Recognizing that You are Part of a Supply Chain

It seems to me that many people, if not most, have not wrapped their head around the idea that they participate in a supply chain.  Silo thinking was OK before the internet existed.  But now, with the internet, things are different. Kevin Kelly's book New Rules for the New Economy explains these new rules.

Consider the following which I have tried to represent in the graphic below.  Take the notion of, say, the Accounting Equation.  In human readable terms, the accounting equation is: Assets = Liabilities + Equity. Should each of the member of this community define this basic model used in the double entry bookkeeping mathematical model or should there be one central definition that is shared and everyone uses?

Here is my definition of the accounting equation in machine readable form using the global standard XBRL.

Here is a quick inventory of other definitions or descriptions of the accounting equation or things that include the accounting equation.

• Wikipedia
• Wikibooks
• CIO Wiki
• Basic Accounting Equation
• Accounting Notes
• 11 Basic Accounting Formulas
• College Accounting
• Accounting Equation Explained
• Success Center Accounting Tips
• Rules of Debits and Credits
• Accounting Cheat Sheet
• Another accounting cheat sheet
• MBA on one page
• FASB SFAC 6 (defines 10 elements of US GAAP, three of which are assets, liabilities, and equity)
• Accounting Standards Codification (ASC, defines and describes all of US GAAP, including assets, liabilities, and equity)
• Intermediate Accounting Text Book (where you learn about SFAC 6 for US GAAP or the equivalent for IFRS)

What if we had one version of the accounting equation and each of these descriptions referenced that common description that exists in machine readable form.

The accounting equation is just the tip of the iceberg.  The US GAAP XBRL Taxonomy has about 17,000 concepts defined.  A similar number exists for IFRS most likely.  But US GAAP and IFRS have even more terms.  Accounting working papers and audit working papers have even more.  Reporting economic entities define even more terms and fit them into the other terms defined by the FASB or IASB or other standards setter or regulator.

Here is a comparison of the elements of financial statements for a handful of financial reporting schemes.

Wiring all this stuff together for the financial reporting supply chain, things will work differently.  Who is going to do this wiring?  ChatGPT? Don't count on that. ChatGPT is not precise enough. Tools will very likely be created to help, like this tool.

All this will be a lot of hard work, but it is going to happen...it is already happening.  But this curated knowledge will be the new gold of the information age.  Software will be supercharged.