Scaling in XBRL Filings: Perceived vs. Real Errors

September 9th, 2016

 

You’re scanning over your financial reports again when something small catches your eye. The balance sheet numbers seem right on the XBRL rendering, but why aren’t they scaled like on the original proof? This scenario probably sounds familiar because it is so common to see scale rendering differences between RDG’s Thunderdome Viewer and the SEC’s XBRL Viewer. It’s important to understand that this type of difference in appearance does not indicate inaccuracy.

Thunderdome Viewer closely mirrors the SEC’s rendering software and treats scaling in the same way. If a table in your original document is scaled in thousands, we assign the same scale of “in thousands” in the XBRL tagging. Below is an original balance sheet, followed by the same balance sheet in the Viewer. Notice they are scaled the same, with the phrase “in thousands” under the page header.

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However, there are times when the rendering of a table doesn’t match your original document. This happens when a number in your table is referenced in another location in your document, such as in the text of a footnote, but in a difference scale. And then, as we described in a previous article, the scaling bleeds through from the other location and into your table. Since an XBRL rendering cannot support more than one scale in a single table, the scaling of all facts in that table is then adjusted to the lowest common denominator – the scale closest to actual. You can see this happening in the following example. The original balance sheet is scaled in thousands, but the rendered balance sheet is scaled in exact dollars. Remember, the XBRL code is identical in both cases. Only the presentation is different.

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Here’s a point worth remembering: according to the SEC, the aesthetics of an XBRL rendering are always secondary to the accuracy of the data. In the examples above, the values look different but they are, in fact, the same. If the tagging is correct in the underlying XBRL, the underlying values of the financials are also correct. There is nothing to fix, and no need for adjustments to the XBRL to make the Thunderdome Viewer proof match the SEC’s XBRL Viewer presentation.

Professionals often learn the significance of presentation early in their careers, in just about everything from haircuts to slideshows. Once ingrained, it’s a hard habit to shake. Yet even the SEC addressed the issue in its December 2011 round-up of staff observations: “Filers should concentrate on the quality of the tagging rather than trying to match the rendering of the XBRL exactly to the HTML filing.” To align ourselves with this statement, our efforts and our recommendations are always focused on the accuracy of the XBRL rather than to achieve any specific rendering presentation result.