Guest blog post by Robson Glasscock, CPA and Ph.D Candidate. Robson uses Calcbench data in his
dissertation project and is sharing some of his findings here.
One of the benefits of using XBRL data from Calcbench is the ability quickly obtain data that would otherwise only be available via manual searches of EDGAR filings. As accounting rules and disclosures evolve other database services may eventually be updated to include the new information, but real-time access to machine-readable data from fillings is advantageous for a variety of reasons.
The current example is related to firms that hold Level 3 instruments per Accounting Standards Codification (ASC) 820, and recognize valuation changes in instruments still held at the balance sheet date (i.e., mark-to-market adjustments) in earnings. ASC 820 defines Level 3 assets and liabilities as being valued using “unobservable” inputs. The standard goes on to say that unobservable inputs, “… reflect the assumptions market participants would use when pricing the asset or liability.” This post explores whether these assets and liabilities are typically held by financial services firms and, if not, which non-financial services industries tend to hold more Level 3 instruments.
Between January 1, 2009 and July 1, 2013, XBRL data is available for approximately 186 firms that report unrealized gains/losses on Level 3 instruments in earnings. Of these, 103 firms are financial services firms and 83 firms are non-financial services. Contrary to what many people might think, including many academics I have spoken to, Level 3 holdings do not appear to be dominated by financial services entities. Within the non-financial services firms, the two-digit SIC codes with the largest representation are 49 and 13, respectively. Industry specifics are reported below:
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