The state of the Data Quality Committee and XBRL
In Q4 2015, the XBRL US Data Quality Committee (DQC) released its first set of XBRL validation rules to the public with guidance to issuers to apply to all submissions after Jan. 1, 2016. These rules are available via Arelle, the validation engine used by the SEC.
The DQC is focused on improving the usability of XBRL data. Throughout 2016, the priorities of the DQC are to release XBRL validation rules contributed by XBRL US and Workiva as well as develop guidance on reducing unnecessary extensions in XBRL filings.
The Committee is currently reviewing a second round of XBRL validation rules contributed by XBRL US and Workiva. The focus of the next round of validations are:
- To broaden the reach of negative element validation.
- To create basic rules on the use of axes to prevent the accidental use of nonsensical members. For example, filers should not use members representing legal entities on the property, plant, and equipment axis.
The DQC plans to release the next draft of rules for public comment May 23, giving 60 days for feedback. A study conducted in 2012 by the Center for Excellence in Accounting and Securities Analysis (CEASA) at Columbia University and a survey of preparers and data consumers by the Financial Accounting Standards Board (FASB), both found that extensions were one of the major problems impeding the automated consumption of XBRL data. In addition, input from the seven members of the DQC who are data consumers as well as the DQC's outreach efforts to data consumers have confirmed the findings of CEASA and the FASB.
The DQC is actively working on the release of draft guidance on the use of extensions. A discussion draft of preliminary conclusions from this guidance is scheduled to be made publicly available for comment in May around the same time as the second set of validation rules.
To date, the Committee has analyzed thousands of 10-Ks filed in 2015. Data has revealed that a majority of filers continue to use unnecessary extensions for tagging their financial data and that a significant number of extensions are unnecessary in light of the standard concepts available within the taxonomy.
The Committee continues to seek input from data consumers in order to ensure the actions of the Committee are aligned with the data consumers and are focused on improving the usability of data.
The usability of XBRL data is not only a focus of the DQC, it is also a primary focus for the SEC. The DQC has a meeting with the SEC again in Q2 2016 to discuss the results of the first round of data validations on the Q1 2016 filings, along with how filers are reacting to the new rules and how these changes are improving the usability of data. In addition, the DQC will discuss its progress on proposed guidance for extensions.