XBRL filings continue to contain some of the same basic mistakes that staff members at the Securities and Exchange Commission have pointed out previously, so the staff refreshed its observations in a more recent update.

The staff of the SEC's Division of Risk, Strategy, and Financial Innovation says in the big picture, companies are complying with the rules, providing high-quality submissions, and appear to be devoting significant resources to the effort. Yet, they continue to see the same common themes where there are errors. Some preparers accustomed to paper displays of their financial statements are having trouble translating their thinking into the data-interactive format, striving for a particular physical rendering of their statements and attaching negatives to numbers that by their definition are already negative.

XBRL is the new data-interactive filing system that is now required for all public companies. In a three-part, phased approach to implementing the system, the SEC required the largest companies to begin using the system in 2009 with a second group filing for the first time in 2010. The staff has reviewed those filings and commented on some of the common mistakes that were emerging – namely an unnecessary adherence to rendering concerns, problems with negative values, and unnecessary customization of tags to describe common elements in financial statements.

The staff's latest review is based on filings submitted for the second quarter of calendar year 2011, so that includes the first submissions by first-timers in the third phase-in group, who were subject to the filing requirement for the first time for any interim period that ended after June 15. That also includes the first time the second group of companies were subject to the more detailed method of tagging their financial statement data that is required for the second filing year. For the largest companies, it was also the first time they submitted their data free of the SEC's limited liability protection that is intended to give companies time to learn the system before facing any possible disciplinary action.

“As companies continue through the phase-in of the interactive data requirements, with the ongoing introduction of detailed tagging of notes to the financial statements and the phase-out of the limited liability provisions, we encourage them to prepare future filings that are consistent with the themes of our observations,” SEC staff wrote.

So let's review. First, the good news: The staff did not say in its latest review that companies were inappropriately creating custom tags, or extensions, where they were not able to find an appropriate tag in the U.S. GAAP Taxonomy to describe a particular financial statement element. The taxonomy is a bit like a dictionary, providing exact definitions for each piece of data in financial statements so that it can be tagged and entered into the XBRL system in a way that makes it easily and directly comparable to every other company's data.

Mike Starr, deputy chief accountant at the SEC and point person on the XBRL program, said at a recent national conference at the American Institute of Certified Public Accountants that staff has noticed a promising drop in the rate of extensions. That suggests companies are getting better at navigating the Taxonomy, he said.

The common themes that continue to emerge, however, include problems with negative values and a penchant for worry over the physical rendering of the XBRL submission. With respect to negative values, the staff reminds companies that many of the numbers they are accustomed to displaying with negative values in their paper-based financial statements are, by definition in the Taxonomy, negative numbers. So attaching a negative value to a number that is by definition negative is an error. The staff memo provides a detailed explanation of debits and credits, and how they work in the XBRL system, to help preparers grasp the problems with negative values.

The staff also points out that new filers in particular often ask if the rendered version of their XBRL financial statements needs to look the same as their HTML financial statements. “The answer is no,” the staff writes. Filers should focus on the proper tag selection, not physical rendering, and should not create custom extensions solely to produce a particular rendering, the staff advises. Even further, the rendering may help preparers assess whether their XBRL submission is complete, but it's not the best tool for assuring proper tag selection, according to staff.