RETRIEVING FINANCIAL INFORMATION IN XBRL ON THE NEXT-GENERATION EDGAR

Transcription

1 RETRIEVING FINANCIAL INFORMATION IN XBRL ON THE NEXT-GENERATION EDGAR JIANING FANG Marist College, Poughkeepsie, New York USA Abstract: The Securities and Exchange Commission (SEC) has upgraded the old Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system, to the Interactive Data Electronic Applications (IDEA) platform, or the Next-Generation EDGAR (New EDGAR). In January 2009, the SEC issued its final mandate for XBRL adoption and the conversion target dates for all firms. This conversion enables users to retrieve listed companies financial statement information at both document level and data element level. This paper reviews the basic concepts of XBRL, reports the current compliance status of the SEC XBRL conversion mandate. The main contribution of this article is to demonstrate how to retrieve data from the New EDGAR and process them with Microsoft Excel Keywords: EDGAR, XBRL, IDEA, EXCEL INTRODUCTION More than four years have passed since the Securities and Exchange Commission (SEC) XBRL conversion mandate (SEC 2009), most of the registrants have successfully converted their 10Ks, 10Qs and other required financial reports from the document format under the old Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system to the data element format under IDEA, or the Next-Generation EDGAR (New EDGAR). This provides a more efficient and cheaper data source for financial analysts, investors, students and other users needing information on the annual or quarterly financial reports of all publicly traded companies. However, due to the diminutive efforts and opportunities in terms of education and training (Cable and Healy 2013), most of CPAs and the aforementioned users do not have the necessary knowledge or skill to take advantage of this new data source (Fang 2013, Provost 2013). In this article, the author will review the SEC XBRL conversion mandate. The study will report the up-to-date filers compliance status. And it will walk you through the whole process of retrieving financial data on the New EDGAR system with a simple and practical example and step by step instruction and plenty of screen shots. The detailed instructions will not only show you how to search the companies and their data on IDEA, but also how to correctly setup your worksheets to import and process the XBRL data on Excel THE SEC XBRL CONVERSION MANDATE On January 30, 2009, the Securities and Exchange Commission (SEC) issued the final mandate for extensible Business Reporting Language (XBRL) adoption and the firm conversion target dates (SEC, 2009). The mandate required the largest domestic and foreign public companies that use U.S. Generally Accepted Accounting Principles (GAAP) to file their financial statements in XBRL format by June 15, 2009: medium-sized filers by June 15, 2010, and the rest of the filers, either using U.S. GAAP or International Financial Reporting Standards (IFRS), by June 15, 2011 (Fang 2010). The new rules are intended to make financial information easier for investors to analyze and to 1 Electronic copy available at:

2 assist in automating regulatory filings and business information processing. The New EDGAR system provides information at both the document level, such as the entire set of financial statements for a given firm, and the data element level, such as its inventory or Net Income. Data in XBRL format, or data tagged at the data element level, can function across multiple and/or different platforms or application programs. Thus, XBRL has the potential to increase the speed, accuracy and usability of financial disclosure, and eventually reduce costs for financial reporting as well as business transaction processing (Fang 2009, Bizarro and Garcia 2010). 3 THE CURRENT COMPLIANCE STATUS How has America fared in this XBRL conversion endeavor? The author has prepared the following table based on the corporate filing data published on RR Donnelley s Web site ( TABLE 1 Corporate SEC Filing Data Date Companies Filings August 29, ,970 13,935 October 15, ,281 15,642 October 30, ,383 16,379 November 30, ,875 22,238 December 30, ,066 23,184 January 26, ,175 23,708 February 16, ,227 25,138 March 06, ,271 27,181 June 15, ,710 35,796 October 19, ,974 44,612 February 11, ,142 53,296 August 15, ,582 71,716 September 12, ,631 72,875 November 19, ,777 79,243 December 20, ,837 80,252 January 22, ,872 81,032 February 28, ,912 84,079 March 27, ,945 86,672 April 29, ,016 86,507 The SEC estimates that there are about 10,200 registrants. 8,066 companies had successfully converted to the required XBRL filing format before the final deadline of December 30, That meant about 21% of the registrants had failed to convert to XBRL by the deadline. The good news is, as of January 22, 2014, more than 96% of the filers have complied with the SEC Mandate. In addition, companies will continue to provide increasing amounts of financial IDEA data (Harris and Morsfield 2012). Building on the foundation of Professors Tribunella & Tribunella (2010). In the following section, the author will walk you through the whole process of retrieving financial data on the New EDGAR with a practical example and play by play explanations with plenty of screen shots. He will not only show you how to search the companies and their data on New EDGAR, but also how to correctly setup your worksheets to import and process the XBRL data on Excel Electronic copy available at:

3 4 A XBRL DATA RETRIEVING EXAMPLE When the author was teaching vertical and horizontal ratio analysis in one of his Financial Accounting classes, he taught his students how to retrieve the necessary data on the New EDGAR to complete their 3-year trend analysis by following the following steps: Step 1 Preparing the Excel workbook EXHIBIT 1 Excel Main Functions EXHIBIT 2 Excel Options EXHIBIT 3 The SEC Official Site Immediately after opening a new Excel workbook, you first need to check whether the Developer tab is displayed in the Ribbon. If not, left-click the File tab and then left-click on Options in the pane on the left-hand side (see Exhibit 1). This opens the Excel Options 3 Electronic copy available at:

4 window. Choose Customize Ribbon in the left pane. In the right-hand column beneath Customize the Ribbon, check the selection box next to Developer (see Exhibit 2). You need to left-click the OK button at the bottom of the Excel Options window to confirm your selections and get back to your worksheet. EXHIBIT 4 SEC Search Enhancements EXHIBIT 5 EDGAR Search Results EXHIBIT 6 Filings List 4

5 Step 2 Retrieving XBRL File on IDEA to PC The next step is to download the necessary data from the New EDGAR system. After opening your internet browser, you can get on the SEC EDGAR website by typing in its web address ( or searching SEC EDGAR in an internet browser and clicking on the SEC EDGAR link. From the SEC EDGAR s homepage, you can search for any one of the companies registered with the SEC by clicking on the Search button in the upper right corner (see Exhibit 3). This will open a SEC Search Enhancements window (see Exhibit 4). The SEC provides a few different ways to search company filings. Apple Inc. is used for our example. You can use the name search method by typing Apple Inc. into the Company Name field on the left search pane and then left-click on the Find Companies button. This will open an EDGAR Search Results window (Exhibit 5) showing you a list of names begin with Apple. Move down the Company column you will find our sample company Apple Inc. Click on the assigned CIK code to the left of the company name opens a list of all the documents that the company filed with the SEC in chronological order, forty documents at a time, together with all the pertinent registrant information. A blue Interactive Data tag is used to identify all the filings in XBRL format (Exhibit 6). When you scroll down the list, you can find the K report filed on with the SEC. Left-click on the Interactive Data tag, which will bring you the View Filing Data window (see Exhibit 7). Left-click on the Financial Statements tag on the left pane and select Consolidated Statements of Operations from the dropdown list, providing you with Apple Inc. s Consolidated Statements of Operations from September 29, 2010 to September 29, 2012 (see Exhibit 8). You can left-click on the printer icon (or the Print Document tab) to print a hard copy and use it as a reference to check the accuracy of the XBRL data that you will download later. EXHIBIT 7 View Filing Data Window You can also save the information on your PC by first opening a new Microsoft Word document, switching back to your internet browser to copy the screen by holding down the Ctrl ( Fn on some laptops) key and then press the PrtSc key on your keyboard. Then switch back to the Word document, right-click then select Paste with your mouse, or press Ctrl and v on your keyboard. These procedures will copy the screen shot to the Word document, which you can save for future use. Another option is to save the reports in the Portable Document Format (PDF). Most internet browsers have the capability of either saving or printing a web page as a PDF. The advantage with this option is that instead of simply saving an image of the report, you can save a searchable text document, which will speed up your search for relevant information later on in this process. 5

6 EXHIBIT 8 Apple Inc Next, download the financial statement data in XBRL format. Switch back to your internet browser, navigate back to the document list window (Exhibit 6) and scroll down to the same 10-K report but left-click on the Documents button this time. A Filing Detail window (Exhibit 9) will open. Scroll down to find the file with the description XBRL INSTANCE DOCUMENT marked Seq. 7 for this document. Right-click the file link named aapl xml and choose Save Target As with the given file name or any file name you like. It is recommend that you save this file in the XBRL subdirectory that you created earlier. EXHIBIT 9 Filing Detail Window Step 3 Mapping XML on the Excel workbook The next step is to import the XBRL data you need for your analysis to an Excel worksheet. Left-click on the Excel tab on the task bar at the bottom of your window. Open the instance document by left-clicking on the File tab, then click Open. You will need to navigate to your XBRL subdirectory to select the aapl xml file. After you press the Open button, Excel is smart enough to recognize that the file is in XML format. It will provide an Open XML dialog box. Select the Use the XML Source task pane option and press the OK button (Exhibit 10). A warning box (Exhibit 11) will pop up to tell you Excel will create a schema based on the XML source data. That is exactly what you want, so press the OK button to proceed. An XML Source pane (Exhibit 12) will open on the right side of your worksheet. In order to map the data quickly and accurately, we recommend that you display the associated value of each XML data element. Left-click the Options button at the bottom of the XML Source pane and check all the options. 6

7 EXHIBIT 10 Open XML Window EXHIBIT 11 Specified XML Schema Window EXHIBIT 12 XML Source Window Now you need to map the XBRL data elements equivalent to Net Income on your Excel worksheet. The problem is that XBRL is still in its infancy and all the XBRL taxonomies (XBRL financial statement filing standards for various accounting standards and/or industries, e.g., IFRS vs. US GAAP, general industry vs. insurance industry) provide many different labels to tag the same or similar data elements (Capozzoli and Farewell 2010). This presents a formidable challenge for the users especially an XBRL novice. Looking for the correct tag from a list with thousands of data elements for any new instance document is not easy because we do not know which label a company uses to tag a particular data element. For this reason, the author recommended earlier that you print out a hard copy of the Consolidated Statements 7

8 of Operations, or save a PDF or a screen shot of the statement, and choose to display the data value in the XML Source pane. Step 4 Importing XBRL Data to Excel Now when you scroll down the instance document on the XML Source pane, about 3/4 of the way down the list, you will find a data element named ns8:netincomeloss with a <value> of (for year ended Sep. 25, 2010). Refer to your hard copy or screen shot of the Consolidated Statements of Operations for Apple Inc. (Exhibit 8); you can verify that the two amounts match each other. You also learn that the company uses the label of ns8:netincomeloss to tag its Net Earnings. Now click on <value> (next to its associated amount of ) and drag it to cell (A1) on your worksheet or any other field in which you like to map the Net Income or XBRL data elements labeled ns8:netincomeloss. Left-click on the Developer tab in the Excel Ribbon on top of the window and choose Import. Excel will display an Import XML window. Again, you need to navigate to your XBRL subdirectory to select the same aapl xml file. After you press the Import button at the bottom of the window, Excel will import and place Apple Inc. s Net Income for all the reporting periods (2010, 2011 and 2012) below the XBRL data element of ns8:netincomeloss. We recommend that you label the data with the corresponding year by referring to your hard copy or screen shot of the Consolidated Statements of Earnings (Exhibit 13). EXHIBIT 13 Mapping and Importing XBRL Data Window Following the same procedures, you can scroll down the XML Source pane, about 1/2 of the way down the list, to find the Net Sales or the XBRL equivalent data elements of ns8:salesrevenuenet and map it to cell D1 on your Excel worksheet. Following the procedures described above, repeat the same process for the Net Sales data for the last three years. Right-click the worksheet tab Sheet 1 at the bottom of the window and rename it as XBRL Data and Sheet 2 as Report (Exhibit 14). Save the workbook in your XBRL subdirectory as AAPL_XBRL. Later, we will use the XBRL Data worksheet as a template for importing all the necessary XBRL data and the Report worksheet for the trend analyses and reports. 8

9 EXHIBIT 14 Renaming Worksheet Window Step 5 Processing XBRL Data on Excel On the Report worksheet, you can setup a section to calculate the three-year Net Profit Ratio trend analysis for Apple Inc. The next step is to link all the necessary data from your XBRL Data worksheet to your Report worksheet. You should also setup all the formulas needed for the Net Profit Ratio trend analysis. For example, the formula in cell F9 is =F6/F7, and in cell F11 is =(F9-E9). You only need to enter each of these formulas once then copy and paste it to the other years to save time (Exhibit 15). EXHIBIT 15 The Report Worksheet Following the same procedure, you can download Apple Inc. s financial statement data for 2009 (including data for 2008 and 2007) and for many years to come. If you need to expend your worksheet to include more years for a longer trend analysis, because you have setup the XBRL mapping and Report worksheet already, you will only need a minute or two to retrieve all the necessary data without any input errors a huge gain in both efficiency and accuracy. One important thing to know-- except for the companies who took part in the SEC s voluntary XBRL filing program, most have started to file their financial reports in XBRL format after the SEC XBRL conversion mandate in Nevertheless, the New EDGAR is backwardcompatible, you can continue to download their financial statements at the document level from the SEC by following similar procedures to search for your target company (Apple Inc. for our example). After you navigate to the Filings List window (Exhibit 5), click on the Next 40 button at the right-bottom of the window until you find Apple Inc. s 10-K report for Left-click on the Documents button, a Filing Detail window (Exhibit 9) will open. This time you need to click on the d10k.htm link under Document. EDGAR will provide you with the full 10-K report. You will have to sift through the report to find the data needed 9

10 for your analysis and manually enter the amounts in the Report worksheet much slower than the XBRL data import, and more importantly, much more susceptible to input errors. However, if you search for information online or in your saved PDF, you can improve your search accuracy and efficiency. These formats maintain the integrity of the reports at the document level. By using the search function, Ctrl and f is the shortcut for most programs, you can instantly locate every occurrence of a given word or phrase in your document. This method is still subject to human error; beware of misspellings. 5 CONCLUSION Over the past five years, the SEC has made considerable progress in building a functional IDEA system. It has successfully implemented the Next-Generation EDGAR System, which provides its users with many convenient search options such as multiple links and RSS (really simple syndication) feeds. This new system is backward-compatible by seamlessly combined the old document level EDGAR system with the new data element level IDEA system. Thus, a user can retrieve a company s financial data in XBRL format at data element level as well as in electronic document level in HTML format. In this article, the author explains all the necessary XBRL related concepts and demonstrated detailed steps describing how to directly retrieve XBRL data from financial reports filed with the SEC and import those data into Excel To be better prepared to handle this challenge in the near future, business school and institutions with modest resources should train their faculty, students and/or staff with the necessary XBRL theories and skills. By now, most of the big software houses have developed their proprietary XBRL modules to work with their Enterprise Resource Planning systems for filing financial reports with the SEC as well as retrieving IDEA data for financial analyses. However, Microsoft Excel remains the most cost effective and accessible XML-capable software for most users of limited resources. 6 REFERENCES Bizarro, P., and Garcia, A. (2010). XBRL Beyond the Basics. The CPA Journal, 80(5). Cable, R., and Healy, P. (May 2013) XBRL in the Accounting Curriculum. Working paper- -American Accounting Association Mid-Atlantic Region Annual Meeting Proceedings. Capozzoli, E., and Farewell, S. (2010) SEC XBRL Filing Requirements: An Instructional Case on Tagging Financial Statement Disclosures, Issues in Accounting Education, 25, 2, Fang, J. (2009). How CPAs Can Maser XBRL. The CPA Journal, 79(5). Fang, J. (2010). Why Is the U.S. XBRLConversion Process So Slow? The CPA Journal, 80(1). Fang, J. (2013). The progress of XBRL Conversion: Reviewing the Rules, Consequences, and Potential Remedies. The CPA Journal, 83(2). Harris, T., and Morshield, S. (Dec 2012). An Evalusation of the Current State and Future of XBRL and Interactive Data for Investors and Analysts. Columbia Business School, Center for Excellence in Accounting and Security Analysis. White Papoer Number Three. Jaiswal-Dale, A. (2010). Facilitating Student Understanding of the Sub-Prime Mortgage Crisis: Systematic Risk, CDO and Contagion. Journal of International Business Education, 5. 10

11 Provost, T. (2013). Not-So-Happy Anniversary, XBRL. --Downloaded from CFO.com on January 25, SEC (2009). Interactive Data to Improve Financial Reporting. Retrieved from: Taylor, E. Z., and Dzuranin, A. C. (2010). Interactive Financial Reporting: An introduction to extensible Business Reporting Language (XBRL). Issues in Accounting Education, 25(1), Tribunella, T., and Tribunella, H. (2010). Using XBRL to Analyze Financial Statements. The CPA Journal, 80(3). 11