By Jen Stretch, CPA – Manager, Professional Services at Certent
On March 11, 2019, the Securities and Exchange Commission began supporting the 2019 US GAAP Taxonomy (UGT), as well as the 2019 SEC Reporting Taxonomy (SRT). Each year the UGT is updated, not only to accommodate new Accounting Standards Updates (ASUs), but also to make changes that improve its usability and the data quality resulting from its use. Therefore, it is important for filers to be familiar with how a new taxonomy will affect their filing. In this blog we will explore the major 2019 UGT changes and provide you with resources to help you determine the specific impact to your filing.
There were several ASUs addressed in the 2019 UGT update. The most impactful include:
- Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13)
- Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (ASU 2018-12).
Taxonomy changes related to new ASUs include addition of new elements, deprecation of existing elements, and label, definition and reference changes. This year over 800 new elements related to ASUs were added to the UGT alone. A detailed list of these, as well as other taxonomy changes, are identified in spreadsheet format on the Financial Accounting Standards Board’s (FASB) main taxonomy page here. Also, the taxonomy viewer, or Yeti, has useful filtering tools that help users identify changes by taxonomy year. This includes such changes as element additions and deprecations, and search for elements related to specific ASUs or other authoritative documentation.
Note: During ASU transitions, elements that will eventually be removed from the taxonomy because the guidance from which they are derived will no longer be applicable are re-located to a transition-specific abstract and receive a Taxonomy Implementation Note with specific guidance on use of the element.
Accounting Standards Updates aren’t the only taxonomy changes happening throughout the year. FASB’s other projects that affected this year’s taxonomy release include:
- the SEC Reporting Taxonomy (SRT),
- the Reference Project, and
- other improvements that will assist users in proper XBRL modeling.
SEC Reporting Taxonomy
With the release of the 2018 taxonomy last year, a handful of elements were moved to a new taxonomy, the SRT. The SRT was created to house elements that were derived from sources other than US GAAP, such as SEC guidance or common reporting practices. Two commonly used axes, “Scenario [Axis]” and “Title of Individual [Axis]”, were moved to the SRT in 2019. Additionally, in the 2019 SRT the “Range [Axis]” was renamed “Statistical Measurement [Axis]” and now houses two new members, “Median [Member]” and “Arithmetic Average [Member]”. If you have any of these statistical measurements in your filing, be sure to see these new members which should replace an extension.
The Reference Project is a multi-year project taking place at FASB in which elements are being reviewed and updated with appropriate references. As a result of this project, there are now seven different reference roles (see FASB description below.) When an element is reviewed for the Reference Project, it is assigned appropriate reference(s), such as the applicable the Accounting Standards Codification, and one the new reference roles, which identify the origin of the element. This project is especially important to users because an element’s references take precedence over all other attributes when choosing elements.
Taxonomy Implementation Notes (TINs)
Over 1,200 Taxonomy Implementation Notes were added to the 2019 taxonomy. TINs provide helpful guidance to taxonomy users in several situations, such as when to enter a positive value versus a negative value for two-way elements, how an element should be used during ASU transitions, and indicate data expected to accompany the concept. Be sure to check these out in the reference section next time you are researching/selecting elements.
Common Reporting Practices Elements
During 2019 taxonomy preparation, the FASB completed research on common reporting practices and added six new elements related to derivatives and investments. These new elements represent common disclosures for which companies extend custom elements, so be sure to look at the list of new elements below to identify whether any of your custom elements can be replaced.
With a number of changes on the horizon, it is critical for public companies to ensure they are prepared to comply with the 2019 taxonomy. Want to learn more about how Certent can help you and your team improve the quality of your disclosures and simplify the process? Contact us today.