The SEC’s Division of Economic and Risk Analysis (DERA) recently released an announcement reminding filers to use the standard elements provided in the Generally Accepted Accounting Principles (GAAP) taxonomy to tag data rather than create and use custom tags. The SEC has recognized that, though custom tags accommodate unique conditions in a filer’s individual disclosure, the use of custom tags could potentially impair users’ ability to compare similar data across companies.
SEC staff recently evaluated companies’ use of custom tags to tag the amortization of operating lease right-of-use assets in their Forms 10-K and 10-Q for fiscal year 2020. Though the 2020 US GAAP taxonomy included the standard element OperatingLeaseRightOfUseAssetAmortizationExpense for filers to tag this expense, staff discovered that some filers using the 2020 version still created and used custom tags to tag the expense instead of using the preferred standard element.
When an appropriate tag does not already exist in the standard list of tags (for reasons other than or in addition to an inappropriate standard label), the SEC’s rules do require electronic filers to create and use a new special element.