XBRL-based Digital Financial Reporting

Record to report is the process of recording financial transactions that eventually make their way to the financial report.  This blog post summarizes information related to recording transactions into an accounting system database prototype that I created in Microsoft Access, representing that transaction information using XBRL, summarizing the transaction information into what would go onto a financial report, and then generating that financial report in the global standard XBRL technical format. Here is all the raw material and results: Record  (This is the XBRL taxonomy that supports representing the transactions .) Record-to-Report  (This is the XBRL taxonomy that supports creation of the report .) BONUS : This is the same transaction information represented using XBRL Global Ledger. In this prototype to make things easer to represent, I focused on general journal transactions.  Subsidiary ledgers would work in a similar manner, there would just be significantl...

Deloitte provides a presentation, Building Workiva into a cross-functional reporting platform though ERP integration , in which they provide a reporting modernization framework. In the presentation they state that the goals of reporting modernization as being: quality , value , effectiveness , control . In that presentation, the following example process flow is provided: (page 5 in the PDF) Per that presentation (from 2021), Deloitte and Workiva have an alliance and they use this report modernization framework with, it would seem, larger Fortune 500 or maybe even Fortune 1000 enterprises which use likes of SAP, Oracle, Workday, Anaplan (AI-infused scenario planning and analysis), Blackline (financial operations platform), Alteryx (AI-guided solution for data automation and analytics tasks). Basically, the big boys. But what about everyone else? Not everyone can afford Workiva. What do they do? Also, note the "master spreadsheets" by the green dot with the "5" ...

I have used the term "model-based reporting".  Someone else uses the term "model-driven reporting". The graphic below shows the benefits of modern model-based or model-driven reporting as contrast to traditional presentation-based reporting: Fundamentally, in presentation-based reporting you use a presentation oriented tool such as Microsoft Word which understands documents or Microsoft Excel or Google Sheets that understands the workbooks, sheets, columns, rows, and cells of an electronic spreadsheet.  Because information is presentation oriented; The presentation oriented software application has an excellent understanding of the presentation information; but no understanding of the meaning of the information within the presentation. Therefore, (a) the software cannot really help the software user work with the information other than organize the presentation and (b) down stream processes cannot parse the presentation information reliably. It is difficult to take ...

In 1951, a meeting began at Bell Labs when a vice president walked into a room full of engineers and started, “ Gentlemen, the telephone system of the United States was destroyed last night. ” The resulting conversation is interesting and the video and narrative under "Additional Information" below has all those details. But here is the essence of that conversation: If you could do whatever you wanted to do right now, what would you do to replace it?   If you don’t know what you would do if you could do whatever you want; how could you possibly know what to do if you cannot do whatever you want? We spend a lot of time redesigning systems which should be destroyed. Obviously, we all cannot all simply discard every existing system and start over. But some of us can. Additional Information : Idealized Design, Systems Thinking, and a Model for Outlier Innovation  (video) Idealized Design: How Bell Labs Imagined — and Created — the Telephone System of the Future  (narrati...

In the United States, the Single Audit is an annual standard audit that any entity that receives over $750,000 in federal funds, federal grants, or federal awards for its operations must comply with. The single audit was established by an act of congress, the Single Audit Act of 1984 .  The objective of this single audit is to make sure taxpayer money provided to states, cities, universities, not-for-profit organizations, Indian Tribes, and others which receive federal assistance is properly spent. These single audits are typically performed by an independent certified public accountant (CPA). Each single audit report, which is a financial statement, is submitted to the Federal Audit Clearinghouse along with information which supports the single audit report. When I was with Price Waterhouse as an auditor I performed single audits.  Each year the U.S. Federal Government provides around $400 billion to these non-federal agencies. It seems like the funding level to require an ...

In 2009, the U.S. Securities and Exchange Commission (SEC) began accepting XBRL-based reports in their EDGAR system .  Around that same time I started fiddling around trying to extract information from those XBRL-based reports. It was a lot harder than I had anticipated. To make a much longer story short, I realized that, because different reporting economic entities reported using different reporting styles, I needed additional metadata in order to effectively extract information from those reports.  To simplify the extraction, I chose to focus on trying to extract report information from one explicit and common reporting style . About 1,600 public companies used that same specific reporting style I figured out over time.  I found a lot of mistakes in my extraction.  I found a fair amount of mistakes in the information I extracted from those reports and I figured I was making some sort of mistake. After checking, it turns out that while I did have some mistakes; the...

Per the ideas of " explore, experiment, explore " and the " lighthouse project showing the way "; here is a little project I am doing. US GAAP and IFRS are two separate financial reporting schemes that have published XBRL taxonomies. The U.S. Securities and Exchange Commission accepts financial filings from operating companies that report in both US GAAP and IFRS. ( See the XBRL taxonomies here )   Both US GAAP and IFRS follow the double entry bookkeeping mathematical model and the accounting equation .  Each financial reporting scheme defines a set of high-level financial concepts that ties to some version of the accounting equation. US GAAP defines 10 such high level concepts and IFRS defines 8 such concepts in their conceptual frameworks.  You can map between the US GAAP and IFRS financial reporting schemes via those 10/8 concepts thus ( here is a prototype of that on Kumu ).  VERY IMPORTANT NOTE! While the names of concepts like "assets", "lia...

The purpose of this article is to explain "model based reporting" and highlight some of the significant benefits of this new approach to creating financial reports as contrast to traditional approaches to financial reporting.  An example of this is, say, the financial statement section of the Microsoft 10-K submitted to the Securities and Exchange Commission (SEC) and made available to the public in the SEC's EDGAR ( Electronic Data, Gathering, Analysis and Retrieval ) system for fiscal year 2017. ( here is that actual submission for 2017 ) (As a brief side note; the SEC's EDGAR system was made available around December 1993.  Public companies began submitting their financial information to the SEC as a result of the 1933 and 1934 acts.  Specifically, the 1934 act required public companies to submit periodic financial information quarterly and annually.  This was before the copier, the word processor, the internet, or the computer. People accessed paper-based reports...

Intelligence and consciousness are distinct ideas.  The definitions of both are debated today and have been debated for hundreds of years.  There is a difference between "human intelligence" and "machine intelligence".  Humans and machines are different. To understand some of the differences, have a read of Understanding vs Interpretation . When it comes to a machine, this is my definition of intelligence:  Intelligence is the ability to perceive or infer information and reason with respect to that information using a known logic and known reasoning approaches and to retain that information as knowledge to be applied towards achieving specified goals and objectives within a specified environment or context (a.k.a. formal defined system with specified and known boundaries agreed to by a known set of stakeholders). Consciousness involves self awareness, awareness of one's surroundings, the ability to have a subjective experience, experience feelings, and have ot...

TerminusDB has created Git for data .  DFRNT and Twinfox is creating "Git for information" and "Git for reporting". XBRL , the Standard Business Report Model ( SBRM ) and the Seattle Method will be used to make this happen. Think Git for professional knowledge graphs . Let me explain. Git  is a distributed version control system that tracks versions of files. Git is commonly used to control source code by programmers who are developing software collaboratively.  GitHub is a proprietary platform that allows developers to create, store, manage, and share their code using Git. While Git is not an official global standard sanctioned by a formal standards organization; its popularity and widespread use have made Git the "de facto standard for version control". The "lack of fear of change" is perhaps one of the greatest innovations that revision control has given us for software code. What if you could achieve that same "lack of fear of change...

There are few who are further out into the frontier of  XBRL-based digital financial reporting than I am.  Maybe some are that I am not aware of.  And I am not talking about "bolt on" reporting to regulators that mandate the use of XBRL-based financial reports. What I am talking about is XBRL-based digital financial reporting that accountants want to use because it is better, faster, and cheaper than other approaches. We are not there yet, but we are getting closer. The way you learn truly useful information is to explore, experiment, and evolve. On Wikipedia, in the article Financial Statement ; there is an image of a financial statement of Wachovia National Bank from January 29th, 1906. As a basic example of an XBRL-based digital financial statement, I represented that report using XBRL: I used Pacioli.ai's Luca Suite to create this working prototype example of an XBRL-based digital financial report.  Here are all the technical artifacts: Basic report viewer provi...

An association refers to a relationship or connection between different pieces of information or concepts, things . An association is a fundamental building block of knowledge . Associations all tend to fall into one of the following categories defined below, a specialization of one of these general categories of associations: Association between primitive things or complex things (a.k.a. assemblies of privative things) Categorization association (is-a, type-subtype, wider-narrower, class-subclass) Compositional association (has-a, part-of, whole-part) Aggregational association (summation, mathematical) Navigational association (parent-child) Simile (things that possess similar qualities but are not the same) Equivalence  (one thing is EXACTLY the same as another thing) Property (thing possesses some quality or trait) The following screen shot shows associations represented in the form of a knowledge graph. ( Click here for a larger view ) Additional Information: Theory of Ty...

A reasoner (a.k.a. semantic reasoner , reasoning engine, rules engine, business rules engine , solver) is a special type of software application that is build to infer logical consequences from a set of asserted facts or axioms or rules. To understand what a reasoner is, it helps to understand the difference between imperative programming   and declarative programming . You can understand the difference between imperative and declarative by, say, thinking of how a self driving car might work.  There are perhaps two approaches to giving instructions to a self driving car to, say, get to the airport: Using an imperative approach you're telling the car "Turn right at the next light, then go straight for two miles, then turn left..." You're giving step-by-step instructions, the algorithm , to get from where you are to the airport. Using a declarative approach you're telling the car "Take me to the airport." The car figures out the best route, handles the t...

This blog post is brainstorming the notion of "information packaging" and tries to help technical people understand the underlying business intent when it comes to the notion of what I refer to as a "block". How is information formally packaged within a block or information block. First, as I understand it; there are a number of different ways that information can be provided.  The following is a summary, a spectrum, of those approaches information can be provided and please note that the focus is on providing information , not data.: Fact : Individual piece of information. A fact is one piece of information. List : A list is a set of discrete items of information collected and set forth in some format for utility, entertainment, or other purposes. Table : A table  is an arrangement of information or data, typically in rows and columns, or possibly in a more complex structure. Note that there are two views of tables.  One view is that a table can NOT BE NESTED wit...

An algorithm is a set of steps or instructions or procedures or tasks for solving a problem or accomplishing some goal or objective. A set of steps in an algorithm has a sequence that follows some sort of logical order. Algorithms are good for explaining, understanding, directing, managing.  By breaking down a much larger problem down into smaller, manageable steps you can better understand the problem and create an easier to understand systematic approach to solving that problem or achieving that goal or objective. An algorithm can be implemented in two different ways: (a) write software code called imperative programming, (b) write declarative rules and use a rules engine (a.k.a. reasoner, semantic reasoner , reasoning engine, business rules engine) to process the declarative rules. Understanding the difference between imperative and declarative is important.  You can understand the difference between imperative and declarative by, say, thinking of how a self driving car m...