XBRL-based Digital Financial Reporting

When technical people start talking about knowledge graphs, they often tend to start spewing out terms like "nodes" and "edges" and "RDF".  Also, software vendors tend to say that only their technology implementation is a real knowledge graph. Rather then spending time describing technically how to create a knowledge graph, I am attempting to take a different approach in my document, Representing a Logic System (a.k.a. Knowledge Graph) Using Global Standard XBRL . A knowledge graph is a logic system (a.k.a. formal system).  A knowledge graph is not about the technical artifacts used to represent the logic in the knowledge graph (i.e. nodes and edges); a knowledge graph is about the logic contained within the knowledge graph, the logic system being represented. Some logic systems, like general purpose financial reports, demand extremely high quality.  How are you going to achieve that? Gartner coined a new term, decision intelligence  and the notion of a de...

"If the only tool you have in your toolbox is a hammer, then everything looks like a nail." Silos can cause problems.  It has been my observation that many, too many, information technology professionals don't know about and therefore do not leverage available tools.  This is problematic .  Also, to me there does not seem to be any sort of "building code" that is being followed for IT systems. Information technology (IT) involves the practical application of computer systems and software to store, retrieve, transmit (exchange), and modify data.  Tools they use include computer hardware, software applications, programming languages, networking, and data management schemes.  IT is essential for business enterprises to manage their technology infrastructure, keep that infrastructure operating smoothly, keeping things secure, and communicating effectively. Computer science  (CS) involves the study of algorithms, data structures, programming, analyzing data, an...

For some systems, maintaining control of the system is paramount. General purpose financial reports is one such system.  High quality is expected, even demanded. High quality is a requirement of the system. Paraphrasing from this definition ; requisite variety , in the context of computer science, refers to the principle that in order to effectively regulate a system, the regulator of that system must possess a sufficient range of actions to counter act the variety of important potential disturbances that system might encounter.  The principle of requisite variety ensures that the system's internal state remains as close as possible to the desired goal state of the system. Effectively, requisite variety requires that there be a balance or "matching" between the potential " perturbance variety " or potential possible disturbances which may occur within a system and the " control variety " which is the information such as rules available to the system to...

A system is a set of elements, categories or sets into which the elements fall, and interaction patterns that describe the interactions between the different types of elements within a system. (a.k.a. formal system ) A system has a level of  complexity .  There are two groups of complexity: complex and non-complex .  Non-complex systems are computable, they have computability . Complex systems are not computable. A system can be simple, complicated, or complex. ( See this explanation of system theory .) Non-complex Simple system : The system is "non-complex" and therefore computable; clear and obvious for a non-subject matter expert to understand, and the set of elements, categories, and interaction patterns are fully understood.  Control techniques can be used to eliminate all risk from the system. Complicated system : The system is "non-complex" and therefore computable; clear and obvious for a subject matter expert in the area of knowledge to which the system rel...

A new type of tool will be available (is becoming available) to support professional accountants.  This tool is somewhat similar to the traditional electronic spreadsheet but it works differently and provides different capabilities to professional accountants. This new tool will supplement the arsenal of tools available to accountants, auditors, and analysts. This new tool is semantic oriented, model-based, and a global standard technical format.  To describe this tool in the past I have used the terms " modern spreadsheet " and " professional knowledge graph " and " deductive apparatus " and " semantic oriented accounting and audit working papers " and " knowledge product " and " logical spreadsheet " and " logic programming " and " logical digital twin of financial reports ". This new type of tool will help usher in modern accountancy . In this new era, machines will support accountants, auditors, and ana...

XBRL is a modular set of global standard technical specifications (information system) for exchanging  transferring knowledge.  The following is an explanation of the layers of knowledge within and XBRL-based technical artifact.  The foundational or fundamental technical artifacts or technical building blocks are: XBRL instance : Provide Facts , provide Contexts which differentiate facts form one another, provide Units which enhance the description of Facts more precisely, provide XBRL Footnotes that provide additional information about a Fact or can be used to connect Facts together. XBRL taxonomy schema :  Define XBRL  Elements , define Roles , define Arcroles . Used by XBRL instances and XBRL linkbases. XBRL linkbases : Define Relations between XBRL Elements, provide additional Resources (Labels, References, Formulas); provide Networks or groups of Relations. Inline XBRL : XBRL Facts which have been embedded within an XHTML document. (Still connected to a r...

First, I have tried and tried to find a simple, practical, and complete explanation of the high-level model of a logical system. Rather than find that, I have found 50+ incomprehensive descriptions, most of which are incomplete.  Second, at the logical level of a system, the logical model of that system should be exactly the same for any physical implementation.  Meaning, the high-level logical model of EAV, RDF, PROLOG, GQL, XBRL, or any other physical implementation should be exactly the same. Further, propositional logic and predicate calculus likewise should be able to be described at a high level. Here is my attempt to provide a practical, simple explanation of a logical system which is approachable to liberal arts majors (i.e. nontechnical oriented, an explanation approachable to business professionals). Effectively, I see this as a "meta-meta-model" that every logical system falls within. Simple, Practical Explanation of a Logical System Logic is a formal set of princi...

A model-based financial report created using the Seattle Method  or the forthcoming Standard Business Report Model ( SBRM ) is a deductive apparatus. A deductive apparatus  (a.k.a. formal system , axiomatic system , formal theory ) is a formally specified, well-formed, and completely described system that is understandable by both humans and by machines.  A deductive apparatus is a tool.  That tool helps the user of that system to draw correct conclusions using that system. A deductive apparatus is a problem solving system . A well-formed system is a system that adheres to specific rules, standards, or conventions. This ensures consistency, predictability, and interoperability. Effective automation (i.e. human-task performance ), such as algorithmic regulation , can be achieved using a well-formed and completely described deductive apparatus. Such a deductive apparatus consists of a particular set of axioms, a set of inference rules that enable derivation of th...

In a prior blog post I introduced what I referred to as the world's first standards based expert system for creating financial reports.  As far as I know that description is precise, but it is not accurate as it really should be. What I really helped to create was a model-based financial report creation software application that was, in fact, a rules-based expert system .  That software application is called Auditchain Luca . You can try Luca (as of this writing) yourself.  This rather old video playlist shows you some of the capabilities of Auditchain Luca. Many newer features were added since those videos were created. Auditchain Luca is based on research, reverse engineering of thousands of XBRL-based reports submitted to the SEC and ESMA, other work done with XBRL Cloud  in the very early days of XBRL-based reporting to the SEC,  the working proof of concept Pesseract , constructing early version of both the US GAAP and IFRS XBRL taxonomies, building soft...

"Paper is just an object that information has been sprayed onto in the past." Ted Nelson A financial report (a.k.a. financial statement, general purpose financial statement ) is a tool designed by humans. Financial reports are knowledge graphs . Financial reports have an extra-fancy global standard technical format used to represent those financial report knowledge graphs. The semantics, or logic, of a financial report is described by the Logical Theory Describing Financial Report . The following describes the logical pieces of a financial report and the logical patterns of how those pieces relate to one another as best as I can describe them: ( click here for dynamic model ) For the first time in 7,000 years , both humans and machines can reliably understand information, to a certain degree, being exchanged by these tools. Algorithmic regulation is really a thing. Additional Information : Puzzle Pieces of Digital Financial Reporting Simple Explanation of Logical System and...

This blog post is to test representing SFAC 6 elements of financial statements on Wikidata and seeing how this works.  Here is my experimentation: Here are the terms defined by SFAC 6 in a human readable form. This is a previous representation that I created using XBRL  and is readable by both humans and machines.   Here is similar information on Wikidata for the terms defined by SFAC 6 . Here is a RESTFUL URL that takes you to the Wikidata Query Service and query information on Wikidata. Here is a RESTFUL URL that takes you directly to a web page that is generated from the query. And below is that same query embedded within this web page. This is cool and useful stuff. Think information Lego blocks.  Don't understand what I am saying?  Time to up your digital proficiency . Remember, this is an experiment; a prototype.  I had to trim the descriptions because of an apparent limitation on the number of characters you can provide within a descripti...

On a conference call I was on the other day, someone mentioned Wikidata .  I knew that Wikidata existed, but I really did not understand what Wikidata really was, how it worked, or what you can do with Wikidata. And so I thought it was time for me to kick the tires of Wikidata and figure out what it actually was. To learn about Wikidata I modeled the accounting equation and SFAC 6 elements of financial statements using Wikidata. Seeing what I could do with Wikidata can totally changed my life. Wikidata calls itself a "free knowledge base that anyone can edit". But what Wikidata is is much, much more than that.  Wikidata is a well engineered cloud-based, web-based collaborative platform. Wikidata is free, anyone can read from the knowledge base or write/edit to add or change information in the knowledge base similar to how you can modify Wikipedia.  Not only can humans use the GUI/UX to create/read/update/delete ( CRUD ); so can machines. Another thing which does not seem...

A logical theory describes the logical patterns that make up some logical conceptualization.   A logical theory enables a community of stakeholders trying to achieve a specific goal or objective or a range of goals/objectives to agree on a shared understanding of some area of knowledge.  A stakeholder is anyone that has a vested interest in a logical system. Foundational to arriving at harmony between the stakeholders of a system is having a common logical conceptualization for thinking about and discussing the system. The Logical Theory Describing Financial Report   is a document that I wrote to describe the logical patterns of a financial report.  I have represented that information in many forms including UML , a dynamic rendering in HTML , in XBRL (see the section Technical), a video playlist on YouTube , and other such representations. Now, I am going to describe that information using Wikidata . Here is a reference to the Logical Theory Describing Financi...

The accounting equation  (a.k.a. the balance sheet equation) is the foundation for the double-entry bookkeeping system and the cornerstone of the science of accounting. Here is the accounting equation on Wikidata . Fundamentally, Wikidata is a set of logical statements. Here is the accounting equation implemented in XBRL . Here is the XBRL referenced to the  Wikidata entry . Wikidata is cool!  Linking the Wikidata information to the XBRL-based information is even cooler.  Don't understand why this is cool?  Then you need to increase your digital proficiency . Additional Information : Accounting Equation for Beginners (Video) How to add a new item to Wikidata Wikidata: Introduction Wikidata: Tutorial: Introduction to Basics  (Video) Wikidata REST API Wikidata Data Access Financial Statement (Wikidata) Wikidata Query Service Query of accounting terms Query examples Embeddable query Wikidata Property Explorer Etherpad (Collaboration tool) SFAC 6 Term (Eleme...