Monday, 15 April 2013

Umm Extensions....picking 3 companies at random

I had a conversation recently with a well regarded member of the XBRL community who intimated to me that serious tagging errors were a thing of the past. Now what you see below may not be errors, but they are a serious problem when attempting to automate analysis using XBRL tagging.

You can find the spreadsheet containing the data I've highlighted on the website here.

The examples shown are literally the first 3 companies I loaded up in the XBRL to XL software (off the top of my head - I had no fore-knowledge that they contained significant problems). I expected I might have to look at a dozen or so to find anything remarkable but these 3 large corporations quickly scotched that idea. I should stress these are the very latest 10-K's, not the XBRL they put together when they were first trying to get the hang of this stuff,

I've basically highlighted problems that would effect the kind of analysis I might do if I was interested in understanding the performance of these behemoths of US Industry.

So with Boeing (BA), we can't calculate an accurate figure of trade receivables because any money leant to customers to finance purchases is shown as an extension (no us-gaap tag in the 1st column) so we can't add it to trade receivables automatically, as we might, to get a true figure because they haven't used a standard item to classify it. The extension obscures it's true nature when we want to standardize this data.

If we wanted to calculate our own estimate of EPS on a diluted basis, again we would be out of luck as any numerator we re-calculated could not be divided by the correct denominator as this again has been classified using an extension. Also note that the earnings figure used by the company to calculate basic EPS has been obscured by an extension.

Moving on to inventories, we can't calculate a true work in progress figure, again because of the use of an extension. A significant number in the case of Boeing.

General Motors (GM) is even more problematic. I have no S,G & A or equity income because of extensions. I can't get a figure even for depreciation as the amount has been obscured as a segment axis (don't ask! - but it basically makes it very difficult to get hold of a depreciation number this way because it's hidden behind a segment extension).

So this just leaves us with 3M (MMM). And they've managed to hide trade payables behind an extension.

There are more errors (sorry data issues) - I've just picked out the obvious ones in a cursory flick through these 3 companies.

And it might be there are no suitable us-gaap extensions to cover the item they are trying to disclose.

The use of extensions in the ways highlighted above could be seen by some as healthy and in this respect you might want to read a post by Daniel Roberts.

The data you see in the spreadsheet has all been picked out of sheets generated using XBRL to XL ( As well as providing XBRL data for analysis, this version highlights any potential errors.