The reporting quality of your financial statements can be improved by fully utilizing XBRL calculations. However, there are limitations SEC filers need to understand about XBRL calculations that are rarely discussed. Our goal is to shed light on this problem to improve your XBRL filings and simplify your SEC filing process. The main limitations of XBRL calculations deal with Period Type, Balance Type, and Dimensions.
One of the requirements for calculations is that any concept you use must have the same period type as any other concepts using the same calculation. This means for your line items you need to have instants add up to instants and durations add up to durations.
Yet in many financial tables, this doesn't always make sense. For example in most stockholders’ equity statements, you'll start off with a balance, which is an instant. You will then have a number of duration line items over a period of time, and then finish with the ending balance, which is also an instant. While it would make sense logically to sum these concepts, due to the restriction on period type it cannot be correctly modeled in XBRL and must be skipped.
The next issue with XBRL calculations deals with balance type. The rule says that any concept adding up to the result concept must have the same balance type as the result concept, whereas any concept that is subtracted must have the opposite balance type as the result concept. For example, suppose you have the following equation:
The two concepts can be added to each other to result in the third because all three have a balance type of credit.
This rule can presents a problem in the basic accounting equation:
In XBRL, Liabilities and Stockholders' Equity are both credits, whereas Assets is a debit. Given this, the XBRL specification states that both Liabilities and Stockholders' Equity would need a negative sign before each, which doesn't work and breaks the basic accounting equation.
The last major limitation to XBRL calculations relates to the usage of dimensions. The specification says that for a calculation to apply to facts, they all must have the same context, which means they must have the same dimensions. As an example, suppose you want to show a roll-up of common stock shares outstanding, wherein Class A plus Class B equals the total. However, in XBRL Class A and Class B stocks must be dimensionalized with their own unique dimensions, thus causing the total to be dimensionless. You cannot model this with XBRL because the XBRL calculation requires that the total has the same dimension as its sub-parts.
Navigating the Limitations of XBRL
The limitations to XBRL Calculations may be frustrating, but they still provide a very useful layer of validation to your XBRL. Make sure that your XBRL tagging solution helps you navigate the intricacies and limitations of XBRL calculations to ensure your filing is accurate and complete.
One of the questions our team gets most often is “How do I make sure I select the right concept?” With Transform™ you have the tools to search for the right concepts, whether it be by period type, balance type, or part of the name or definition, to help you make sure you select the right concept.
At CompSci we understand the difficulties associated with SEC reporting and XBRL data because we work alongside filers every day. It’s one of the reasons CompSci is proud to be a customer-oriented company. When customers partner with us we understand there is no one-size-fits-all solution. Customers can use our Transform platform exclusively, our services team can help take care of your tagging and filing needs, and we also offer a hybrid of the two.