common xbrl misconceptions - certent · 2017-12-20 · common xbrl misconceptions...and the facts...
TRANSCRIPT
Common XBRL Misconceptions
...and the facts that reveal the truth
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
2
Since mandated in 2009, XBRL has caused confusion and uncertainty in financial reporting.
?
?
? ?
?
?
?
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
3
the SEC’s XBRL grace period ends.
It’s time for organizations to focus on XBRL compliance and learn the truth about common XBRL misconceptions.
October 31, 2014
On
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
4
XBRL Misconception #1
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
5
When unsure about which standard tag to use, create an extension tag.
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
6
?What’s the
reality?
???
?
?
? ? ?
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
7
Extension tags are overused.
One study reveals that
22.2% of reports from the financial industry use them.1
1 Columbia Business School Center for Excellence in Accounting and Security Analysis. Democratizing Transparency. New York: 2010. http://www4.gsb.columbia.edu/filemgr?file_id=7216992
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
8
Why is this problematic?
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
9
It undermines XBRL’s primary goal to make it easier for analysts and investors to compare companies…
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
10
…and:
Subjective extension tags leave more possibility for error, meaning extra costs for the filer.
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
11
So, what now?
Extension tags will remain, but filers should apply them with discretion.
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
12
More extensions
more manual labor & higher costs.
=
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
13
Align filings with XBRL best practices.
One Solution:
Source in-house software that o�ers access to precedents and searchable XBRL taxonomy and tags.
XBRL</>
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
14
XBRL Misconception #2
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
15
Outsourcing XBRL tagging is the best option.
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
16
?What’s the
reality?
???
?
?
? ? ?
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
17
Outsourcing has many disadvantages, meaning in-house XBRL tagging is the favorable choice.
XBRL</>
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
18
???
?
?
?
? ? ?Why?
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
19
Outsourcing is more expensive.
costlier than filing XBRL documents in-house.2
XBRL</>
30%
2 Gartner. Financial Statement Production Solution Increase Market Penetration. Stamford: 2010. http://www.gartner.com/id=1466426
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
20
XBRL</>
And…It shifts accountability from the filer to the outsourcer.This leaves room for errors and doesn’t allow for internal XBRL proficiency to grow.
XBRL</>
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
21
Other negative implications include
Security issues
Poor reporting work processes
Higher risk for errors
Longer turnaround times & potential for late filings
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
22
???
?
?
?
? ? ?So what now?
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
23
When it comes to in-house vs. outsourcing, the numbers speak for themselves…
In 2012, 50% of large accelerated filers chose to bring the tagging in-house.3
3 LogixData Analysis of XBRL Vendors and Their Market Share for 2012 and 2011. 13 Feb, 2013. http://www.logixdata.com/blog/bid/143011/Analysis-of-XBRL-vendors-and-their-market-share-for-2012-and-2011
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
24
….this is a ~25% increase from the year before.4
4 LogixData Analysis of XBRL Vendors and Their Market Share for 2012 and 2011. 13 Feb, 2013. http://www.logixdata.com/blog/bid/143011/Analysis-of-XBRL-vendors-and-their-market-share-for-2012-and-2011
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
25
XBRL Misconception #3
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
26
XBRL makes companies too transparent.
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
27
?What’s the
reality?
???
?
?
? ? ?
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
28
“XBRL in no way requires a company to change how, what, or when to report financial information. It does not provide more data than standard financial statements.”5
5 XBRL US. XBRL US GAAP Taxonomy Preparers Guide. Washington: 2008. http://xbrl.us/Documents/PreparersGuide.pdf
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
29
???
?
?
?
? ? ?Why?
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
30
Filers report the same information, but XBRL presents it in a computer readable format to make it more digestible.
XBRL
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
31
???
?
?
?
? ? ?So what now?
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
32
Filers should remember:
XBRL reporting is for the benefit of investors. Using it won’t put you at a competitive disadvantage.
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
33
For Example - Radyne Corporation
Company’s trading averages before XBRL adoption:
After XBRL adoption:
20,000 shares/day
135,000shares/day 6
6 PR Newswire. XBRL for the IRO: Benefiting from Interactive Data. PR Newswire Association LLC: 2011.http://promotions.prnewswire.com/rs/prnewswire/images/WP_XBRL_Benefiting_from_Interactive_Data.pdf
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
34
XBRL Misconception #4
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
35
SEC penalties for XBRL non-compliance aren’t a concern.</>
XBRL
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
36
?What’s the
reality?
???
?
?
? ? ?
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
37
They are.
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
38
???
?
?
?
? ? ?Why?
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
39
After this date, penalties for XBRL noncompliance will likely become harsher.
the SEC’s XBRL grace period ends.
October 31, 2014
On
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
40
…of those filings, 5,000 problems were identified.7
Last year, 1,400 XBRL filings were submitted to the SEC…
7 XBRL US. Avoiding Common Errors in XBRL Creation. Washington: 2010. http://xbrl.us/research/documents/avoidingerrorswhitepaper.pdf
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
41
???
?
?
?
? ? ?So what now?
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
42
Companies need to focus on reducing errors by making a stronger e�ort to learn XBRL inside and out.
XBRL
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
43
Taking responsibility for XBRL reporting now will mean a decreased risk for harsher SEC penalties after the grace period ends.
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
44
Read this: Find out what’s up and coming for XBRL this year. Read our whitepaper XBRL Trends to Expect in 2013
Print this: Or see who comes out on top – in-house or outsourced XBRL solutions - in this XBRL Cup Infographic
Resources
www.DisclosureNet.com | Copyright © 2013 DisclosureNet™
45
Looking for a quick, easy way to pull information from XBRL filings?
Contact us.
DisclosureNet™330 Bay Street, Suite 200Toronto, ON M5H2S8T: 866.974.3638F: 416.913.0446
General InquiriesT: 866.974.3638 [email protected]
SolutionsT: 866.974.3638 [email protected]