2.1.3 Forecasted Information

Issue

There are a large number of facts that have a context date that is greater than the period end.  Some of these represent subsequent events, but a large number of reported facts have date contexts that are more than 90 days after the year end and, effectively, represent forecast values.  We observed that these forecasts of future transactions use three different element types that can be categorized into the following:

Line Items that can be used for Actual and Forecast Values

An element like Revenues can be used to define estimated future (Forecast) revenues and actual revenues. To indicate that a value is a forecasted fact, the forecast member should be used on the scenario axis and a future context date should be used to indicate the forecast period. However, the forecast member should NOT be used on line items that represent estimates accrued in the current period, such as Provision for Doubtful Accounts, as these represent estimates as of the current period.

Line Items that are Forecast Values but do not define the future Period

In these cases, the line item by its very nature is a forecast.  These are generally not defined in the taxonomy but appear in company extensions. For example, DefinedBenefitPlanEstimatedFutureCashContributionsAndBenefitPayments could be described to define estimated cash contributions and payments in future periods.  This element is an extension element and could apply to any future period.  To define that period, the future context should be used. The nature of the element defines that it is a forecast; however, for consistency, it is still recommended that the value be qualified by the forecast member so that consumers of the information know that it is a forecasted fact.  Where possible, use an element in the taxonomy that does not state it is estimated but can be described as an estimate of a future period by using the forecast member.

Line Items that are Forecast Values and define the future period relative to the current period

There are a number of these elements defined in the taxonomy.  Examples include items like DefinedBenefitPlanEstimatedFutureEmployerContributionsInNextFiscalYear, which explicitly state that the value is an estimate of the next fiscal year.

These items are specifically referenced in prior guidance issued in January 2011, which stated that these items should be reported using the current period context and should not use the forecast member.  These items are defined so that they intrinsically include the period context in the definition of the item usually using the current period context as a reference point.  In these cases, the current period context should be used in conjunction with the element. A listing of these elements in the taxonomy is described in the recommendation section.

What about values that are part actual and part forecast?

In some cases, companies report durational values with a context end date greater than the current date but a start date before the end date.  For example, a company may report pension contributions for the year in the third quarter.  The duration of the concept is for the year although the company is ¾ through the reporting cycle.  In this case, the total amount should be classified as a forecast using the forecast member.

What about String Items and Text Blocks?

String and Text blocks should always be reported with the current period context[1] and should not have a forecast member.

What about known future events?

In some cases, a future event is known today with certainty, such as  the maturity date for a debt instrument.  In a number of cases, filers are recording the future maturity date value with the context of the actual maturity date as opposed to the current period context.  Contractual aspects of an arrangement that are known obligations and/or rights at the current date should use the current period context and not the maturity date as the period context of the element. These fact values should not have a forecast member.

Estimates

Financial statements contain a large number of estimates, such as provision for doubtful accounts, that are either reported in the financials or used to derive financial statement assertions. Estimates can define facts in the current period or facts in future periods.  There are a number of reasons there are estimates that apply to the current period.  These are generally provisions against assets or revenues that exist at the current period but have not yet been quantified, such as provisions for loan losses, warranties, or the costs of environmental cleanup, that relate to revenues already recognized or provisions against existing assets. These estimates are not forecasts that apply to future periods. These elements should use the current period context as they relate to the financials at that point in time and should not use the forecast member.

When would I use the Actual Member?

The actual member is not required to be used to report actual values.  All values reported are assumed to be the actual value. As such, the actual member should not be used.

What about Subsequent Events?

Subsequent events should not use a forecast member; however, they should use the period when the subsequent event occurred even though it is subsequent to the current period, as set forthe in 2.1.2 Subsequent Events and Durational Concepts.

Recommendation

If you are reporting a forecast value for a future period, then you should use the line item and dimensionalize it using the forecast member on the scenario axis and define the context for the future period.

In those cases where the line item embodies a future estimate or forecast of a future value, then continue to use the forecast member even though the line item expresses that it is a forecast (resulting in redundancy in the tag). The context period should be for the future period.

In the case where the line item describes the period context in the element relevant to the current context, i.e., something like lease payments in year 2, then report the fact using the context of the current reporting period and do not use the forecast member. For example, if  you tagged a value with the element DefinedBenefitPlanExpectedFutureBenefitPaymentsInYearOne, then you should use the current context.

Any value with a context period later than the filing date should have a forecast member unless it is a subsequent event.

[1] The period end date of this context should be the same as the current context described in the Edgar Filer Manual, Volume 2 at 6.6.1 and 6.6.2.