XBRL-based Digital Financial Reporting

There is more and more of a call for some sort of  universal semantic backbone .  See the articles under the "Additional Information" section. So, what exactly is a "universal semantic backbone"?  A universal semantic backbone is a framework for effective digital interoperability.  It serves as a basis for interoperability, semantic consistency, and trusted collaboration.  It forces semantic rigor. A universal semantic backbone is an important pillar of the successful transformation to digital. It helps alignment of semantics within and across industries. It provides things like consistent business terminology and business rules within and across areas of knowledge and systems of interest.  It helps manage intersubjectivity  in order to achieve mutual cognitive understanding.  It is a foundation upon which other things are built. It is infrastructure that makes things work effectively and predictably. It is the conscious use of proven best practi...

A model is an informative, intentional, well-defined, clear, complete, and correct representation of the set of things and relations between those things defined within an axiomatic system . A model enables a community of stakeholders trying to achieve a specific goal or objective or a range of goals/objectives to agree on important details related to capturing meaning or representing a shared understanding of and knowledge in some system of interest. In her book An Introduction to Ontology Engineering (PDF page 23), C. Maria Keet, PhD, provides discussion about what constitutes a good and perhaps a not-so-good ontology.  There are three categories of errors she discusses and these three ideas are applicable to models: Syntax errors : If the expression of the model is of some specific machine-readable language, having a syntax error is similar to computer code not being able to compile. Logic errors : If the expression of the model has an error in logic then the model does not r...

Declarative rules have many of the same characteristics of software code.  One similar characteristic is that you can create a declarative rule once; then that rule can be used many times by many different people similar to software. The term “canonical” as I am using the term means “conforming to well-established good/best practices and officially accepted principle, patterns or rules".  A canonical example is something that is "according to the cannon" or the "preferred notation for some object".  An "archetype" or the original model from which something is developed or made. Think "template". These templates are pre-verified.  Or maybe the term " jig " makes more sense to you.  Basically, think tools that are used to control something. Let's face it, the average accountant is, well, "average".  This is typical of pretty much every profession; skill level follows a bell shaped curve.   For example, think of pizza.  ...

Jessica Talisman's excellent article, The Ontology Pipeline , makes two very important points that I see. First, I have historically and incorrectly seen what Talisman more precisely sees as a dynamic "pipeline" as more of a static "spectrum".  For example, the first two graphics on this page  I had always looked at the graphic as an "either/or" choice that had been made once.  You either build a "controlled vocabulary" or a "thesaurus" or a "taxonomy" or an "ontology" or a "theory". But what Talisman seems to be saying is that this is not a one time choice, this is more of an "evolution" from one point to another point within that spectrum tools.  The tools are not "alternatives", they are "steps". The second important thing that Talisman is pointing out is that the domain of library science which has been working with these sorts of things for 10+ years offers proven, rep...

An axiomatic system is a formal framework specified in a language (such as first-order logic) which sets out a set of axioms and inference rules that specifies an axiomatic theory.  An axiomatic theory is a body of knowledge (a.k.a. domain of understanding, area of knowledge, universe of discourse).  An axiomatic theory provides the groundwork for deductive reasoning. A  statement  (a.k.a. proposition, claim, assertion, belief, idea, fact) is a  declarative sentence  (e.g. not a question, not a command, not an exclamation).   An axiom (a.k.a. postulate, assumption) is a self-evident or commonly agreed upon statement that is taken to be true.  An axiom is excepted, it cannot be proven. But no exceptions or counter examples are known to have been found for the accepted axiom.  An axiom is fundamentally accepted as being true per the axiomatic system. A theorem (a.k.a. proposition, deduction) is a declarative statement that has been prov...

In my blog post, Big Idea for 2025: Semantic Accounting and Audit Working Papers , I mentioned the idea of what amounts to modern accounting and audit tools. This is a part of the " fundamental reorientation of the state of affairs " for and the " new physics " of accountancy. To help me think about this idea, communicate this idea to other accountants, but more importantly to help move the OMG's Standard Business Report Model (SBRM) and XBRL International's update to the Open Information Model (OIM) in the appropriate direction; I have created an updated semi-working prototype of such semantic accounting and audit working papers . The easiest way to see the very basics of what is going on is to use this basic viewer . The following is a summary of the significant additions for this iteration: Putting representations for the transaction level , the mezzanine level , and the financial statement together in one "document". Built out an increased a...

It is time to rethink the design of financial statements. Clay tablets worked well and they had a good run which ended many years ago when the clay tablets were replaced by papyrus and then ultimately paper.  Paper had a good run also but paper financial statements were ultimately replaced by what amounted to an electronic version of that paper; PDF, HTML, and such. We can do better.  Today's demands call for more modern accounting tools . Idealized design  (a.k.a. greenfield project ) is the notion of designing a system without imposing constraints of prior work.  This technique may, or may not, work for rethinking the financial statement. Here are a number of ideas that I would throw at the wall if I were in charge of rethinking the financial statement to make such tools modern: Digital first : The first thing that I would do is abandon the legacy notion of paper and the document and embrace what a financial statement really is; a database or knowledge graph. A fin...