Recently, the SEC’s Office of Structured Disclosure warned in this statement that some companies are incorrectly tagging basic and diluted earnings-per-share data in XBRL. Without fixing the tags, apparently the data is useless to end users. Making the fix is important.

The statement explains what is required to tag this information correctly. It’s a little hard to understand unless you are familiar with tagging practices, trust me. The upshot is that the SEC’s Division of Economic and Risk Analysis is monitoring this stuff – and as the statement notes, the Staff has found the following incorrect tagging practices in a number of Forms 10-Q and 10-K:

  • Creating custom tags (such as BasicAndDilutedEarningsPerShare) to tag the amount when basic and diluted EPS have the same value and are presented only once on the face of the income statement.
  • Tagging this amount only once using one of the two standard tags.
  • Tagging this amount using a standard tag that was deprecated in 2022.
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Photo of Allison Handy Allison Handy

Allison Handy is the firmwide co-chair of the Corporate & Securities practice. Her extensive experience includes advising public and private companies in connection with corporate governance practices, disclosure issues, and capital markets transactions, such as equity offerings, debt offerings and tender offers. She…

Allison Handy is the firmwide co-chair of the Corporate & Securities practice. Her extensive experience includes advising public and private companies in connection with corporate governance practices, disclosure issues, and capital markets transactions, such as equity offerings, debt offerings and tender offers. She is also a leader of the firm’s Environmental, Social, and Governance advisory team.

Allison provides counsel to companies on a broad range of issues faced by management and directors in connection with the many compliance aspects of securities laws, including governance rules adopted by the Securities and Exchange Commission (SEC) and stock exchanges. She advises boards and committees in matters related to internal investigations and the efforts of shareholder activists, and works closely with in-house counsel, financial personnel, and outside auditors and advisors to help her clients prepare proxy statements and other reports to investors that meet complex disclosure obligations.