Understanding the Need for Exemplars for SEC XBRL Filings
Wednesday, April 6, 2011 at 02:04PM
Charlie in Creating Investor Friendly SEC XBRL Filings, Modeling Business Information Using XBRL

So of course you are asking, "What the heck is an exemplar?"  Well go to this web page and click on "Show Specific Examples", those are exemplars. An exemplar is a $50 word for example. When I was trying to figure out the right word to use, I considered these three terms:

The three definitions seem a bit circular, each one referencing the other. Reading all three gives you a really good idea of what an exemplar is and why these might be quite useful for the creation of SEC XBRL financial filings. Think of an exemplar as an "undisputed example".

Reading the US GAAP Taxonomy itself will not help you create a proper SEC XBRL filing. The taxonomy takes exactly the opposite approach of what is needed in my view. It packs every option into one model and you have to figure out which one to use from that.

Looking at other SEC XBRL financial filings can be helpful, but today it is hard to differentiate a good filing from a not-so-good filing.  Eventually I see actual filing serviing as models.  This is just like Accounting Trends and Techniques is used today (or how my XBRL Trends and Techniques will be used eventually).

Granted, it is just a start. And I won't hold these out as "undisputed" just yet.  But if you consider these two small balance sheet samples, you will see why this is useful. In my analysis of 1474 SEC XBRL filingsI noticed that, throwing out filers who used partners' capital and the ones which were obviously incorrect, 732 of the filings used "us-gaap:StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest" to express total equity and 596 used the concept "us-gaap:StockholdersEquity".  Now, don't jump to any conclusions by looking at the concept name. Names are meaningless.  What matters is first the definition, second the references and third to a smaller degree the label of the concept.  But, those numbers are rather close all things considered.  Perhaps they simply flipped a coin.

There is way more variabilty on the income statement. Now, if you have preferred stock and pay dividends, have a noncontrolling interest, have discontinued operations, have an extraordinary item, have an equity method investment and pay taxes; then it is pretty easy to figure out what concepts to use on your income statement.  But now look at this from the other perspective and how you might assign concepts to in your SEC XBRL financial filing if you had none of those.  Or what about the various possible permutations and combinations.

Eventually we will have undisputed examples, exemplars, of the right way to create SEC XBRL financial filings.  Until then, be careful.

Article originally appeared on Intelligent XBRL-based structured digital financial reporting using US GAAP and IFRS (http://xbrl.squarespace.com/).
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