Inappropriate Use of Consolidated Entities [Axis]

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Inappropriate Use of Consolidated Entities [Axis]

Staff in the Division of Economic and Risk Analysis conducted an assessment on the use of Consolidated Entities [Axis] in tagging financial statements, focusing on each issuer's last periodic report filed in 2025 whether on Form 10-Q or Form 10-K.

Consolidated Entities [Axis] is intended to be used for the values in a consolidating schedule. It identifies and disaggregates financial data for specific entities within a consolidated group, such as the parent, subsidiaries, or variable interest entities. Staff has observed certain issuers improperly using the "Consolidated Entities [Axis]" element to tag financial statements that are presented separately from the issuer's consolidated or combined financial statements. For example, one trust included the financial statements of both the trust and an operating entity through which the trust conducts its operations in its filing. The trust tagged the financial statements of the operating entity with Consolidated Entities [Axis] to differentiate them from those of the trust itself. However, as the operating entity is a distinct legal entity with its own CIK, Legal Entity [Axis], which is intended to be used only to identify legal entities, should be applied. In a different instance, a trust with multiple distinct series of units tagged each series' financial statements with "Consolidated Entities [Axis]." Because each series possesses its own investment objectives, strategies, and financial results, the trust should have treated each series as a separate reporting entity and used the "Legal Entity [Axis]" element.

Additionally, staff noted that certain issuers tagged receivables from affiliates or investments in related parties with Consolidated Entities [Axis] and Affiliated Entity [Member]. The information about related parties or affiliated entities should instead be tagged with Related and Nonrelated Parties [Axis] and Affiliated Entity [Member].

The Financial Accounting Standards Board's Generally Accepted Accounting Principles Taxonomy Implementation Guide Series - Dimensional Modeling for Disclosure of Consolidated and Nonconsolidated Entities provides examples of the modeling for reporting disclosures of consolidated and nonconsolidated entities, including the use of Legal Entity [Axis] and Consolidated Entities [Axis]. Filers are encouraged to review their dimensional tagging of financial statements and make necessary corrections. For more data quality reminders, see Staff Observations and Guidance.

Last Reviewed or Updated: March 19, 2026