XBRL-based Digital Financial Reporting

Back in 2018 I noticed something that I referred to as a fact ledger, see Introducing the Fact Ledger . I described a fact ledger thus:  "A fact ledger is a new type of ledger that offers utility and leverage when accounting, reporting, auditing, and analysis is done in a digital environment. My thinking on this has evolved and now I see what I would call a business events ledger .  And I am not the only one that sees this.  Kurt Cagle has the notion of what he refers to as an event graph or event ledger (see  Coherence, Holons, and the Spinning of Plates ).  Another accountant seems to have a similar idea and created an "events ledger".  I don't have permission to show this to you at the present time. And so fundamentally, my original notion of a "fact ledger" is an "event graph" or "event ledger" in terms of a holon as described by Kurt Cagle, see my Example Financial Statement Holon .  Applying this specifically to financial statement...

The two articles, Against the Stream and Meaning is Not Metadata  highlight a problem that I have experienced myself and have tried to solve related to digital financial reporting by creating things like my Logical Theory Describing Financial Report . Communication between business professionals that need software to do something and technical professionals that build that software is hard.  Very hard.  But it is important to persist to make sure the foundation is right. Why? Because you cannot retrofit a foundation to fix a foundation. The first article points out a "shared fiction" that currently exists between business professionals and technical professionals. What is important to understand is the ramifications of that shared fiction.   One ramification that I have experiences is software that is overly flexible in undesirable areas which results in software that is harder to use than it really needs to be.  Flexibility makes things more complicated. ...

Heard a new term, spreadsheet monkey . A spreadsheet monkey  (a.k.a. Excel monkey , spreadsheet robot , data janitor) is a colloquial term for someone whose work revolves around repetitive spreadsheet tasks; like copying, pasting, reconciling, and formatting data; rather than engaging in higher‑level analysis or system design. The phrase captures the frustration of professionals trapped in manual workflows that could be automated or structured through better data integration. In essence, a spreadsheet monkey symbolizes the human cost of fragmented information systems: people acting as the “glue” between disconnected databases and reports. A spreadsheet monkey is someone stuck doing repetitive, manual, error‑prone spreadsheet tasks instead of strategic, automated, or model‑driven work. A spreadsheet monkey is someone who connects the " bucket brigade " of spreadsheets. This role will be changing.  Artificial intelligence will reshape accounting and finance . One new audit firm...

Accounting using the double entry bookkeeping mathematical model is a brilliantly engineered information system that, if utilized correctly, really can provide valuable outcomes. Initially developed in around 1211 CE by Italian bankers and then formally documented by Luca Pacioli in 1494 , double entry accounting will thrive in the era of artificial intelligence. Why? In order for artificial intelligence to make the best use of accounting information, the semantic fragmentation needs to be minimized. Minimizing that semantic fragmentation will allow traceability to be maximized. The human bucket brigade that is a significant portion of accounting, reporting, auditing, and analysis today will be rethought. At it's core, accounting is about capturing information related to business contract for an economic entity.  This is explained thoroughly by Theory of Accounting and Control . Those business contracts result in business events that are then entered into an accounting inform...

As I have mentioned in other posts on my blog, a financial statement is a formal semantic structure , in fact a financial statement is a special type of formal semantic structure referred to as a holon . As I mentioned in my blog posts, Kurt Cagle and Chloe Shannon are providing a lot of very good information about holons on their substack. I have provided a bunch of good examples of financial reporting frameworks and reports   In this blog post I want to focus on one specific financial statement and see if I can explain that a financial statement is a "container" of  blocks of information and the "information blocks" that the financial statement contains. Cagle and Shannon point out that a holon is made up of four distinct knowledge graphs that maximize coherence and operationalize the holon which are: The Scene Graph or Interior State (a.k.a. the knowledge graph) The Boundary Graph (a.k.a. the control plane; the boundary layer) The Event Graph (a.k.a. the event...

I have done my best to explain/describe what an information block  (a.k.a. block, fact set) is and what it does.  The best summary is here at this blog post, Core Pattern . Another explanation is in the document Blocks . This  Master Class in Representing Financial Statement Logic Using XBRL  represents the exact same information 10 different ways using XBRL where the information itself does not change,  only the XBRL technical syntax used to represent the information changes. Why are those 10 different examples important? Because they really help you get your head around the notion of the information block. Anything in an information block that is not made explicit is therefore implicit which means that you are allowing anyone and everyone to make whatever assumptions they choose to make. Implying something and making incorrect assumptions lead to defects in interpretation of information and the assumptions are a source and of confusion, misunderstanding, and c...