In this announcement, the SEC’s Office of Structured Disclosure advises that many of us have been tagging our basic and diluted earnings-per-share data incorrectly. The announcement indicates that this data should be tagged using GAAP Financial Reporting taxonomy elements “us-gaap:EarningsPerShareBasic” and “us-gaap:EarningsPerShareDiluted.” That’s true even where the numbers for basic and diluted EPS are the same number and are presented only once on the face of the income statement. In that case, the company “should tag that amount twice using both tags.” Why is this important? Because, according to the announcement, “[i]ncorrect tagging for EPS would negatively impact the usability of the data.” For example, in the case where the company tags the data only once, either the basic or diluted EPS information would be lost.
According to the announcement, in 2024, the staff of the SEC’s Division of Economic and Risk Analysis observed the following incorrect tagging practices in some Forms 10-Q and 10-K:
- “Creating custom tags such as BasicAndDilutedEarningsPerShare to tag this amount;
- Tagging this amount only once using one of the two standard tags; and
- Tagging this amount using a standard tag that was deprecated in 2022.”
I confess that the above is all way over my pay grade—so much so, in fact, that I actually had to look up the meaning of “deprecated” as used in this context. Was it perhaps a typo? Nope. Apparently, the term is regularly used in IT. According to TechTarget.com, “[i]n information technology…, deprecation means that although something is available or allowed, it is not recommended or that—in the case where something must be used—to say it is deprecated means that its failings are recognized.”
