XBRL 2.0

Digital financial reporting that actually works

THE XBRL FILES: DATA QUALITY REFLECTS SOFTWARE QUALITY

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. WorkivaAmortization in Cost of Revenues block tagged to Amortization in Operating Expense block.

 

2. WorkivaSG&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.