Breaking Down XBRL-based Financial Reports

Friday, May 11, 2018 at 08:58AM
Charlie in Creating Investor Friendly SEC XBRL Filings

I am analyzing the last 10-K of each of 5,734 public companies that submitted financial reports to the SEC as of March 31, 2018.  This number of filings "5,734" differs from the two sets of that I measured in my quarterly analysis of public company reports.

My analysis of the fundamental accounting concept relations is for the LAST REPORT FILED and that last report could be a 10-K or a 10-Q. That total is 5,856.  The reason I use the last report filed is because fundamental accounting concept relations could have been fixed since the companies last 10-K. (Here is a comparison of fundamental accounting concept relations measurements for the past three years.)

My analysis of the reporting checklist and disclosure mechanics is for the LAST 10-K reported, but when I ran that analysis XBRL Cloud was inadvertenly including 272 funds and trusts in that list which I did not want to work with, so that total is 6,006. (Here is a summary of the reporting checklist and disclosure mechanics measurements which I just started in March 2018.)

But for the analysis I am doing now I am working with the 5,734 10-Ks of public companies as of March 31, 2018.

Here is some information about that set of 5,734 XBRL-based financial reports.

• There are 7,948,552 facts reported by those companies in those 5,734 reports.
• The average report contained about 1,386 facts.
• The report with the most number of facts reported 29,247 facts.
• The report with the least number of facts reported 14 facts.
• The reports contained 447,715 networks which are used to organize those facts into sets.
• The report with the must number of networks provided 310 networks.
• The report with the least number of networks provided 1 network.
• The reports contained 5,553,445 presentation relationships (which I call the model structure) between the Networks, Tables, Axis, Members, LineItems, Abstracts, and Concepts that were used to represent the information in the reports.
  • 5,553,245 of those relations were as expected
  • 200 of those relations were inconsistent with expectation meaning that there was some sort of mistake, this is down from prior year measurements.

In those 5,734 10-K financial reports there were 311,000 text blocks reported using concepts from the US GAAP XBRL Taxonomy.  There were about 964 different text blocks that fell into three SEC/FASB categories:

• Level 1 Note text blocks that were used to represent entire notes.
• Level 2 Policy text blocks that were used to represent individual accounting policies.
• Level 3 Disclosure text blocks that were used to represent individual disclosures.

I am not analysing the Level 4 Disclosure Detail here. I compare Level 4 Disclosure Detail and Level 3 Disclosure Text Blocks here.

What I am doing here is to compare how public companies use specific text blocks.  Here is information about those text blocks:

• Here is a complete list of different text blocks in the US GAAP XBRL Taxonomy (note that this is the 2018 taxonomy, it is slightly different than the 2017, 2016, and 2015 which were used to submit reports)
• Here is a list of 17 text blocks that I have created comparisons for every public company that uses each specific text block to see HOW they are using it.
• Here is one comparison, the Nature of Operations Level 1 Note text block.

What is very useful about these comparisons is that you can see how different public companies use these text blocks. I did a specific analysis of the Level 3 Disclosure text block related to the disclosure of the components of property, plant, and equipment.  See the full comparison here. Here are some individual observations:

1. Most public companies use the text block "us-gaap:PropertyPlantAndEquipmentTextBlock" to represent the components of PPE which tends to look like this.
2. A good chunk of public companies include the estimated useful lives of each category of PPE in that text block, which tends to look like this.
3. A small minority use that text block to disclose ONLY the estimated useful lives of PPE categories.
4. A small minority include depreciation expense AND the breakdown of PPE components.
5. A minority include PPE components in their PPE policy text block.

Clearly all of these four cannot be considered correct.  My personal view is that #1 is correct.  #2 should be broken down into TWO separate disclosures in my view; one for the roll up of PPE components and another for the estimated useful lives.  #3 clearly cannot be considered correct, it does not match what most public companies do and it does not match the documentation of the text block.  #5 likewise is clearly not correct, PPE components go into the level 3 disclosure text block not the policy.

What causes these sort of issues is a "presentation" orientation when thinking about how to represent these disclosures.  If a "representation" of information orientation were taken, how things should be represented becomes more clear.

What do you think?  More analysis coming, so stay tuned.

Article originally appeared on XBRL-based structured digital financial reporting (http://xbrl.squarespace.com/).