The potential utility of XBRL as a tool for regulators to fight fraud and investors to better analyze companies makes its numerous flaws that much more of a shame. I can only hope that the SEC realizes the value of XBRL and makes a commitment to ensuring the accuracy and validity of XBRL data.
As the Chairman of the Financial Accounting Standards Board, or FASB, from 2002 to 2010, Robert Herz has had a much larger influence on financial markets than the average investor appreciates.
Most investors are not aware that companies hide one-time and unusual charges and income inside normal, operating line items (e.g. “Cost of sales”) on their income statement. These hidden items can mislead investors by artificially decreasing/increasing GAAP earnings. We found 13,000+ one-time items buried in normal line items like “Cost of Sales” by studying the Footnotes of 10-K filings from 1998 thru 2/15/2011. This research revealed that companies have concealed over $41 billion in one-time items.
We have always known that finding data is the Footnotes is, for most investors who are without our patented Research Platform, like searching for needles in a haystack. With XBRL, the only difference is now investors can search for digital needles in a digital haystack. Funny how little things change.