Representing a Financial Reporting Framework Using XBRL

A financial reporting framework is basically the rulebook a company must follow when it prepares its financial statements. A financial reporting framework tells a reporting economic entity things like what they need to report, how to measure the things they report, how to present that information so that others can understand the information, explains the standard "jargon" used, and how to structure what is reported so that users of the information understand how to use that information.

There are many different financial reporting frameworks, two of the most well known and widely used are US GAAP and IFRS. One thing that every financial reporting framework has in common is that they follow the double entry bookkeeping model and the accounting equation in some way, shape, or form.

Historically, financial reporting frameworks were documented in books or other documents or now document oriented web pages published from, perhaps, a document oriented content management system.  But, I predict, that is going to change. Knowledge graphs, ontologies, theories, and other such machine interpretable forms will be the future. Reports, report models, and reporting frameworks will be model-driven based n global open industry standards.

The following is a set of "financial reporting framework" (a.k.a. financial reporting scheme) examples that help you understand model-driven digital financial report creation using the global open industry standard XBRL.

Now, the earlier examples are not really "financial reporting frameworks".  For instance, the "accounting equation" is not really a financial reporting framework.  But I created that tiny, tiny example as a financial reporting framework for practical reasons.  I wanted to create the tiniest, simplest, yet complete example for testing, experimentation, learning, and teaching purposes.

Each of these "financial reporting frameworks" were created for a very specific reason or reasons.  The point is to learn about model-driven financial reporting using the XBRL global open industry standard effectively.  That is the main driver.

Each of these financial reporting frameworks has been extensively tested using multiple off-the-shelf software applications.  These examples are ultra-high quality and each software application (i.e. Arelle open source XBRL processor, UBmatrix XPE 4.0, XBRL Cloud's Coyote reporting, Auditchain Pacioli, Auditchain Luca Suite, and Pesseract process each of these reporting frameworks, report models, and reports consistently and as expected.

Here are the example working proof of concept financial reporting frameworks in order that I would try to understand them.

  1. Accounting Equation: Very tiny; an introduction. Also introduces specific things that can go wrong when you create a model-driven report. 1 structures, 3 report model elements, 1 rule.
  2. SFAC6: Slightly larger; 3 structures, 10 report elements, 3 rules.
  3. SFAC8: Again, slightly larger; introduces the notions of "extensibility" and "reporting styles".
  4. Common Elements: Slightly larger; introduces the notion of "articulation" and expands on the idea of extensibility and reporting styles.
  5. Office of Comptroller of Currency: Consolidation of all the ideas in #1 to #4 into a real looking financial reporting framework.
  6. MINI: This financial reporting framework is still pretty basic, but it is a real looking financial reporting scheme.  This introduces the notion of "business events" and "accounting working papers" and the "closing book" and the notion of global open industry standards based, best practices based canonical accounting working papers.  This also explains the notion of the "business even code" which is missing from accounting systems.
  7. PROOF: The PROOF financial reporting framework provides 100% of the capabilities of model-driven  XBRL-based digital  financial reporting using the Standard Business Report Model (SBRM), Open Information Model (OIM), and my Seattle Method. Every logical pattern of information is represented in the same reporting  framework, report model, and report to show that everything works together effectively.  The intent with this example is to create the most complete yet also the most compact example possible that looks as much like a financial statement as possible.
  8. AASB1060: This financial reporting framework is based on a real financial reporting framework  and about 20% or maybe even up to 80% of that real financial reporting framework was represented.  All the logic present in the PROOF is also present in this financial reporting framework.
  9. IFRS for SMEs Enhanced: This financial reporting scheme is an actual financial reporting framework which was officially published but then enhanced, enriched, and otherwise augmented to make the reporting framework consistent with SBRM, OIM, and the Seattle Method.

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