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Your Guide to the 2020 US GAAP Taxonomy Update

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20 April 2020

As of 9 March 2020, the EDGAR system has been updated to support the 2020 US GAAP Taxonomy (2020 UGT), the 2020 SEC Reporting Taxonomy (2020 SRT), and other SEC taxonomies releases. The 2020 taxonomies bring a variety of changes, including element updates and modelling changes.

2020 US GAAP Taxonomy updates overview

The new taxonomy release introduced 380 element additions, 1,178 element reference modifications, 932 definition/label/data type changes and 324 element deprecations. The chart below illustrates the top areas of change.

  Changed Elements   
  New Elements

References

Definition, Label, Type Deprecated
Total 380 1,178 932 324
Taxonomy Technical Improvements, Accounting Changes and Reference Project 63 877 829 83
SEC Simplification (ASU 2019-07) 1 175 2 81
Retirement Benefits - Phase III 66 29 19 38
Variable Interest Entities  21 36 4 59
Film Costs (ASU 2019-02) 46 11 11 1
Other 183 50 67 62

*Note certain elements affected multiple taxonomy topic updates. These elements were included in only one topical area in the table above.

Taxonomy Technical Improvements—Maturity/Future Payment Disclosures

One of the broadest impact areas of the taxonomy technical improvements was updating tagging for maturity schedule and future payment disclosures. The 2020 UGT contains a significant number of label and definition modifications related to these disclosures across multiple accounting topics.

This change modifies how the maturity-by-year elements match up with the disclosure year and is expected to affect most filers. This update is intended to drive consistency in interim disclosures. Filers should review interim maturity and future payment disclosures for possible updates to element usage.

Accounting Standards Update Transition Modelling 

The The Financial Accounting Standards Board (FASB) taxonomy team made updates around ASU transition modelling to improve consistency with various transition methods. The taxonomy is revised where both retrospective and cumulative effect adoption methods are dimensionalised but use different axes.

The new axis "Cumulative Effect, Period of Adoption [Axis]" was introduced in the 2020 SRT due to this remodelling. The Restatement [Axis] was revised to now be called the Revision of Prior Period [Axis], and four new members were added for the different types of adjustments (change in accounting principle, error correction, accounting standards update and reclassification). Filers should review accounting transition disclosures for possible updates to current modelling.

Variable Interest Entities and Equity Method Investments

The FASB taxonomy team began a taxonomy topical project on variable interest entities (VIEs) and equity method investments to address inconsistencies in modelling and tagging of these disclosures. Both topics contain disclosures that have been remodelled in the 2020 UGT. Three new axes were introduced for variable interest entities disclosures: "Investments by Consolidated and Nonconsolidated Entities [Axis]," "Pledged Status [Axis]" and "Recourse Status [Axis]." The equity method investment disclosures contains one new axis, "Equity Method Investment, Nonconsolidated Investee [Axis]."

As a result, this has changed the modelling from a line item-driven approach to a dimensionally-driven approach. The most impacted disclosures relate to financial information and will now allow use of existing face statement elements with these new axes and/or the existing Consolidated Entities [Axis] to convey the relationship.

Other

FASB made various other changes to the 2020 UGT. Two of the more significant areas relate to accounting standards updates and disclosures around multiemployer plans for retirement benefits.

Accounting standards updates (ASUs) make up 22% of the overall taxonomy changes in the 2020 UGT. The following ASUs/ASCs had the most significant impact in the 2020 taxonomy: 

  • ASU 2019-07 - Codification Updates to SEC Sections: contains modifications of existing elements and resulted in deprecation of elements. 
  • ASU 2019-02 - Entertainment - Films - Other Assets - Film Costs: introduced three new taxonomy groups which primarily consists of new elements.  
  • ASC Topic 842 - Leases: contains additional elements, axis, and members related to common practice disclosures. Filers should review if these new elements could replace existing extension elements. 

The third phase of the taxonomy topical project on retirement benefits relates to multiemployer plans. Multiemployer-specific axes were deprecated and replaced with existing retirement plan axes. A distinction was made in the modelling of elements by introducing separate line items to capture if the multiemployer pension plan is either individually significant or individually insignificant. Filers should review these disclosures for updates in current modelling. 

DQCRT Taxonomy

FASB introduced the XBRL® US DQC Rules Taxonomy (DQCRT) in 2020. This taxonomy includes XBRL US Data Quality Committee (DQC) rules to provide additional exposure to data quality validation rules for XBRL filings with the SEC. This taxonomy contains three data quality rules from the DQC (DQC 0001, DQC 0008 and DQC 0015) focused around axis and member combinations, reversed calculation relationships and unexpected negative values. 

Note that the DQCRT does not include the logic to check a filing against the rules provided in the DQCRT. This taxonomy provides another resource to review elements and exceptions applicable to the rules included.

How should SEC filers approach taxonomy migration this year?

The 2018 US GAAP taxonomy required major tagging updates for most filers, and the 2019 US GAAP required focus on ASU adoption and review of modified references. While migration to this year's new taxonomy does not contain as many significant modeling changes as found in previous years, taxonomy topical projects (retirement benefits, variable interest entities and equity method investments, and ASU transition), review of modified labels and definitions should be a key area of review. 

To provide guidance to filers, the FASB does offer a number of resources on their website:

For other learning opportunities, watch the Workiva calendar of events for upcoming webinars and workshops on filing best practices, XBRL tagging and more.

Last, but not least, please keep in mind that the SEC strongly encourages you to use the most current version of the taxonomy for your filings. Even though the 2018 taxonomy is not expected to be removed before June, for those who are currently using the 2018 version, it would be prudent to have a plan in place well before the deadline. Your service providers can also help you on your path to a successful migration this year.

Of course, this spring has presented more challenges for filers than usual. If you need assistance with migration, XBRL tagging, or learning more about how Workiva can help, please reach out, and we will get back to you shortly.

XBRL® is a trademark of XBRL International, Inc. All rights reserved. The XBRL® standards are open and freely licensed by way of the XBRL International License Agreement.

 

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