Attention all auditors, financial planners, directors of SEC reporting, and anyone else curious what your peer companies are disclosing in financial statements—Calcbench now has an easy way to find and compare patterns of disclosure in groups.
You’ll find this feature on the Footnotes Query page, tucked away on the left side of your screen under the first pull-down menu. Underneath that pull-down menu is a line of text, ‘Show Disclosure Pattern for Peer Group.’ (See Figure 1, below.) Just Click on that link, and you’ll see disclosure patterns neatly presented in table format.
Let’s walk you through it.
As we said, begin on the Footnotes Query page. You want to spend most of your time tinkering with the Choose Companies feature on the upper-left corner of your screen; the more you refine your choices to get the peer group you want, the more precisely Calcbench can render disclosure patterns within that group.
For our purposes here, we hit the Choose Companies button, then went to the Mining sector, and then specifically to the Oil & Gas Extraction industry after that. The Calcbench databases return a list of roughly 500 companies, although you won’t see all of them at first glance. That’s too many, so we also set a filter to screen out all companies with annual revenue below $10 billion; and by default, the database returns results based on the most recent calendar year (which in this case is 2015).
Then you hit the ‘Show Disclosure Pattern for Peer Group’ URL, and you see something that looks like Figure 2, below.
This is a display of all the types of disclosures made in calendar year 2015 for our peer group of Oil & Gas Extraction businesses with $10 billion or more revenue. You can see that all companies disclosed commitments and contingencies. Three of them (Chesapeake Energy, Schlumberger, and Transocean) disclosed something about basis of presentation. All disclosed accounting policies as well.
Calcbench tracks lots of disclosures, so for the sake of brevity, we also jumped further down the list to show a few more, in Figure 3 below.
Again, as you can see: all companies in our peer group disclosed earnings per share. Only one, Occidental Petroleum, disclosed environmental remediation obligations. Anadarko Petroleum and Chesapeake Energy disclosed investments and joint ventures reported under the equity method of valuation.
All of this is an example of how you can compare disclosures made within one industry. Perhaps you’re the director of external reporting at your company, and want to see what your peers are disclosing (or how they disclose it). You can use this tool to see that information at a glance. Or you might be an auditor, and you want to benchmark your client’s disclosures compared to peers. Maybe you want to see how disclosures in your industry have changed over time—say, oil & gas companies revaluing reserves in the ground, as prices continue to flat-line.
You can also use the disclosure pattern feature to compare one industry to another. To demonstrate that point, we also used the Choose Companies feature to create a peer group of retail clothing stores with $5 billion or more in revenue for 2015. That group’s disclosure pattern looks like this, in Figure 4 below.
Compare these results with the oil & gas folks in Figure 2, above. You can see that more than half of the oil and gas companies disclosed asset retirement obligations, while none of the retailers did. That makes sense; oil companies have huge drilling fields and offshore rigs that need careful, planned shut-down once they become obsolete; retailers generally rent store space, that can be leased to other tenants on short notice. Retailers are also much less likely to disclose exit costs and discontinued operations. (See Figure 5, below.)
A few other tips to Show Disclosure Pattern…
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