On August 27th, the SEC’s Division of Economic and Risk Analysis (DERA) completed an assessment of the tagging in Business Development Companies’ (BDCs’) consolidated statements of operations in Forms 10-K for fiscal year 2025. In conducting this assessment, staff noted several recurring issues in the way certain income and expense line items were tagged, indicating that many filers continue to apply elements that do not align with the structure of BDC financial statements.
More specifically, staff noted the following tagging errors in BDCs’ statements of operations:
- Investment Income Elements - interest and dividend income were incorrectly tagged using us‑gaap:InvestmentIncomeInterest and us‑gaap:InvestmentIncomeDividend. The correct tags for BDCs are us‑gaap:InterestIncomeOperating and us‑gaap:DividendIncomeOperating.
- Net Investment Income - the element us‑gaap:InvestmentIncomeNet was mistakenly applied to Total investment income, Net investment income before tax, and Net investment income after tax. The appropriate elements are us‑gaap:GrossInvestmentIncomeOperating, us‑gaap:NetInvestmentIncome, and us‑gaap:InvestmentIncomeOperatingAfterExpenseAndTax.
- Operating Expenses - the element us‑gaap:OperatingExpenses was incorrectly used for Total expenses before waivers or deductions. BDCs should use us‑gaap:InvestmentCompanyInvestmentExpense
The Financial Accounting Standards Board’s GAAP Taxonomy Implementation Guides series – Financial Services – Investment Companies (including SEC S-X Schedules for Business Development Companies) provides an example of tagging for the consolidated statements of operations. Filers are encouraged to review their tagging of this statement and make necessary corrections.
For more data quality reminders, please visit the Staff Observations and Guidance webpage on the SEC’s website.
Source:
Incomplete and Inappropriate Tagging for Business Development Companies’ Schedule of Investments (sec.gov)
