Understanding SEC XBRL Financial Filings

(NOTE: An understanding of information on the page Digital Financial Reporting is helpful in understanding the information explained on this page.)

This page provides a collection of resources which are helpful in understanding SEC XBRL financial filings with the purpose of better understanding these filings. This collection of resources helps you explore these SEC XBRL financial filings to better understand digital financial reporting.

Fundamental accounting concept relations: Reasons Why Fundamental Accounting Concept Relations Fail

This set of documents provides information which is useful in interpreting fundamental accounting concept relation violations:

  • Overview: Interpretation of Fundamental Accounting Concept Test Results
    • Fundamental accounting concepts: This is a list of the fundamental accounting concepts and the relations between those concepts.
    • Mapping rules: This is a human readable version of the mappings between the fundamental accounting concepts and US GAAP XBRL Taxonomy Concepts.
    • Imput rules: These are the rules used to impute facts which have not been reported within a financial report.
    • Required to be reported and allowed to be extended: Some concepts may be required to be reported, others are optional.  Some concepts may be extended, others may not.  The point is that concepts behave differently.  Be aware of this.
  • Pass all tests: A good way to understand the reasons why reporting entities do not conform to these fundamental accounting concepts is to understand why they satisfy all of these fundamental relations.  This document walks you thorugh that process.
  • Example Analysis of Conformance Test: This is an analysis of one fundamental accounting concept conformace test.  It helps you understand how to think about these tests.  This shows an analysis of IS3.  This same sort of analysis can be done for every one of these fundament accounting concept relation rules/tests.
  • Balance sheet
    • BS1: Equity = Equity Attributable to Parent + Equity Attributable to Noncontrolling Interest
    • BS2: Assets = Liabilities and Equity
    • BS3: Assets = Current Assets + Noncurrent Assets (classified balance sheet)
    • BS4: Liabilities = Current Liabilities + Noncurrent Liabilities (classified balance sheet)
    • BS5: Liabilities and Equity = Liabilities + Commitments and Contingencies + Temporary Equity + Redeemable Noncontrolling Interest + Equity
  • Income statement
    • IS1: Gross Profit = Revenues - Cost of Revenues
    • IS2: Operating Income (Loss) = Gross Profit - Operating Expenses + Other Operating Income (Expenses) (Multi-step approach)
    • IS3: Income (Loss) from Continuing Operations Before Equity Method Investments = Operating Income (Loss) + Nonoperating Income (Loss) - Interest And Debt Expense
    • IS4: Income (Loss) from Continuing Operations Before Tax = Income (Loss) from Continuing Operations Before Equity Method Investments + Income (Loss) from Equity Method Investments
    • IS5: Income (Loss) from Continuing Operations after Tax = Income (Loss) from Continuing Operations Before Tax - Income Tax Expense (Benefit)
    • IS6: Net Income (Loss) = Income (Loss) from Continuing Operations After Tax + Income (Loss) from Discontinued Operations, Net of Tax + Extraordinary Items, Gain (Loss)
    • IS7: Net Income (Loss) = Net Income (Loss) Attributable to Parent + Net Income (Loss) Attributable to Noncontrolling Interest
    • IS8: Net Income (Loss) Available to Common Stockholders, Basic = Net Income (Loss) Attributable to Parent - Preferred Stock Dividends and Other Adjustments
  • Statement of comprehensive Income
    • IS9: Comprehensive Income (Loss) = Comprehensive Income (Loss) Attributable to Parent + Comprehensive Income (Loss) Attributable to Noncontrolling Interest
    • IS10: Comprehensive Income (Loss) = Net Income (Loss) + Other Comprehensive Income (Loss)
  • Cash flow statement
    • CF1: Net Cash Flow = Net Cash Flows, Operating + Net Cash Flows, Investing + Net Cash Flows, Financing + Exchange Gains (Losses)
    • CF2: Net Cash Flows, Continuing = Net Cash Flows, Operating, Continuing + Net Cash Flows, Investing, Continuing + Net Cash Flows, Financing, Continuing
    • CF3: Net Cash Flows, Discontinued = Net Cash Flows, Operating, Discontinued + Net Cash Flows, Investing, Discontinued + Net Cash Flows, Financing, Discontinued
    • CF4: Net Cash Flows, Operating = Net Cash Flows, Operating, Continuing + Net Cash Flows, Operating, Discontinued
    • CF5: Net Cash Flows, Investing = Net Cash Flows, Investing, Continuing + Net Cash Flows, Investing, Discontinued
    • CF6: Net Cash Flows, Financing = Net Cash Flows, Financing, Continuing + Net Cash Flows, Financing, Discontinued
  • Report Frames (i.e. different industry/activity reporting styles and filer presentation styles): Most companies are commercial and industrial, about 85% of public companies.  However, there are industries/activities which have specific reporting styles.  Also, some companies report using a single step income statement and others use a multi-step approach.  Some companies report operating income (loss) while othere so not.  Each of these groupings is called a "report frame":
  • Disclosures (handful of examples)
  • Other information: This is other helpful information to help you think through the process of the reasons why fundamental accounting concept relations tests fail.
  • Digital Disclosure Checklist Summary: The fundamental accounting concepts are useful, but only an example of where all this is headed.  Digital financial reports are not useful if 22 relations are correct, there are thousands of relations in every financial report.  This Digital Disclosure Checklist Summary will help you realize where all this is headed.

Other important foundational resources:

US GAAP Taxonomy (2013), commercial and industrial companies
These are various versions of the US GAAP Taxonomy (2013):

  • Accounting Standards Codification: Link to the accounting standards (Accounting Standards Codification or ASC) published by the FASB.  (Note that registration is required but free for basic access.)
  • HTML pages: Easy to read, flat set of HTML pages of the "as released" US GAAP Taxonomy.
  • Excel-based taxonomy explorer: Load US GAAP Taxonomy information into Excel. This includes the 2013 US GAAP Taxonomy and numerous other taxonomies.
  • Reporting templates: Set of reporting templates which can be used when creating SEC XBRL financial reports (prototype).