Alternative Approach to Representing US GAAP and IFRS XBRL Taxonomies

Thursday, June 13, 2019 at 09:13AM
Charlie in Becoming an XBRL Master Craftsman

The concepts, documentation, labels, and references in the US GAAP and IFRS XBRL Taxonomies are pretty decent.  There are some needed improvements, but the dictionary of concepts and associated documentation and references is very good.

But the relations in both US GAAP and IFRS XBRL taxonomies leave a lot to be desired.

Both the US GAAP and IFRS XBRL Taxonomies tend to be monolithic representations of "stuff" that is not particularly well organized, relationships are informally described (as contrast to being formally described), very important information is left out, both tend to be more internally inconsistent with how they represent things than they should be; and therefore the taxonomies are harder to use than they really need to be.

So here is a list of a significant set of the networks of information provided by the US GAAP XBRL Taxonomy.

Take the first network, the "Statement of Financial Position, Classified" or commonly referred to as the balance sheet.  Here are four methods for looking at that network of information:

• Flat list, HTML page: This is a flat list of the information output as an HTML page.
• Tree view representation: This is a representation of the information in the form of a tree or hierarchy that I generated.
• CoreFiling Yeti tree view: This is an off-the-shelf professional quality commercial tool for working with the taxonomy information.
• Workiva tree view: This is another off-the-shelf professional quality commercially available tool for working with the taxonomy information.

All the tools basically provide similar information.  Some tools have more information, some tools have less.  Some tools are good for some things and bad for other things.

But all tools fundamentally provide the same organization of that network from the US GAAP XBRL Taxonomy.  Take a look at that network, study it, and consider the following:

Is there a better way to orgainze this important taxonomy information so that it is easier for both humans and for machines to work with?

Consider the following.  What if rather than representing that information as one monolithic network, the information was represented as several smaller sets of information.  For example:

• Assets [Roll Up] and Liabilities and [Equity Roll Up]: This is two pure roll ups without other stuff intermingled within the roll up.  Clearly the XBRL calculation relations would also be provided.
• Preferred stock parenthetical information: This is the parenthetical information that is not part of the roll up; it provides additional details about each class of preferred stock.
• Common stock parenthetical information: This is the parenthetical information that is not part of the roll up; it provides additional details about each class of common stock.
• Treasury stock parenthetical information: This is the parenthetical information for treasury stock.
• Partnership alternative for equity section: This is the partnership alternative concepts that would be used instead of the stockholders equity concepts in the roll up should the reporting economic entity be a partnership.
• Limited Liability Corporation alternative for equity section and parenthetical: Similarly, this is the LLC alternative that would be used for the equity section and parenthetical disclosures should the reporting entity be an LLC.
• Partnership alternative for parenthetical information: This is the partnership alternative for the parenthetical information that a partnership would use to report.
• Dimensions information for a restatement: This is the dimensions information should you need to report a restatement.
• Dimensions for class of stock information: This is the dimensions information should you need to report class of stock information.  This has a problem though; you should never report preferred stock and common stock together.  It really should look like this: (i.e. they should be separate)
  • Preferred stock classes
  • Common stock classes

Notice how much easier that the information is to understand as contrast to having to work with the single monolithic network that is not particularly well organzed.  Also, consider what software developers need to do.  For example, suppose that your entity is a corporation.  Would you EVER use the partnership or LLC concepts?  Of course not.  Wouldn't it be nice if non-relevant concepts were simply never shown to software users?  That reduces the number of concepts that you have to sort through.

So go back and take another look at this LLC related set of concepts and the same information in this network provided with the US GAAP taxonomy.  Really look close and try and understand the information.  Notice a difference between the two?

Fiddle around with some of the other networks.

There is one additional advanced topic that I will mention.  While both the US GAAP and IFRS XBRL taxonomies define simple terms neither defines functional terms that are made up of sets of simple terms.  For example, there is no real notion of a "disclosure" in the US GAAP or IFRS XBRL taxonomy.  You have sets of concepts for form disclosures, but there is no real way to directly refer to a specific disclosure.  The closest thing to a disclosure is the Level 3 Disclosure Text Blocks.  But those are simple terms, each defines one disclosure.  Can you match that Level 3 Disclosure Text Block to the associated Level 4 Disclosure Detail?  No, you cannot.  There is no way (i.e. a functional term) that is provided to explicitly and reliably identify each Level 4 Disclosure Detail.  But what if there were?  I provide a means to do this. (See the column Disclosure Name here.)  How useful is that?  Here are examples of specific functional terms:

• Roll Forward: Property, Plant, and Equipment [Roll Forward]
• Roll Up: Assets [Roll Up]; Liabilities and Equity [Roll Up]
• Set: Preferred Stock by Class [Set]

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