Example Regulatory Reporting Scheme Working Prototype: Common Elements of Financial Report

This blog post explains a completely new approach to regulatory reporting.  This prototype uses a very basic, simple example of a reporting scheme to keep this first example easy to explain.  See the "Additional Information" section below for more sophisticated report fragments.

This regulatory reporting scheme is created using the Seattle Method framework. To test the framework I created about 35 different reporting schemes. Here is the list which contains pointers to all reporting scheme metadata. Those 35 different reporting schemes were used to test the framework.

For this demonstration I will use the Common Elements of Financial Statement (Version 3) (Four Statement Model) prototype financial reporting scheme.  Imagine that as an example of a regulator reporting scheme.

Step 1 would be for a regulator to create and publish their reporting scheme using the XBRL global standard following the good practices specified by the Seattle Method.  That includes publishing all the necessary machine-readable rules specified by the Seattle Method to enable verification that submitted reports have been correctly created.

Step 2 would be for a regulated entity to create their report using any of the many software applications for creating XBRL-based digital financial reports.

Step 3 would be for the submission mechanism to verify that reports satisfy all published machine-readable reporting rules.

Step 4 would be to put the reported information into a repository that is private to the regulator or publicly available.

Step 5 would be for analysts to extract information from the report repository to automate many aspects of their analysis process.

Here is a video showing how easy it can be to create an XBRL-based digital financial report. Again, in this case I am using the Common Elements of Financial Statement (Version 3) in the video. Don't get hung up on the rather simple nature of the reporting scheme.  Again, see the "Additional Information" section for more sophisticated reporting schemes.

Note that different mechanisms can be used for creating a report.  Templates could be loaded from a reporting scheme; the reporting entity can manually modify the template(s); report facts can be pumped into the report using an API or Excel/JSON import. This video shows a combination of different creation approaches.

Additional Information:

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