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To get the fuller story of how a company is doing, you have to struggle through the notes, lists, and tables that go along with the line items in financial reports. The Notes in a 10-K can be three times longer than the rest of the report, and it is very hard not to miss important details. But starting next year, your computer will be able to read all the notes for you, and can even flow them into your Excel spreadsheet for instant, granular analysis.

Next year, all tables and narrative disclosures within each footnote must be “detail tagged” similar to how Core Financial Statements are currently tagged. Companies will be adding XBRL tags to the data inside blocks of text. The illustration below shows how this SEC reporting requirement vastly increases the amount of granular information available for automated downloading and analysis.

Level 4 Tagging

It’s all part of the phased-in SEC mandate that started this year, requiring companies to submit their reports as interactive data, as opposed to static PDF or HTML documents. The phased-in approach gave companies time to get through the first learning curve. Now it’s time for the last phase. Companies must computerize the larger amount of information in the textual portions of their financial reports by adding XBRL tags. Every monetary value, percentage, and number, gets it own separate identifying tag. (We’ve included a summary chart at the bottom of this story showing the 4 levels of XBRL tagging.)

Many companies are already tagging their footnotes, to get a jump start on the learning curve, which will be stepper than any other. You can see what these reports look like here, with EDGAR Online’s last quarterly report.

A visual problem

While compliance with the first phase of the XBRL mandate has gone smoothly, many companies continue to report visual problems. When XBRL data get translated into a visual display, it does not always look the same way it did in the original HTML/SGML document and the visual output depends on what software is used to render the computer code into a graphic display. Not all rendering applications are equal. (The illustration above uses I-Metrix from EDGAR Online, an analytical tool which is designed to render XBRL information in multiple formats, including on corporate websites.)

The real problem here is that companies are required to post their XBRL instance documents on their corporate websites, and investors need tools to view them properly. The XBRL data is accurate, but not always pretty. This rendering problem is expected to be worse for XBRL-tagged notes and lists and tables. Visually important formatting, such as underlines, font, margins, and other clarifying techniques can be lost. It may even appear that a part of a table is missing –though the XBRL information itself is highly accurate.

We’ve written about our XBRL IR solution for corporate websites in an earlier story.  To see more examples of how XBRL documents (including that of your own company) look, you can around at www.TryXBRL.com.

Summary of SEC XBRL Levels

For companies wanting to move quickly through the learning curve for tagging their notes, a Pilot Program for Sample Detailed Notes Tagging is offered by RR Donnelley, together with EDGAR Online. Interested parties can call Eric Evans at EDGAR Online 212-457-8203 for more information.