It’s been observed that detailed tagging can create up to 10 times more tagging concepts than block tagging. Does it mean 10 times the work? It depends. There’s no doubt that detailed tagging creates more complexity, but the workload doesn’t have to grow exponentially.
Why? You can’t simplify XBRL itself, but you can simplify your disclosures. Not all data are created equal—different data points do not necessarily deliver the same value to users and investors. Streamlining your 10-Q and 10-K filings will not only make life easier for you downstream, it can also translate to real value and transparency for your company.
Before you roll your tags forward for the next quarter, whether for block or for detailed tagging, repeat the mantra, “simplify, simplify, simplify,” and consider these tips for boosting your XBRL data efficiency:
Apply your SEC S-X rules for required line items. Determine which line items must be broken out for each financial statement and condense the others, if possible. Check for all comparative periods and your 10-K to ensure consistency.
Maintain the accounting concept in its pure form. Use the narrowest tag definition to map your accounting concept and consider reclassifying immaterial items into a general or miscellaneous category. This will enable “flow-through” elements (facts that appear in multiple places) to tie-out between your core financials and footnotes throughout your XBRL files.
Restructure footnotes and mirror them in accordance with the taxonomy hierarchy. This will avoid the use of unnecessary extensions on footnotes (for example, you might be able to consolidate the different types of stockholders’ equity into one footnote).
Centralize your significant accounting policy under one footnote. Identify all your significant accounting policies embedded in other footnotes and consider reorganizing them into one central footnote to facilitate review and tagging completeness.
Convert numbers within narratives to tables. A picture (or table) is worth a thousand words. This will enhance presentation, tagging completeness and efficiencies.
Last but not least: whatever you do, always get buy-in from your auditors, disclosure/audit committee and investor relations team—you want to reset expectations to avoid surprising them.
There is no cookie-cutter approach to redesigning your SEC filings—it’s more of an art than a science. Remember, it’s quality, not quantity, that counts.
However you look at it, when it comes to XBRL, less is indeed more.
