XBRL
data quality is mediocre in part because of the filing software used to create it. Filers are tasked with creating a taxonomy for their financial
data that is consistent with the standardized US-GAAP taxonomy relevant to
their sector (ie commercial, banks, insurance, etc.) Third-party filing
software is generally used to assist in that process. Judging from the end
product, filing software is not contributing to data sets that meet investors’
basic standards of usability. There are literally thousands of examples of this
reflected in the Quality Scores published by XBRLogic.com in earlier posts. This blog post drills down on one
component of this scoring - block errors.
A block error occurs when a line item is assigned a standard tag
from the wrong block. For example, a current asset is tagged using a current
liability. This seems like a no-brainer from a software perspective. Simply
limit the tags for each item to the relevant block. There should never be a
block error. And yet, block errors are everywhere. Why is this important? Well,
the whole point of tagging data to a standard taxonomy is to provide
comparability between companies. If the tagging is incorrect and inconsistent,
then the data is flawed and its usability compromised.
Here's a sampling of block errors listed by compliance software
company.
1. Workiva. Amortization in Cost of
Revenues block
tagged to Amortization in Operating
Expense block.
2. Workiva. SG&A is
represented as an item in the G&A block, which
doesn't make sense on its face.
3. Donnelley. A non-operating expense is tagged to an operating expense.
4. Donnelley. Item from Financing Activities is tagged to item from Investing Activities.
5. Merrill. A Financing Activity item is tagged to an Investment Activity item.
6. Merrill. An Operating Activity item is tagged to a Finance Activity item.
7. Certent. A Current Asset is tagged to
a Non-current Asset.
8. Certent. An item from the Commercial taxonomy is
tagged to an item from the Bank taxonomy.
