. Your financial report may include concepts or facts that have to be reported more than once in the document. These concepts are used to cross-reference data across the file. For example, concepts like “Profit Before Tax” are used both in the Income Statement and the Cash Flow statement. This is a duplicate fact/amount.
On a fundamental level, the tagging of all numbers present in the Primary Financial Statement and in the notes is compulsory for both XBRL and iXBRL. But there is a difference when it comes to duplicate amounts.
Tagging in XBRL:
Duplicate concepts need to be tagged only once in the entire document.
Tagging in iXBRL:
When a duplicate amount is present, it needs to be tagged everywhere it appears in the document.
There are two types of duplicate amounts:
1) Concepts of facts with exact match
These concepts appear identically no matter where they appear in the document. They are expressed in the same unit (thousands, millions, etc), same scale (stocks, Euro, Dollar, etc), and same precision (if reported with two digits after a decimal point, it will be reflected in the same way across the document). For example, $7.5 million ‘Cash’ will appear the same when it is reported in the Balance Sheet and Cash Flow Statement. This fact-value remains unchanged.
Tagging in XBRL:
Once the value of $7.5 million is tagged in the balance sheet, the tag has to be placed in the Cash Flow ‘linkrole’. The linkrole will empower the tag that was used for $7.5 million in the Cash Flow Statement to do the same for it in the Balance Sheet without the fact-value having to be tagged again.
Tagging in iXBRL:
Every occurrence of the fact-value needs to be tagged. Therefore, $7.5 million needs to be tagged to Cash in both the Balance Sheet and the Cash Flow Statement.
2) Concepts with the same fact but different precision
In this case, the same fact-value may be expressed differently, but carries the same meaning. For example, the Interest Income is reported as $25.6 thousand in the Statement of Operations, but in the Notes to Financial Statements, it is reported as $0.25 million.
Tagging in XBRL:
If the user tags both the values – i.e, $25.6 thousand and $0.25 million to Interest Income, there will be a validation warning indicating that there are duplicate facts in the XBRL document. One of the facts will be ignored, or needs to be untagged.
Tagging in iXBRL:
Both values have to be tagged to Interest Income, with different scale- as $25.6 thousand in the Statement of Operations and as $0.25 million in the Notes to Financial Statements.
Duplicate amounts can cause trouble if not addressed correctly. If you’re not sure about how to go about the tagging process for such values, make sure to consult experts. The end goal is to have a perfectly validated document that can be filed with the SEC without a hitch. Stay tuned to this series as we tackle Hidden tags, linking, and referencing facts.
