On September 24th, the SEC’s Division of Economic and Risk Analysis (DERA) announced that it had concluded an assessment of how filers are tagging provision (benefit) for credit losses on income statements. Staff performed the assessment on Forms 10-K and 10-Q that have one or more custom tags for tagging the provision (benefit) for credit losses section of the income statement.
Staff found that certain filers are creating custom tags for the provision (benefit) of credit losses on unfunded commitments when this amount is presented separately on the income statement. Staff reminds filers that the standard element us-gaap:OffBalanceSheetCreditLossLiabilityCreditLossExpenseReversal should be used to tag this amount.
Staff also noted that some filers are creating custom tags for total provision for credit losses when they have both on-balance sheet (loans held for investment) and off-balance sheet (unfunded lending commitment) credit loss exposures. Staff reminds filers that the standard element us-gaap:ProvisionForLoanLeaseAndOtherLosses to tag total provision (benefit) should be used for credit losses presented on the income statement. This element is applicable to credit losses on all exposures, including but not limited to loans, investment securities, leases, and off-balance exposures.
The comparability and usability of the information disclosed is greatly reduced by tagging the provision (benefit) for credit losses using a custom tag when a standard tag is available. The SEC urges filers to carefully review their current tagging for provision (benefit) for credit losses, and then implement necessary adjustments.
For more data quality reminders, see the Staff Observations and Guidance webpage on sec.gov.
Source:
Inappropriate Use of Custom Tags for Provision (Benefit) for Credit Losses on the Income Statement (sec.gov)
