Vail Resorts, Inc (MTN), using Workiva
software, has given us a tagged income statement that could be described in
skiing parlance as ‘double black diamond’. Using this statement for comparative
investment analysis is truly for experts only. Why? Extensions. And more extensions.
These custom line items comprise more than 50% of the statement. Take a look.
This isn’t exactly what the SEC envisioned
with XBRL. To be clear, extensions are allowed but to be used sparingly. XBRL was
designed to produce financial data that is both machine readable and
comparable, giving investors easier access to meaningful data. This hasn’t been
fully realized by the SEC, but it’s still a worthy goal. Have companies standardize their
own data rather than leave it to a handful of information aggregators who
charge oligopolist pricing. Genius really. But only if all stakeholders are
on board. Clearly, they are not. And the Vail Resorts filing is exhibit A.
What could Vail Resorts have done differently? Let's look at a standard US-GAAP alternative for each extension.
- Revenue: Mountain
and Lodging Services and Other. Create segments axis
for primary element us-gaap_otherRevenueNet.
- Revenue: Mountain
and Lodging Retail and Dining. Create segments axis
for primary element us-gaap_otherRevenueNet.
- Revenue: Real Estate. Tag to us-gaap_realEstateRevenueNet.
- Expense: Mountain and
Lodging Operating Expense. Create segments axis for
primary element us-gaap_directOperatingCost.
- Expense: Mountain and Lodging Retail and Dining Cost of
Goods Sold. Create segments axis for primary
element us-gaap_directOperatingCost.
- General and Administrative. Tag to us-gaap_generalAndAdministrativeExpense.
- Expense: Real Estate, Net. Tag to us-gaap_costOfRealEstateRevenue.
- Gain on Sale of Real Property. Tag to us-gaap_gainLossOnSaleOfPropertyPlantEquipment.
- Change in Fair Value of Contingent Consideration. Tag to us-gaap_businessCombinationAcquisitionRelatedCost.
- Mountain Equity Investment Income, Net. Create investment axis for primary
element us-gaap_investmentIncomeNet. Two domain members are Mountain
Equity and Other (the next line item).
Keep in mind that standard tags need not have
exactly the same meaning as the underlying items. They should be closely related,
or pass the ‘close enough’ test. Filers can use custom labels to express the
nuances of their particular items.
So from the original 12 extensions, only two
remain, both subtotals that are unimportant. This is just one approach; there
are others. The point is that with a little effort and an understanding of the
objective, Vail Resorts could have filed a statement with the skiing equivalent of say, a ‘blue run’, i.e. much more accessible to investors.
So why mention Workiva, the dominant filing software
vendor? Well, they’re a stakeholder as well. To the extent that their
software doesn’t flag excessive extensions, or suggest applicable tags from the
standard taxonomy, or prevent filings with invalid subtotals (two instances
highlighted in purple), then they're enabling poor quality and usability, diminishing the end product.
And finally, the SEC should understand that
they’ve mandated a data product that is underutilized chiefly because of issues
like this. The cost/benefit of XBRL is dangerously close to break-even. And
that’s unfortunate, given its potential.