How Do I Get the Calculation Inconsistencies to Go Away?
"Perfection" is in the eye of the beholder.
With an eye toward XBRL filings, "perfection" demands that we understand the reasons for each inconsistency in order to distinguish those that deserve attention and correction from those that naturally arise based on your taxonomy's calculation relationships and the actual facts reported.
Let's examine a circumstance where a "perfect" calculation inconsistency exists. Below, we have a portion of a balance sheet from a 10-Q. The taxonomy that models this report section includes a summation (or calculation) assertion stating that the reported value tagged with the concept Total assets should equal the sum of the values tagged with a number of other contributing concepts.When XBRL calculation validation occurs, all the values tagged against the relevant concepts that are reported in the same time period will be tested to see if they match the summation formula. In other words, for the facts reported in the September 25, 2010 context, does the "Total assets" value equal the sum of the other concept values (from "Total current assets" down)?
In the example below, these numbers foot just fine. Below, we have a piece of a Segment Reporting disclosure from the same 10-Q. In this report we find that "Total assets" is reported across two different segments: Components and Systems. Further, we find another item from the balance sheet: "Goodwill." This creates a situation for a "perfect" inconsistency.
Remember that this company's filing taxonomy already asserts that "Total assets" should equal the sum of a number of other facts including "Goodwill." Now in these segment reporting contexts, the only contributor to the "Total assets" summation assertion that is present is "Goodwill."
Sliced as they are by reporting segment, XBRL calculation validation will test for the following consistencies:
In the Components segment does Total assets = Goodwill? and: In the Systems segment does Total assets = Goodwill?
Why such a short formula? It is short because facts for only two concepts in the original calculation assertion formula are being reported in each of these segment reporting contexts. These are the facts: Context of September 25, 2010 for the Components segment Total assets of $3,545,515 Goodwill of $393,365 Context of September 25, 2010 for the Systems segment Total assets of $656,256 Goodwill of $39,923 Given the above facts, is each calculation assertion consistent? For example, does $3,545,515 = $393,365? Of course not. It is inconsistent. But is it perfect? Yes, it is a perfect inconsistency. Can it be "fixed"? Yes.
But to do this we would need to report a fact for every concept contained in the assertion. Is it necessary to fix it? No. These facts are perfect just the way they are.
Every inconsistency deserves attention to determine whether or not it is a perfect one and not a result of incorrect values, incorrectly defined calculation assertions, failing to tag a fact, or a value reported as a positive value when it should be a negative value (or vice versa). These inconsistencies must be eliminated. You just need a good eye for task.
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About the Author
Dean Ritz is a subject matter expert in information modeling with over three decades of experience in various data-dominated domains, including artificial intelligence, expert systems, object-oriented programming, and most recently the modeling of financial information. As a Senior Director at Workiva, he applies his expertise to product strategy for collaborative work management and the management of the company’s expanding patent portfolio. His interests extend to the topics of rhetoric and ethics, with scholarly work in these areas published by Oxford University Press (2011, 2009, 2007), and Routledge (2017).