XBRL 2.0

When the SEC, or any jurisdiction, imposes an arduous and costly standardized tagging requirement via XBRL, it should include succinct rules that are enforced without exception. Without that, there is no standardization, no comparability, and the entire exercise is pointless. The SEC’s implementation of XBRL gives filers so much tagging flexibility that it borders on anarchy. And complicit in that anarchy are the software vendors that allow tagging decisions that are questionable, and often irrational. For XBRL to realize its potential, the rules governing tagging need to narrow the choices available to filers.

Of  3,925 10Q and 10K filings by commercial-sector companies in Q1 2018, tags for the 3 primary statements were selected from elements outside the standard taxonomy for those statements 16,912 times or 4.31 times per filing, broken down by software vendor below. 

All of these ‘indirect’ tags prevent the resulting data sets to be used without some linking or rollup to elements within the statement’s taxonomy. And while many of these tags would not be considered errors, many others are misguided, careless or just plain wrong.

Here are a few examples.

1. Hawkins Inc. uses a tag for its cash flow statement from the equity taxonomy when an exact match is available in the commercial taxonomy. (filing software by WORKIVA)

     

XBRL has been successful at digitizing financial data, but it has failed to sufficiently standardize that data. Tagging is not the only issue, but it’s high on the list.