On February 26, GE filed its 10 K. Two documents were filed by GE, one in the html format and the other in XBRL, as required by SEC. In the normal course of things, both documents should have told the same story. But then GE got it wrong.
Tucked away in the footnotes of the 10 K is an item that has caught the imagination of each and every Presidential hopeful, Democrat and Republican. It is the amount of money the company earned overseas and chose to keep overseas. It is the money that every candidate wants companies to bring back into the system, to the US.
In the html filing, GE says that the amount is US $ 104 billion.
In its XBRL filing, GE says it is US $ 104 million.
In its defence, GE will tell you that they got the units wrong. That is simply unacceptable. Especially because they made the same mistake in their 10 K of FY 2014. And FY 2013 too.
At a time, when SEC is said to be planning to phase out all forms of filings of the Ks and the Qs except in XBRL, imagine the confusion it would have caused in the marketplace. Imagine the lot of companies who would have been scraping the data off the XBRL filings, they would have picked up the number as $ 104 million. While those reading the numbers off the html document, as the WSJ had done when doing the story, would have picked up $ 104 billion.
At IRIS, we picked up the discrepancy because we looked at both filings, the html and the XBRL, knowing fully well that even the best of companies continue to make mistakes in their XBRL filings. But once SEC dumps html filings in a move that should have happened a long time ago, we would have to take the XBRL filings as gospel. In which case GE, in this situation, would have had a lot of explaining to do.
Which is why it is very important for companies to pay heed to the quality of disclosures. If a company like GE, which prides itself on being investor friendly can make such a blunder, chances are there are several hundreds if not thousands doing worse.
CA Ashwini Robin
The author is a financial analyst who spends all her time wading through XBRL filings. Feel free to mail her at firstname.lastname@example.org to get your company’s filings reviewed.