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XBRL Report: Significance of tagging numbers with appropriate sign in XBRL

  • 20 Aug 2013
  • XBRL Reporting

The sign of amounts reported in financial statements plays a vital role in XBRL. To tag a fact, it is essential that we use the element with accurate balance type (Debit/ Credit) and the correct sign. The sign of the reported value should be captured correctly in conformity with the definition of the element used. We need to achieve the following objectives in preparing the XBRL statements:

  • Reporting a value in XBRL instance document with the appropriate sign that complies with the balance type of tagged element and
  • Reporting a value in SEC viewer with the same sign as reported in HTML document. This is very important since the readers of the XBRL interactive data will not open the XML but will only view the data in SEC previewer.

Line items are added or subtracted to arrive at the net amount in a financial table, as shown in Table-1.  I have detailed three scenarios in this blog to showcase how to apply apporopriate sign in XBRL to convey true meaning of the facts.

Table-1:

As on Sep. 30, 2012

As on Sep. 30, 2011

Long term debtLess: Current portion of long term debtLong term debt, non-current

20,254

(8,106)

12,148

10,157

(3,560)

6,597

 

“Current portion of long term debt” is reported as negative and the taxonomy element used is “Long-term Debt, Current Maturities” which has a credit balance. This line item is deducted from the Gross Long term Debt to arrive at Long-term debt, non-current portion. If the current portion is tagged as it is with negative sign, it will be considered as debit (negative credit) and it will convey the opposite meaning to XBRL users. To avoid such inaccurate reporting, it is important to flip the sign of the values related to current portion tag or tag such values without the negative sign.

This concept becomes complex when values are reported with different signs for various periods. For example,the previous period has net profit and the current period has net loss, as shown in Table-2.

Table-2:

3 months ended Sep. 30, 2012

3 months ended Sep. 30, 2011

Net income (loss)

(1,387)

1,566

 

In the above table, net income is reported for the previous period and net loss for the current period. Dual direction elements in Taxonomy are used for handling such scenarios in XBRL tagging. Let us say, we use the element “Net Income (Loss) Attributable to Parent”. Balance type is assigned for any dual direction element based on the first label in the element. First word in the above label is “Income” and hence the balance type will be credit for this element. The sign of the values has to be in compliance with standard label of dual direction elements . In the case of Data provided in Table-2, Income is reported as positive and loss as negative, in conformity with standard label of the element. In  this case, there is no need to flip the sign to capture values for XBRL.

Let us consider an example in Table-3 where there is a necessity for flipping the signs to report the fact accurately.

Table-3:

3 months ended Sep. 30, 2012

3 months ended Sep. 30, 2011

Net Income (Loss)Less: (Income) Loss attributable to Non-controlling interestNet Income (Loss) attributable to parent

254

(16)

238

(157)

    10

(147)

 

  • Element for the first line item is “Net Income (Loss), Including Portion Attributable to Non-controlling Interest” which is assigned with credit balance. As per the element, the income should be captured as positive and loss as negative. The sign of the reported values is in compliance with the element used. There is no need to flip the sign. The same explanation applies to third line item.
  • Scenario changes when it comes to second line item “(Income) Loss attributable to Non-controlling interest”. Income is shown as negative value and loss as positive value to convey that this line item is added or subtracted to arrive at “Net Income (Loss) attributable to parent”. Though this is valid from reporting entities’ point of view, the sign of the values captured for XBRL should be in compliance with taxonomy element. Hence, we should select  “Net Income (Loss) Attributable to Non-controlling Interest” (debit balance) element. As per the element, Income should be captured as positive and Loss should be captured as negative.

When the values are flipped and tagged for XBRL to conform to standard label of elements, we achieve the objective of preparing a valid XBRL instance document to file with the SEC. However, this does not end here. When an XBRL document is rendered in SEC viewer (which is open to public), the sign of the values appears different when compared to the Edgarized HTML document. For example, “Current portion of Long term debt” in Table-1 will be reported in SEC viewer as $8,106 and $3,560 for current and previous periods respectively. This is inconsistent with Edgarized HTML document. Hence, there is a need to achieve another objective; the sign of the values in XBRL should be consistent with Edgar document. “Negate label” helps those preparing the financial statements to achieve this objective. When a negate label is applied, SEC viewer flips and renders the sign of the value tagged in XBRL instance document. When we use negate label for the above element, values would render as ($8,106) and ($3,560) in SEC viewer.

By following the logical accounting and mathematical steps explained above, you can easily create tags with accurate signs in your XBRL report.

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