The bill doesn’t mandate XBRL as the medium for ...More]]> The Digital Accountability and Transparency Act is headed to the Senate after the U.S. House of Representatives passed the measure to establish a consistent, transparent method for reporting federal spending information and making it accessible to anyone with an Internet connection.

The bill doesn’t mandate XBRL as the medium for gathering and reporting data, but it instructs the Federal Accountability and Spending Transparency Commission, to be formed by the bill, to incorporate existing nonproprietary standards such as XBRL if it’s practical to do so. XBRL advocates, like Barry Melancon at the American Institute of Certified Public Accountants and Campbell Pryde at the XBRL US consortium, are already stumping for XBRL to fill the need.

The DATA Act moved quickly through the House after outrage mounted over a lavish Las Vegas conference staged by the General Services Administration. The bill’s primary objective is to make government spending more transparent to the average American, but it also sets caps for government spending on travel and professional conferences.

Whatever brought it to a quick, unanimous vote in the House, groups like the newly formed Data Transparency Coalition are rejoicing at what it means for the proliferation of consistent data identifiers and markup languages for federal spending information. The Act, if approved by the Senate, will establish a complete, accurate, searchable web-based platform to allow the average American to access current government spending data on the Internet.

In a prepared statement, Melancon XBRL would create “intelligent data” to meet the bill’s mandate for consistent electronic identifiers and markup language. “A tag can be attached to each piece of data in a financial or business report,” he said. “All of the tagged data would be put on one public platform, which would make government spending more transparent.”

Pryde also assured the House knows how free and open XBRL is, and that it was developed specifically to provide the kind of reporting of financial and performance-related information that the DATA Act seeks to establish. “The ability of XBRL to enable greater standardization means that government agencies and the entities reporting to them can leverage the same software and infrastructure from agency to agency, and even more importantly, they can avail themselves of the tools already available on the market today,” he wrote to the House to support the measure. “XBRL is a low-cost solution that needs no further development and can leverage existing market tools, infrastructure and expertise.

The bill begins in the Senate with the Committee on Homeland Security and Governmental Affairs.

The taxonomy was updated by the Financial Accounting Standards Board from the ...More]]> It’s official. The 2012 GAAP Taxonomy is now ready for use. The U.S. Securities and Exchange Commission has adopted the 2012 taxonomy for use in 2012 XBRL filings for all public companies.

The taxonomy was updated by the Financial Accounting Standards Board from the 2011 taxonomy to reflect changes in accounting standards that have occurred since the 2011 taxonomy was issued. Those changes were focused primarily in fair value measurements and comprehensive income. However, FASB also took a close look at how to improve the taxonomy based on the way filers were interpreting it and using it.

For example, the staff spent a lot of time in the most recent reporting cycle looking at disclosures related to fair value and financial instruments to be sure the concepts in the taxonomy appropriately match the accounting requirements. As a result of that process, the staff revised the concepts around subsequent event disclosures to create greater consistency in how those disclosures are captured across all filings and across all filings within a give company.

The staff also saw a need to rationalize the dimensions that hold together tabular information. Now, instead of having dimensions that define both the X and Y axes of a given table, dimensions have been redefined to capture only the X axis, making them applicable to more different tables. That should make it easier to find the right dimension for a given table because a given dimension likely will be applicable to any number of tables. The taxonomy also contains some revisions to some industry-specific accounting concepts that are meant to reduce any possible confusion over which dimensions apply to specific industries.

While the GAAP taxonomy is ready for use by GAAP filers, the 2012 IFRS Taxonomy is not quite as far along. The IFRS Foundation recently finalized its taxonomy, but it has not been accepted yet by the SEC. The SEC has said it will not expect foreign private issuers to comply with the XBRL filing requirement until it approves an IFRS taxonomy.

The Foundation prepared a 2011 Taxonomy, but it received plenty of feedback that the taxonomy provided too few tags or concepts to be adequate for U.S. filing requirements. The foundation undertook an effort to expand the number of concepts to reflect not only requirements under IFRS, but also common reporting practices. There’s no word so far from the SEC yet on whether the 2012 IFRS taxonomy adequately addresses its concerns.

The winner of the XBRL Challenge contest to promote new applications for using XBRL data is Calcbench, an open-source application that consumes corporate XBRL data and performs comparative analytics.

Calcbench enables instant, online retrieval of XBRL data organized by company, industry and size. It provides comparability across ...More]]>

The winner of the XBRL Challenge contest to promote new applications for using XBRL data is Calcbench, an open-source application that consumes corporate XBRL data and performs comparative analytics.

Calcbench enables instant, online retrieval of XBRL data organized by company, industry and size. It provides comparability across time and companies, with benchmarking to sector and industry, and it enables data to be analyzed and shared. The judges chose Calcbench because it features a strong user interface and analytics, allowing users to perform multi-company comparisons annually and quarter-to-quarter. The judges also liked that the tool allows users to add their own notes and formulas, export to Excel, and share the work with others.

"Among a very strong pool of applications, the judges chose Calcbench because it offers the broadest appeal and the most comprehensive use of data with XBRL and other sources, all within a simple interface that's easy to use,” said Paul Ratnaraj, director of advanced initiatives at Wharton Research Data Services and a judge for the contest. “It also offers a good framework on which to build other analytical tools."

XBRL US launched the XBRL Challenge in July 2011 to raise awareness of XBRL, especially among prospective users, and to inspire the creation of a new generation of tools that would promote adoption and help make XBRL as useful as possible. The contest drew 84 applicants, which ultimately led to 15 submissions.

Calcbench was co-founded by Pranav Ghai in New York and Alex Rapp in Cambridge, Mass., both with backgrounds in financial services. "The best moment in the development process for us was when we realized we'd created a tool we suddenly couldn't live without," said Ghai.

In addition to the $20,000 grand prize for Calcbench, the judges also acknowledged another entry, Dynamic Earnings Model, with a “People’s Choice” designation. It is an application that automatically generates a valuation model from XBRL data, allowing analysts to flexibly define a more sophisticated model using any element in the XBRL Taxonomy without requiring programming knowledge.

Other finalists included:

• Advanced XBRL Processing by OXIDE Solutions – an open-source, cloud-based or locally installed set of services that process XBRL filings and provide a platform to view, design and publish analytical reports from the XBRL data and external sources.
• Arelle® – an open-source XBRL platform that supports full XBRL 2.1, dimensions, formula, versioning, and table linkbase extensions.
• XBRL to XL – which enables downloads of "analyst ready" XBRL data into Excel via the web for multi-filing comparisons across companies or over time; and
• XBurble – a desktop application that allows comparison over multiple filings across companies.

Overall, companies are providing high-quality submissions ...More]]> The SEC’s Division of Risk, Strategy, and Financial Innovation has updated its guidance for XBRL filings, based on its observations through the second quarter of 2011, to remind filers of some common errors that seem to persist.

Overall, companies are providing high-quality submissions and appear to be devoting significant resources to assuring their XBRL submissions are accurate and complete, according to the staff. That’s the good news. The bad news, however, is that companies seem to be making the same mistakes that the staff has already highlighted and tried to correct.

The two big areas of concern are problems with negative values and an inappropriate focus on the physical rendering of the submission. The staff says some preparers still haven’t fully grasped that the taxonomy definitions include concepts of positive and negative values, so the numbers that are entered already reflect positive and negative values.

When filers add a negative to a number that is already defined in the taxonomy as negative, the reported figure is wrong. The staff guidance includes a detailed explanation of how debits and credits work in the XBRL world, hopefully putting to rest confusion over positive and negative values.

“Although numbers shown in the HTML attachments of an EDGAR submission may be presented as negative, they should almost always be entered as positive numbers in the XBRL instance attachment,” the guidance says. “The most common error filers make is to incorrectly enter an amount with a negative value. Most XBRL tagged numbers are positive even if the value is presented with brackets on the printed financial statements.”

The staff guidance also says filers are too fixated on the physical appearance of their XBRL financial statements, especially newer filers who are still learning how XBRL works. The staff still finds a disturbing number of instances where filers have created extensions solely to achieve a particular alignment of rows and columns to make their XBRL submissions look just like their HTML financial statements. That’s not necessary, the staff points out, or even appropriate.

“Filers should concentrate on the quality of the tagging rather than trying to match the rendering of the XBRL exactly to the HTML filing,” the guidance says. “Furthermore, filers should not create custom elements or use incorrect dates in their contexts just to achieve specific rendering results.”

The rendering might be helpful for spot checking to look for whether tag selections are complete and proper, although it’s not even the best tool for that process, the guidance says. The staff suggests companies check with their service providers or software vendors to determine the best way to check for proper and complete tag selections.

On the upside, the guidance makes it clear that companies are doing a better job of searching the taxonomy and finding appropriate tags to describe items in their financial statements rather than jumping to extensions when they don’t readily find a perfect fit.

In the SBR architecture the SBR Definitional Taxonomy layer contains the item, common tuple, ...More]]> The use of XBRL in Australia is being led by a government initiative, the Standard Business Reporting (SBR) project. Several hundred regulatory forms from various government agencies now have XBRL 2.1 Taxonomies incorporated into a common architecture.

In the SBR architecture the SBR Definitional Taxonomy layer contains the item, common tuple, dimension and dimension member definitions. Taxonomy files in this layer are used to build the taxonomies for each agency's forms, called Reporting Taxonomies. Each reporting taxonomy defines form specific definitional and presentation linkbases using concepts in the SBR Definitional Taxonomy.

The SBR architecture also provides Web Services where the SOAP message payload is an XBRL instance conforming to a particular reporting taxonomy. This has allowed the development of software packages that provide for electronic submission of the regulatory forms.

At this stage, form submissions to the Australian Prudential Regulation Authority (APRA) are performed using their Direct 2 APRA (D2A) software. This is due to the complex validation infrastructure which compares newly submitted data against values submitted in other forms and reporting periods. XBRL instances can be submitted to APRA using the D2A XBRL import facility.

The initial use of XBRL in Australia's regulatory environment has been as an alternative submission format. This provided a challenge in the development of the SBR XBRL Taxonomies because these taxonomies had to cater for the complexities in the existing forms. For APRA, the scale of the challenge was three hundred and fifty forms.

As an aid to understanding the XBRL taxonomies APRA developed a set of on-line documentation , called Plain English Taxonomy (PET), that exposes the XBRL taxonomy information and how that information maps to the data entry screens in the D2A software. It is envisaged that this documentation will assist reporting entities in adopting XBRL for their regulatory submissions.

The future for the use of XBRL in Australia has been boosted by the recent government announcement that the use of the SBR platform will be mandated for superannuation industry transactions.

The PET documentation can be viewed at: http://apra.gov.au/sbr-pet

More information about the SBR Project is available at: www.sbr.gov.au

by Bill Donoghoe

The International Integrated Reporting Council published a discussion paper, Towards Integrated Reporting, Communicating Value in the 21st ...More]]> The Institute of Management Accountants is advocating the use of XBRL to facilitate broader adoption of integrated reporting to give stakeholders a deeper understanding of a company’s performance and prospects for future success.

The International Integrated Reporting Council published a discussion paper, Towards Integrated Reporting, Communicating Value in the 21^st Century, making the case for integrated reporting and calling for feedback on how to drive acceptance and adoption. The IIRC defines integrated reporting as bringing together material information about an entity’s strategy, governance, performance, and prospects in a way that reflects the commercial, social, and environmental context in which it operates.

Looking well beyond the financial performance conveyed in a typical set of financial statements, an integrated report would provide a clear and concise understanding of how an entity creates and sustains value while also demonstrating good stewardship of its resources, according to the IIRC. The IMA’s XBRL Committee answered the discussion paper by pointing out that XBRL is the perfect tool to facilitate such reporting and drive more widespread adoption of it.

The IMA XBRL Committee is a standing advisory committee reporting to the IMA board, made up of experts in XBRL, internal and external corporate reporting, accounting and other standards, information technology, market adoption, research and academia. The committee says XBRL is already used by companies representing more than 75 percent of the world’s market capitalization for reporting financial information, making it the logical choice for extending the benefits it provides to financial reporting to the full scope of integrated reporting.

Brad J. Monterio, chair of the XBRL committee, said analysts, investors, regulators and even management are increasingly realizing that financial information alone is not enough to present a full picture of market performance. A growing number of hedge funds, venture capital funds, and private equity funds are paying close attention to integrated reporting, he said. “In some cases, they are looking only at companies that prepare this information,” he said.

The IIRC discussion paper is a platform for developing an integrated reporting framework for the global marketplace, Monterio said, so the IMA committee is looking at the framework from an XBRL perspective. “It’s a logical conclusion that if XBRL is becoming the standard for financial information to make it usable, can the same benefits be applied to nonfinancial information?” he said.

The IMA is encouraging the IIRC to develop an XBRL taxonomy in tandem with any integrated reporting framework to facilitate a more streamlined adoption. “CFOs and executive team members need to be aware that integrated reporting is the next stage of corporate reporting and the marketplace is placing value on this information.”

The consortium’s Best Practices Board wants to develop a comprehensive guideline document for taxonomy development to ensure interoperability. The document would be ...More]]> XBRL International is looking for some XBRL experts, especially those who have experience with taxonomies, to join a task force to help develop and disseminate some taxonomy architecture guidance.

The consortium’s Best Practices Board wants to develop a comprehensive guideline document for taxonomy development to ensure interoperability. The document would be targeted at those working with taxonomy architecting, especially those with limited or no knowledge of XBRL and taxonomies, to relate some common principles of taxonomy architecting.

Shweta Gupta, BPB member who authored the invitation to participate in the Taxonomy Architecture Guidance Task Force , writes that the guideline document would define the various taxonomies that have been built catering to various domains, common and key principles that define architecture of the taxonomy, and the impacts of adopting a specific structure of taxonomy. Such a document is essential given the change face of business reporting and the pace of XBRL adoption occurring worldwide, he writes.

To be successful, the task force should consist of national and jurisdictional taxonomy owners to assure interoperability issues are addressed, ultimately increasing the effectiveness and data re-usability of XBRL, Gupta writes. The board could conduct a preliminary study to outline the various XBRL taxonomies created around the world, providing some high-level comparison of their architecture and properties. Gupta envisions such a study would demonstrate a need for streamlining taxonomy architecture and defining globally accepted practices for taxonomy architectures and development.

The board envisions using XBRL International’s conference in Abu Dhabi as a platform to present a paper on taxonomy diversity and the need for interoperability. Gupta also hopes to see an agreement among taxonomy owners to follow a documented approach. The 24th XBRL International Conference in March will include a taxonomy summit as an attempt to have taxonomy owners and stakeholders address the need for a sustainable taxonomy infrastructure and to seek a commitment to resources to be able to review and approve taxonomies and develop supportive documentation to ensure interoperability.

The most important goal for the task force will be to document the principles that are common across taxonomy profiles, identifying key factors that make the architecture work. Task force member would begin by listing various taxonomies created across XBRL adoption, then study different taxonomy architectures at the national level to create observation documents. The observations will include the task force members’ comments on the architecture, scalability, flexibility, taxonomy domain coverage, etc. Observation documents will then serve as input to the ultimate TAG document.

XBRL experts interested in participating in the task force effort must e-mail tagtf@xbrl.org by Jan. 20, 2012.

2011: a review of XBRL in the United States

The year of 2011 marks several milestones in terms of the increase in quantity and the improvement in quality of XBRL data. Such changes will lead to widespread consumption of XBRL ...More]]> XBRL is revolutionary. But until its benefits are seen, this doesn’t matter.

2011: a review of XBRL in the United States

The year of 2011 marks several milestones in terms of the increase in quantity and the improvement in quality of XBRL data. Such changes will lead to widespread consumption of XBRL data for the year 2012 and beyond.

On the quantity side:

• Starting June 15, 2011, every company listed in the United States has been required to file their financial statements in XBRL, although many large companies have been doing so for more than two years.
• Over 7,800 companies have submitted their financial statements in XBRL to the SEC.
• There are more granular data from the footnotes: XBRL Level 4 detailed footnote tagging makes more this data easily accessible.
• Many financial analysts will be satisfied if they have the most recent three to five years of financial data. Many large companies have had close to five years of XBRL data available now.

On the quality side:

• More insights, better guidance: Armed with filing data from over 5,000 first-time XBRL filers in 2011, XBRL US, the FASB, and the SEC have been identifying common errors (see SEC’s Staff Observations) and conducting dozens of trainings, webinars and workshops to help companies prepare their XBRL filings.
• More accurate and complete: With the expiration of the limited liability provisions for XBRL exhibits two years after their first mandatory submission date, public companies will  be more serious about the accuracy and completeness of XBRL-tagged data (see XBRL Assurance Committee).
• Smarter XBRL software makes validation easier for preparers.

Consumption: the new theme in 2011

The two biggest XBRL events in 2011 reflected the shift of attention from preparation to consumption.

• “Get More Out of XBRL” is the theme of the 3rd Annual XBRL US National Conference, held between Sept. 26-27 in Nashville, TN.
• “Enhancing Business Performance” is the theme of the 23rd XBRL International Conference, held between Oct. 25-27 in Montreal, Canada.

XBRL Challenge: a new push in consumption

XBRL Challenge is a contest organized by XBRL US to promote the awareness of XBRL. Participants will develop “open source analytical applications for investors that leverage corporate XBRL data”. The deadline to submit the application is Jan. 31, 2012. XBRL US will reward the final winner in February of 2012 with a grand prize of US$20,000.

Getting application developers involved in XBRL is a great idea. They can make consumption by investors easier. They can create a new generation of financial applications.

As a software developer with a finance background, I fully understand the potential of XBRL. The global standard computer language can fundamentally change how financial data is defined, organized, and exchanged. The language defines the attributes of each data and its relationship to others. The standard taxonomy defines common terms used in the dataset. The language and taxonomy are the nuts and bolts for financial application development. Financial data can be dissembled and re-assembled by computer programs. Financial analysts can interact with the richer financial dataset in new ways.

On the other hand, the XBRL standard is complex, even for software developers. Unlike HTML, XBRL uses many XML files, and each serves its own purpose. Grasping XBRL is challenging.

Challenges bring talents. Application developers will make XBRL transparent to end users. Some system or data providers may also make application developers’ life easier.

As Philip Moyer said in a recent XBRL Challenge webinar, there is a critical mass of XBRL data now. Get application developers involved. Let them play with the data. Good things will usually follow.

Let’s expect to see some amazing apps using XBRL data in 2012.

by Qinlin Luo

FERF surveyed more than ...More]]> Tier 1 XBRL filers consider the XBRL-related activity to be the biggest bottleneck in their financial reporting function, according to a recent study by the Financial Executives Research Foundation, and they consider the review process to be the most challenging part of the overall XBRL experience.

FERF surveyed more than 300 different public companies on their XBRL experiences so far and discovered Tier 1 companies find the XBRL process to be the biggest headache in their reporting function. They consider the review process and getting educated to be the most challenging aspects of XBRL. Tier 1 companies also noted that mapping and tag selection remains a challenge, but they ranked it behind the review process and education in terms of difficulty.

When ranking their concerns about XBRL generally, Tier 1 companies were most focused in 2011 on the legal liability – and with good reason as the SEC’s limited liability protection for XBRL submissions expired for Tier 1 companies this year. Nearly every Tier 1 company named legal liability as their biggest concern, but close behind they also showed some angst over the cost-benefit equation. Many of the largest companies are still skeptical that investors and other users of financial statement data are finding any real use for the data presented in the XBRL format. They also worry about having adequate resources to get the XBRL filing done on time.

Now that they’ve been at it for a few years, more than 90 percent of Tier 1 companies said their biggest concern about the tagging process specifically is how to get it done more efficiently. Distant behind that primary focus, they’re also thinking about how to control the ongoing cost of XBRL and how to better define and control the process.

Tier 1 companies worry more than smaller companies about the risk of having two different sets of financial data available to investors – that submitted in XBRL, plus their traditional HTML filings. And they worry more than smaller companies about auditor involvement in the XBRL submission.

So far, the SEC does not require an audit of the XBRL submission, although many financial reporting experts speculate it will be required eventually. An increasing number of Tier 1 companies are voluntarily bringing their auditors in to check over the XBRL submission just to add an extra layer of protection as they faced full liability for the accuracy of the filing this year.

Another interesting detail from the study: Tier 1 companies were widely dispersed in terms of how much time they spend on their XBRL submission, whether performing it in-house or outsourcing it to a third party.

Among companies that outsourced the process, 15 percent spent less than 40 hours on XBRL, 31 percent spent 41 to 80 hours, 12 percent spent 81 to 120 hours, and 32 percent spent more than 120 hours. The numbers aren’t significantly different for companies that handled the XBRL process internally: 8 percent spent less than 40 hours, 31 percent spent 41 to 80 hours, 23 percent spent 81 to 120 hours, and 38 percent spent more than 120 hours.

Committee Chairman ...More]]> Given the amount of data that must be tagged and the compressed filing time frames for public companies, XBRL tagging is having an adverse effect on reporting cycle times and review processes. At least that’s the view of the Committee on Corporate Reporting at the Financial Executives International.

Committee Chairman Loretta Cangialosi is appealing to SEC Chairman Mary Schapiro to amend certain XBRL requirements. Cangialosi reminded Schapiro that the committee has raised concerns with the SEC before about the filing time lines and cost-benefit issues related to detailed tagging of footnote information.

True, the SEC has engaged in extensive outreach with preparers, users of financial statements and XBRL service providers, she acknowledged. But the problem hasn’t gone away, she said. There’s just too much data to tag with too little time to properly tag it all and meet filing deadlines, she contends.

“Whether this activity is performed internally or outsourced to third-party service providers, the commitment of resources is significant and the effect on reporting cycle times and review processes has been adverse,” she wrote to Schapiro.

Whether companies perform the tagging in-house or outsource it to third-party service providers, companies are struggling with the reporting cycle times and review processes. “Based on current trends in the volume of disclosure provided in registrant filings, we expect this effect to become more pronounced and costly in the future,” she wrote.

Cangialosi contends only a fraction of the tagged information is actually used by data aggregators and other financial statement users. Instead, those users are primarily interested in tagged information in the basic financial statements, with only a small subset looking at the detailed tagging of specific footnotes.

“We estimate that roughly 75 percent of the volume of XBRL tagging is not actually used by investors and yet the tagging of the entire data set is contributing to delays in filings and diffusion of data preparation and review efforts across the registrant population,” she wrote. Just have a look at the number of hits on corporate websites, Cangialosi contends, where the average is in the single digits.

The committee is calling on the SEC to develop a more focused approach to detailed tagging that limits its application to the core financial statements and the standardized, comparable footnote data that is used by analysts and investors. The group also hopes to see the SEC develop a way for registrations to efficiently and effectively submit a single filing that incorporates XBRL information instead of requiring companies to continue to file both in HTML and XBRL. Cangialosi also calls on the SEC to exempt wholly owned subsidiaries that qualify for abbreviated disclosure rules from detailed tagging, especially when considering their data is consolidated to a parent company’s financial statements.

In their study of the effects of exclusive technology choice on the analysis of financial information, a trio of accounting professors found that 66 percent ...More]]> A group of academics studying XBRL acceptance have determined investors are warming up to using XBRL-enabled technology to do their research and make investment decisions.

In their study of the effects of exclusive technology choice on the analysis of financial information, a trio of accounting professors found that 66 percent of nonprofessional investors chose XBRL-enabled technology to complete a financial analysis task because they perceived it would reduce the time it would take for them to complete the task.

The 34 percent of nonprofessional investors who chose spreadsheets over XBRL-enabled technology said they preferred it because of prior experience they had using that technology. No one in the study chose document exchange software, such as PDFs, to complete the task.

The authors – Diane Janvrin of Iowa State University, Robert Pinsker of Florida Atlantic University, and Maureen Francis Mascha of the University of Wisconsin-Oshkosh – said the findings are important because recent evidence suggests investors are slow to adopt XBRL-enabled technology despite regulatory mandates that require companies to submit their financial statements in XBRL.

The study notes that some U.S. companies see the XBRL submission requirement as a compliance exercise, not one that provides any further benefit to the company itself. That suggests XBRL and its underlying technology may be under-utilized in terms of providing increased efficiency, increased reusability, and increased transparency of reported data, the authors said.

Acknowledging some limitations to their study, the authors said participants had only three reporting technology options to choose from, but in real life they likely have others. The experiment assumed a cost-free investing environment, and it failed to take into account that nonprofessional investors in the real world likely would have to purchase XBRL-enabled tools, while PDFs and spreadsheets are probably right at their fingertips. The study also assumed the nonprofessional investors would have a basic working knowledge of the underlying format of financial statements, which is probably not the case for all nonprofessional investors.

The authors say the results of their hypothesis testing provide evidence that nonprofessional investors are drawn to efficiency in performing tasks necessary to make investing decisions, and that means they are more likely to choose XBRL-enabled technology. However, they point out that the study suggests acceptance of the technology, not necessarily usage. The authors recommend future study that would further zero in on other factors or variables that might drive investor use of XBRL-enabled technology.

Hoffman is often credited with founding the concept of XBRL and inspiring the American Institute of Certified Public Accountants to invest in developing it. He has been ...More]]> In his continuing dig into XBRL submissions to assess utility and functionality, Charles Hoffman is finding income statement data hard to figure out.

Hoffman is often credited with founding the concept of XBRL and inspiring the American Institute of Certified Public Accountants to invest in developing it. He has been studying more than 5,500 XBRL filings to the Securities and Exchange Commission to get a sense of the semantic model of financial reports that XBRL produces.

The assessment of the balance sheet and the cash flow were straightforward enough, he said. But the income statement is a lot more challenging. In fact, he calls it maddening.

“The income statement has a lot more moving parts,” he said. Not all income statement elements apply to all filers in the same way. Items like income from operations, discontinued operations, noncontrolling interests, extraordinary items, perhaps even income taxes make it impossible to build a one-size-fits-all income statement.

That makes it hard for filers to sort through the GAAP Taxonomy, he says, and find the concepts that are appropriate to their particular data. If companies had a series of examples to follow, it might give them a clearer roadmap to submitting data that would ultimately be more comparable, he says.

The income statement also doesn’t carry subtotals in the same way as the balance sheet or the cash flow statement, making it more difficult at time to cross reference or verify numbers, he said. All of that, combined with the nature of XBRL user software, makes it difficult for users of income statement data to find what they might be looking for, he said.

To illustrate, Hoffman says he has discovered that filers are generally using three different concepts in the Taxonomy to report net income or loss. He worries perhaps there is too much ambiguity as to which of the three most chosen concepts should be used under different reporting scenarios.

Of nearly 4,000 filings he has examined, nearly three-fourths report income (or loss) from continuing operations before taxes, but a wide variety of labels are used, and many filers even created extensions for this concept, giving it the exact same name as the concept provided by that name. Hoffman wonders if some filers carried it forward from an earlier XBRL submission when the taxonomy in place did not have a concept for this item.

He found revenue for 84 percent of the filings where he searched for it. He’s pretty sure the other 16 percent report revenue somewhere, but he’s just not sure where. “There are so many different ways to report revenue,” he said. Some companies provide a total for revenue, making it easier to find, but some do not, making it much more difficult to find, he said.

Hoffman said he’s hopeful his exercise will help practitioners focus more on how to make XBRL more consistent across companies and therefore more useful to users of financial information.