XBRL-based Digital Financial Reporting

I am thinking of creating two common practice financial reporting taxonomies.  One for US GAAP and one for IFRS.  These XBRL taxonomies would be for small and medium sized enterprises (SMEs).  There are several reasons to do this. Currently, the IFRS Foundation is reluctant to provide common practices concepts in their XBRL taxonomies. Currently, the IFRS Foundation is reluctant to include commonly used subtotals in the IFRS standards or the IFRS XBRL taxonomy. Both the US GAAP and IFRS XBRL Taxonomies are not very well represented.  Both disregard XBRL International Best Practices guidance for using XBRL dimensions by mixing their modeling approaches (e.g. sometimes hypercubes are used, other times hypercubes are not used). Neither the US GAAP XBRL Taxonomy nor the IFRS XBRL Taxonomy can be considered complete.  Both leave out important mathematical computations that need to be represented using XBRL Formula. Neither the US GAAP XBRL Taxonomy nor the IFRS XBRL...

This article, GPT-4 has a trillion parameters , helps one understand how good ChatGPT can be currently and how to make it better.  It also helps one recognize how customizable or custom LLMs will be used in the future. The US GAAP XBRL Taxonomy published by the FASB  could be an enabler for a rules-based reporting system.  But it is not currently because it does not represent the necessary rules correctly or completely.  What that XBRL taxonomy is, effectively and admittedly, is a human readable "pick list".  So a rules based system would have a hard time using that US GAAP XBRL Taxonomy or reports created using that taxonomy.  Similarly, all of the report in the SEC’s EDGAR system that use that US GAAP XBRL Taxonomy are not of the right quality for a rules-based system to make use of the reports effectively. All of the above is similarly true of the IFRS XBRL Taxonomy and the financial reports submitted to the ESMA using that IFRS XBRL Taxonomy . However...

Massachusetts has a Uniform Financial Report (UFR) and an eFiling system that excepts those reports.  CPA firms such as AAFCPAs and Daniel Dennis & Company, CPAs  (among many others).  Some CPAs have gone as far as creating Excel spreadsheet add-ins for creating and working with these reports . The Operational Services Division ( OSD ), the operator of the eFiling system, describes the UFR as follows: "The Uniform Financial Statements and Independent Auditor's Report (UFR) is the set of financial statements and schedules required of human and social service organizations who deliver services to the Commonwealth's vulnerable consumers via contracts with state departments." The UFR includes an organization’s financial information and is used by OSD and the funding agency to determine if any contracts have been overbilled or if excess annual surpluses have been generated. You can also SEARCH the filed UFRs . Here is the UFR Audit and Preparation Manual , essential...

Benedikt Kotruljević pointed out that humans can often be shifty and immoral. So, who the heck was Benedikt Kotruljević? As the article, So, Who Invented Double Entry Bookkeeping? Luca Pacioli or Benedikt Kotruljević? , points out; Benedickt is one of those credited with "inventing" double-entry bookkeeping.  As I understand it, the first documented use of double-entry bookkeeping was by a Florentine bank in 1211 ( per this source ). As I understand it, Luca Pacioli was the first to thoroughly document best practices of double entry bookkeeping in 1494, the best  universal technology of accountability  available at the time.  As I understand it, Benedikt Kotruljevic (a.k.a. Benedetto Cotrugli Raguseo) wrote a book The Book on the Art of Trading  ( available on Amazon ) which included a description of double-entry bookkeeping, in 1458 ( per this source ). Notice how providing information can enable you to reach your own conclusions?  That, in my v...

The expert systems that I have helped to create thus far have been more similar to CAD/CAM type systems than BIM system.  But, the future of financial reporting will be more like BIM than CAD/CAM. Now, most people will not understand the above statement.  I don't really expect them to.  That statement is not for you.  That statement is for those trying to understand and figure out how to build those tools.  But if you want to understand, you can.  You just need to do the work. CAD/CAM is older technology, developed in the 1960s but took off in the 1980s and 1990s. See this History - and Future - of CAD/CAM Technology .  See this information about CAD/CAM on Wikipedia . BIM , or Building Information Modeling, was developed beginning in about 1992.  See this History of BIM . Also see this information about BIM on Wikipedia . This video, CAD vs BIM - The Fundamental Difference , explains the fundamental difference between CAD/CAM and BIM.  As I...

To understand one of the big problems the OMG Standard Business Report Model (SBRM) should be trying to solve; all you have to do is look at what happened with CAD/CAM software.  You can get a sense of this from the article, Is the CAD Interoperability Problem Over?   Or, have a look at the different CAD/CAM technologies and formats : Resources: The CAD Interoperability Survival Guide IEEE Interoperability among CAD/CAM/CAE Systems The History - and - Future of CAD/CAM Technology History of CAD Software (Wikipedia)

The article, How Expert Systems & Legal Document Automation Can Help Law Firms & Freelancers Stay Competitive , makes what could be considered a provocative statement but a statement that I believe is very true.  Also, take that article and change the term “Law Firm” to “Accounting Firm” and “lawyer” to “accountant”; the ideas apply equally as well to both areas of knowledge. That statement should be unpacked a bit.  How could you POSSIBLY automate things without developers???  That is impossible.  Well, so actually, it is not.  This is what the article is really saying.  You build what I might call a "platform" and then use that platform to build the powerful expert system.  The article says there are two things necessary to build an expert system; but I say there are three: First you need to build a knowledge base of declarative, machine-readable rules.  And I say that the knowledge base should be created using some global standard such...

XBRL is an agreed upon industry standard technical syntax that enables information exchange.  XBRL is not a "system".  You can use XBRL as part of a system; but XBRL, by itself, is not a system. The graphic below summarizes what is necessary to achieve the effective exchange of information. That graphic above is the big picture; the Seattle Method is an approach to achieving that big picture: the effective, reliable exchange of information that is approachable by business professionals . The Seattle Method is not a system; it is an approach, a method, to building such a system.  There are other approaches/methods to building such systems. One of those other approaches is the forthcoming Standard Business Report Model ( SBRM ) which is a logical conceptualization of a business report. Auditchain's Pacioli and Luca are not systems. They are tools.  Those tools might be used as part of a system for exchanging information.  Those tools are pretty easy to use as...

I have put together a good practices based repository of XBRL-based reports to show how to build such repositories and understand how to effectively extract information from XBRL-based report repositories. Here is my repository : There are currently four reports in the XBRL-based report repository but I want to get the set of reports up to maybe 10 or 20.  The primary purpose of creating this is to (a) show people how to build such repositories, (b) explain to people how to effectively extract information from such repositories, and (c) test software applications that are built to extract information from such XBRL-based machine readable report information repositories. One important thing to note is that each of the four reports uses a different combination of balance sheet and income statement styles.  There is a net assets, classified, and liquidity based balance sheets.  There are income statements by function and by nature.  This helps one understand the notion ...

There now exists a global standard digital semantic information block that is easy for the average business professional to use.  But don't take my word for it.  Watch this short video, DEMO: Editing Multidimensional Logical Model , which demonstrates how easy these global standard information blocks are to use. Here is one example of a such an information block. What you see below is a multidimensional roll forward information pattern. For additional examples of information blocks see this showcase of reports  which shows the many different information patterns that are supported, how information blocks can be combined to form reports of different kinds including financial statements, and so forth. Think "pivot table" or "cubes" of data.  But these pivot tables or cubes are (a) readable and understandable to both humans and machines (b) are built to be shared over the Internet.  Here are some of the features of the global standard digital semantic information ...