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XBRL-based Digital Financial Report Analysis Report
Review by: Thomas McKinney, CPA and Charles Hoffman, CPA
March 28, 2019
This report provides a comprehensive assessment of the
XBRL-based financial report created for
Microsoft, Inc. which was submitted to the U.S. Securities and
Exchange Commission1. The purpose of
the analysis is to provide feedback as to the true and fair
representation of information within the XBRL
technical syntax format to make sure the meaning conveyed via
the XBRL format and the information
conveyed via the HTML format are consistent in terms.
The analysis performed is consistent with and leverages the
spirit of the Method of Implementing a
Standard Digital Financial Report Using the XBRL Syntax2.
SEC Filing Page:
https://www.sec.gov/Archives/edgar/data/789019/000156459017014900/0001564590-17-014900-
index.htm
XBRL Cloud Evidence Package:
http://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/evidence-package
XBRL Cloud Reporting Checklist and Disclosure Mechanics:
http://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/Disclosure%20Mechanics%20and%2
0Reporting%20Checklist.html
XBRL Cloud Viewer:
https://edgardashboard.xbrlcloud.com/flex/viewer/XBRLViewer.html#instance=http://www.sec.gov/Arc
hives/edgar/data/789019/000156459017014900/msft-20170630.xml
1 Microsoft 2017 10-K,
https://www.sec.gov/Archives/edgar/data/789019/000156459017014900/0001564590-17-
014900-index.htm 2 Charles Hoffman, CPA and Rene van Egmond,
Method of Implementing a Standard Digital Financial Report
Using
the XBRL Syntax,
http://xbrlsite.azurewebsites.net/2019/Library/MethodForImplementingStandardFinancialReportUsingXBRL.pdf
https://www.sec.gov/Archives/edgar/data/789019/000156459017014900/0001564590-17-014900-index.htmhttps://www.sec.gov/Archives/edgar/data/789019/000156459017014900/0001564590-17-014900-index.htmhttp://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/evidence-packagehttp://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/Disclosure%20Mechanics%20and%20Reporting%20Checklist.htmlhttp://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/Disclosure%20Mechanics%20and%20Reporting%20Checklist.htmlhttps://edgardashboard.xbrlcloud.com/flex/viewer/XBRLViewer.html#instance=http://www.sec.gov/Archives/edgar/data/789019/000156459017014900/msft-20170630.xmlhttps://edgardashboard.xbrlcloud.com/flex/viewer/XBRLViewer.html#instance=http://www.sec.gov/Archives/edgar/data/789019/000156459017014900/msft-20170630.xmlhttps://www.sec.gov/Archives/edgar/data/789019/000156459017014900/0001564590-17-014900-index.htmhttps://www.sec.gov/Archives/edgar/data/789019/000156459017014900/0001564590-17-014900-index.htmhttp://xbrlsite.azurewebsites.net/2019/Library/MethodForImplementingStandardFinancialReportUsingXBRL.pdf
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Report Evaluation Overview The following is a comprehensive
summary overview of automated validation processes performed by
two validation tools:
XBRL Cloud. A summary of and detailed results viewed
online3:
Pesseract4 which is a locally installable software application
(so we cannot provide a link to anything
online, you would have to install the tool):
3 View online,
http://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/evidence-
package/#ReportProperties.html 4 Pesseract is free to download
and install, http://pesseract.azurewebsites.net
http://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/evidence-package/#ReportProperties.htmlhttp://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/evidence-package/#ReportProperties.htmlhttp://pesseract.azurewebsites.net/
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Summary of Exceptions XBRL Cloud reported XBRL US Data Quality
Issues5
XBRL Cloud reported Reporting Entity Specific Rules issues6:
Roll forward:
Roll forward:
Roll forward:
Roll forward:
5 View XBRL US data quality issues online,
http://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/evidence-package/#Validations-DQC_MANUAL.html
6 View reporting entity specific rules issues online,
http://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/evidence-package/#Validations-ENTITY_RULES_MANUAL.html
http://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/evidence-package/#Validations-DQC_MANUAL.htmlhttp://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/evidence-package/#Validations-DQC_MANUAL.htmlhttp://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/evidence-package/#Validations-ENTITY_RULES_MANUAL.htmlhttp://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/evidence-package/#Validations-ENTITY_RULES_MANUAL.html
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XBRL Cloud reporting entity specific roll up rules
inconsistencies7: (total of 20 inconsistencies, 17 of
which were not issues, the following three are possible
issues)
Roll up:
Roll up:
Roll up:
XBRL Cloud Disclosure Mechanics and Reporting Checklist8:
7 View reporting entity specific roll up inconsistencies online
at,
http://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/evidence-package/#Validations-XBRL_CALCULATIONS_MANUAL.html
http://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/evidence-package/#Validations-XBRL_CALCULATIONS_MANUAL.htmlhttp://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/evidence-package/#Validations-XBRL_CALCULATIONS_MANUAL.html
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Inconsistencies are that (a) no nature of operations disclosure
(which is a required disclosure) was found
and (b) a Level 4 disclosure was provided for restructuring
charges but no Level 3 Disclosure Text Block
was found.
8 View disclosure mechanics and reporting checklist online
at,
http://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/Disclosure%20Mechanics%20and%20Reporting%20Checklist.html
http://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/Disclosure%20Mechanics%20and%20Reporting%20Checklist.htmlhttp://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/Disclosure%20Mechanics%20and%20Reporting%20Checklist.html
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All of the other 68 disclosure that were tested where consistent
with expectations. Note that not all
disclosures are tested, only the 68 common disclosures for which
machine-readable rule have been
created.
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Fundamental accounting concept relations continuity cross checks
for
current financial report The following results were obtained
from running a standard algorithm using standard rules to test
the
high-level financial accounting concept relations of information
represented within the report.
Microsoft report using
The reporting styles of the primary financial statements of
public companies fall into patterns9. This
Microsoft report follows the pattern
COMID-BSC-CF1-ISS-IEMIB-OILY-SPEC6 which is used by
approximately 1,748 or approximately 31% of all public companies
and 1,647 public companies are
shown to be consistent with all of these rules10. This reporting
style includes:
A classified balance sheet.
An income statement that does report gross profit and does
report operating income (loss).
The most common cash flow statement format is used.
The most common statement of comprehensive income format is
used.
There are 21 relationships that are expected to exist and this
Microsoft report is consistent with 100%
of those expected high-level financial accounting
relationships.
Pesseract results: (summary of rules)
9 US GAAP Reporting Styles,
http://www.xbrlsite.com/2018/10K/US-GAAP-Reporting-Styles.pdf
10 COMID-BSC-CF1-ISS-IEMIB-OILY-SPEC6,
http://xbrlsite.azurewebsites.net/2018/Campaign/Validation/ExtractionPrototype-SPEC6-2018-01-10_Revised.zip
http://www.xbrlsite.com/2018/10K/US-GAAP-Reporting-Styles.pdfhttp://xbrlsite.azurewebsites.net/2018/Campaign/Validation/ExtractionPrototype-SPEC6-2018-01-10_Revised.zip
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XBRL Cloud results: (showing only the income statement cross
check results, all results can be viewed
online11)
Details of all the high-level financial accounting relations
tested:
Balance sheet:
11
View all results online at,
http://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/evidence-package/#Validations-USFAC.html
http://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/evidence-package/#Validations-USFAC.htmlhttp://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/evidence-package/#Validations-USFAC.html
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Income statement:
Net income breakdown:
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Reconciliation of net income attributable to parent to net
income available to common shareholders:
Comprehensive income calculation:
Breakdown of comprehensive income: (parent, noncontrolling
interest, total)
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Net cash flow:
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Net cash flow breakdown: (continuing and discontinued)
Breakdown of continuing and discontinued net cash flow:
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Comparison of fundamental accounting concept relations across
all
filings of Microsoft (Summary) This compares the reports of
Microsoft for each period for the past eight years. GREEN
indicates
everything is consistent with expectation. YELLOW indicates that
some issue exists.
Over the years, Microsoft had two inconsistencies with the
fundamental accounting concept relations
continuity cross checks. In one period, there was a
contradiction related to the concept “us-
gaap:OperatingExpenses” reported in a disclosure. On another
occasion there was an issue with a
concept used to report other comprehensive income.
Very good.
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Period comparison for an entity (Details) The following
comparison uses the same algorithm and rules that were used to test
an individual report
to test Microsoft reports for the past five years. Fundamental
accounting concept relations continuity
cross checks, between periods for a specific entity, here you
have five consecutive periods of Microsoft
reports:
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These are the files used for the ENTITY COMPARISON:
http://www.sec.gov/Archives/edgar/data/789019/000156459017000654/msft-20161231.xml
http://www.sec.gov/Archives/edgar/data/789019/000119312516742796/msft-20160930.xml
http://www.sec.gov/Archives/edgar/data/789019/000119312516662209/msft-20160630.xml
http://www.sec.gov/Archives/edgar/data/789019/000119312516550254/msft-20160331.xml
http://www.sec.gov/Archives/edgar/data/789019/000119312516441821/msft-20151231.xml
Consistent with expectations.
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Peer comparison across entities with the same reporting
style
(summary) The same software algorithm and rules that were used
to test the individual Microsoft report and the
cross entity comparison of reports are now used to compare the
Microsoft report to four of Microsoft’s
peers that used the same reporting style as Microsoft. Here you
have Microsoft contrast to four other
public companies that report using the same reporting style:
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These are the files for the PEER COMPARISON (Below):
http://www.sec.gov/Archives/edgar/data/858877/000085887717000004/csco-20170128.xml
http://www.sec.gov/Archives/edgar/data/320193/000162828017000717/aapl-20161231.xml
http://www.sec.gov/Archives/edgar/data/789019/000156459017000654/msft-20161231.xml
http://www.sec.gov/Archives/edgar/data/880807/000162828017000901/amsc-20161231.xml
http://www.sec.gov/Archives/edgar/data/796343/000079634317000031/adbe-20161202.xml
Consistent with expectations.
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Model structure analysis The analysis below compares the XBRL
presentation relations created with what is expected. XBRL
validation does not verify the correctness of these XBRL
presentation relations, so this additional step is
necessary to make sure no representation errors exist.
The following is a summary of the pieces that make up the
XBRL-based digital financial report: (provided
by XBRL Cloud12)
Inconsistencies would be shown by cells with an ORANGE (error)
or YELLOW (warning) backgrounds
having a value other than 1. In this case, everything is as was
expected.
Excellent.
12
View this information online here,
http://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/evidence-package/#ReportProperties.html
http://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/evidence-package/#ReportProperties.htmlhttp://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/evidence-package/#ReportProperties.html
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Type/Class relations analysis The type/class relations analysis
checks to make sure that there are no cases where there are
conflicts in
the relations between concepts. There were not type/class
relations issues found in the Microsoft
report.
Excellent.
Reporting checklist and disclosure mechanics rules analysis
Certain disclosures are always required to be provided such as the
basis of reporting, nature of
operations, and revenue recognition policy. Other disclosures
are required if specific line items are
reported. The reporting checklist and disclosure mechanics rules
check a number of the very common
disclosures to be sure required disclosures are reported and
that the disclosures are represented
consistent with expectation.
XBRL Cloud13
The following inconsistencies were noted:
1. The nature of operations disclosure, which is required, was
not found.
2. There was a Level 4 Disclosure Detail found for restructuring
charges; however, there was no
Level 3 Disclosure Text Block for that disclosure which is
expected.
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View the full reporting checklist and disclosure mechanics rules
and validation results online here,
http://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/Disclosure%20Mechanics%20and%20Reporting%20Checklist.html
http://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/Disclosure%20Mechanics%20and%20Reporting%20Checklist.htmlhttp://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/Disclosure%20Mechanics%20and%20Reporting%20Checklist.html
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Disclosure mechanics relations analysis The disclosure mechanics
relations rules check each disclosure using automated processes to
make sure
that all XBRL-based disclosures are consistent with expectation.
This includes things like:
For each Level 3 Disclosure Text Block, a Level 4 Disclosure
Detail also exists.
Required concepts such as totals of a roll up exist as
expected.
Etc.
Of 68 disclosures checked for structural and mechanical rules,
all 68 were found to be consistent with
expected structures or the disclosure did not exist (shown in
gray) in any form in the report.
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Other observations The following is a summary of other
noteworthy observations:
Within the Microsoft report there were:
o 129 Networks
o 129 Components (Network + Table) which means Microsoft always
uses [Table]s and
always puts only one [Table] within a Network
o 194 Fact Sets which means that there are about 1.5 Fact Sets
per [Table]
o 2,519 facts were reported; that is an average of 12.9 facts
per fact set.
The following table shows the count of each type of report
element and the number of extension report
elements added for each category of report element14:
14
View information about extensions online at,
http://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/evidence-package/#ReportElementsAdded.html
http://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/evidence-package/#ReportElementsAdded.htmlhttp://xbrlsite.azurewebsites.net/2017/Prototypes/Microsoft2017/evidence-package/#ReportElementsAdded.html
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Analysis by other tools The following is information on other
tools that are available which can be used to measure the
quality
of an XBRL-based financial report:
XBRL Cloud Edgar Dashboard
https://edgardashboard.xbrlcloud.com/edgar-dashboard/?cik=0000789019&filterString=0000789019
https://edgardashboard.xbrlcloud.com/edgar-dashboard/?cik=0000789019&filterString=0000789019
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XBRLogic
http://asreported.com/post/the-xbrl-files-28-743-reasons
http://asreported.com/post/the-xbrl-files-28-743-reasons