It was a dark and rainy night. She toiled way past normal quitting time for all but accountants with Securities and Exchange Commission (SEC) filings deadlines looming. Cranking away on her first XBRL SEC filing, Debbie became quite frustrated. "I know what is supposed to go into all of these "other" accounts, but XBRL just doesn’t care," she lamented. You see, Debbie is the accountant who knew too much.
Debbie is not alone. In a recent conversation with Louis Matherne, former XBRL International President and Director, XBRL Services for Clarity Systems, the situation described above is actually a common occurrence for accountants tagging XBRL filings for the first time. He suggested a simple example:
The company balance sheet says "prepaid expenses and other". "Other" is there because it represents several accounts that aggregated to the balance sheet become immaterial as separate items. The registrant, however, knows what it is and thinks they should create a new taxonomy concept that better captures the details of "other". No where in the financial statements or footnotes to the financial statements do they describe what that ‘other’ is."
The object of using XBRL for compliance with the SEC mandate is to present the company’s required financial statements and footnote disclosures, not to expose the preliminary accounts and internal decisions the led to the final, top level reports. XBRL is not meant to extend, expand or further explain legal filings. It simple puts your disclosures into a machine readable form. The last word comes from Matherne: "XBRL for the SEC is primarily about the disclosure of the accounting".
The US GAAP XBRL taxonomies can be found here.
The Accountant Who Knew Too Much