Staff members at the Securities and Exchange Commission are mildly impressed with interactive data financial reports they've reviewed so far, but they also have some suggestions on how they could be improved.

The SEC's Division of Risk, Strategy, and Financial Innovation reviewed financial reports submitted in eXtensible Business Reporting Language submitted during the first two months of 2011, which included 10-Ks from large accelerated filers. The staff said overall it appears filers are devoting significant resources to comply with the rules, complete the XBRL submissions, and make them high quality.

The staff offered some suggestions on where companies could do a better job with the XBRL filings, and it encouraged companies to pay attention to those suggestions, especially as they face more detailed tagging requirements in subsequent years and as their protection from liability phases out. To give companies time to learn how to use XBRL, the rules require companies to submit progressively more detailed information over three years before they are subject to full liability for complete, accurate, timely filings.

The report highlights staff concerns about how companies are formatting the XBRL financial statements, how they are tagging negative values, and how they decide when it is appropriate to use a custom extension rather than a tag defined in the Taxonomy for Generally Accepted Accounting Principles. The taxonomy provides thousands of detailed tags meant to represent virtually every GAAP requirement; companies can create extensions, or custom tags, for elements they can't find in the taxonomy, but the SEC has advised companies to create such extensions sparingly for only truly unique items.

The staff says new filers often worry that the XBRL financial statement must look identical in format to their HTML financial statements. Worry no more, says the staff report. “Filers should concentrate on the quality of the tagging rather than trying to match the rendering of the XBRL exactly to the HTML filing,” the report says. “The rendered version of the XBRL financial statements need not exactly match the HTML statements.”

Preparers also struggle with how to present negative numbers, the report says. Negative numbers may be negative in HTML filings, but XBRL tags are almost always defined as positive numbers. The staff says preparers often enter amounts as negative values, leading to inaccuracies. It advises companies to read tag definitions carefully to comprehend where negative values are already built into definitions. As examples, the staff highlights key language that could indicate where tags are already meant to convey negative values. Those phrases include: increase decrease, provided by used in, net, change in, proceed from payments for, proceeds from payments to, gain loss, profit loss, income expense, per share, equity, or retained earnings.

Finally, the staff advises preparers to be cautious about using extensions, which make it more difficult for users to compare that data to other companies' results. The report says companies should use software to search the taxonomy for appropriate tags and create extensions only when there's a material difference between the data to be reported and standard GAAP tags. Extensions should not be used to achieve a particular format or appearance to the XBRL data, the report says.