BLOG:  Digital Financial Reporting

This is a blog for information relating to digital financial reporting.  This is my brain storming platform.  This is where I think out loud (i.e. publicly) about digital financial reporting. It is for innovators and early adopters who are ushering in a new era of digital financial reporting.

Much of the information contained in this blog is synthasized, summarized, condensed, better organized and articulated in my book XBRL for Dummies and in the chapters of Intelligent XBRL-based Digital Financial Reporting. If you have any questions, feel free to contact me.

SEC published draft Strategic Plan for 2018-2022

The Securities and Exchange Commission have published a draft strategic plan for 2018 to 2022.  The strategic plan summarizes the SEC's mission, vision, values, and goals.

Posted on Thursday, June 21, 2018 at 07:39AM by Registered CommenterCharlie in | CommentsPost a Comment | EmailEmail | PrintPrint

Understanding Reporting Styles

I used to call them "reporting frames" or "reporting pallets".  Now I call them "reporting styles".  If you want to understand reporting styles, read this document.

I built the US GAAP reporting styles first.  Now I am creating IFRS reporting styles.  Here are both sets:

One thing that I want to revise is the coding scheme that I use.  The coding scheme that I have now for US GAAP just evolved as I methodically created the reposting styles.  Now that I see all the moving parts, in retrospect I wish I would have done a few things differently.  I am going to make those changes for IFRS.  I have not done so yet, but I am going to go back and revise the coding scheme.

Another thing that I am recognizing is that these fundamental accounting concept relationships and the reporting styles are not only useful for validating XBRL-based reports to make sure they are created correctly; the machine-readable metadata is also useful for extracting information from the filings AND for doing comparisons between IFRS and US GAAP reports.

Here are the mappings for one reporting style for US GAAP. And here are mappings for that same reporting style for IFRS.  The IFRS and US GAAP concepts are different; but the FAC (fundamental accounting concepts) are the same.  Unfortunately, I used different schemas and different namespaces for IFRS and US GAAP.  I will fix that.

So, here are the impute rules and consistency cross check rules: IFRS | US GAAP.  Those rules are essentially the same.  There are a couple of differences because IFRS does not use "commitments and contingencies" and "temporary equity" as US GAAP does.  (Note that extraordinary items was dropped from US GAAP, so that needs to be removed from my FAC concepts and rules.)

Basically, I believe that I can create one set of impute/consistency rules that will work for US GAAP and IFRS for some reporting styles.  For others, probably not.  Time will tell.

Also, note that the versions above use the OLD SYNTAX of articulating the impute and consistency cross check rules.  Note that the rules are basically a controlled natural language with information stored in a text file.

The NEW SYNTAX is 100% pure XBRL. Here is the new style for both US GAAP and IFRS:

  • US GAAP (Currently supports the most used 67 of the approximately 99 reporting styles that exist in the old syntax.)
  • IFRS (Currently supports only ONE reporting style for the new syntax; that was created to test the new syntax and make sure I was creating these correctly in our software.)

If this is a bit confusing, sorry.  I am figuring this stuff out as I create it.  That is how it works being on the leading edge.  Sometimes you have to backtrack because you went the wrong way.

Posted on Tuesday, June 12, 2018 at 07:38AM by Registered CommenterCharlie in | CommentsPost a Comment | EmailEmail | PrintPrint

Future ESMA Filers Currently Filing with SEC

So this is a work in progress, but I am posting where I am thus far.

As it has been explained to me, there are 88 companies that submit form 20-F filings to the SEC using the XBRL format that will ultimately be submitting the same information or very similar information to the ESMA. Of that 88, 86 use IFRS and 2 use US GAAP (I believe, still tuning this).

Of that 88, there are 56 that I have reliable rules for and the companies pass 100% of my fundamental accounting concept relations continuity cross checks.

To verify those 88 filings, and the full set of about 250 IFRS filings, I have created as set of reporting styles and the related machine-readable rules to automatically verify that the reports are following those reporting styles.  NOTE!!! The IMPUTE and CONSISTENCY rules are in an OLDER FORMAT that is not XBRL currently. I am doing this becuase XBRL Cloud uses the OLDER FORMAT and I am using XBRL Cloud to help me create these rules.  But, I do have the NEW 100% pure XBRL Format.  I will convert all the IFRS fundamental accounting concept relations continuity cross checks to the pure XBRL format.

Ultimatly, I will have all the same sorts of rules for US GAAP and IFRS that are covered in this document.  If you don't understand why I am going through all this trouble, then read the Computer Empathy document.

This blog post will help you understand where I am going. Particularly this for IFRS and this for US GAAP. This video walks you through what you can do with that information.  But don't think just human-readable.  Think human-readable AND machine-readable.  And XBRL will be used to link everything together.

This extraction tool grabs information from the 88 companies financial reports.  The tool is not working 100% correctly yet.  I still need to figure out the business rules to extract information from the filings. 

But ask yourself a question; or ask the ESMA: How do you know the whole extracting information from XBRL-based reports actually works?  What proof do you have?  That seems like a reasonable question given that companies spend a lot of time representing information in the XBRL format.  If this is not achievable for these 88 XBRL-based financial reports, then why would you think it would be achievable from the full set of companies that will be required to report to the ESMA using XBRL?

Posted on Monday, June 11, 2018 at 11:02AM by Registered CommenterCharlie | CommentsPost a Comment | EmailEmail | PrintPrint

Financial Reporting Metadata

I am taking another stab at reorganizing some things to make them more logical and simpler.  This is a work in progress, but I am using this page, Financial Reporting Metadata, to get organized.  I am concerning myself with both US GAAP financial reporting, IFRS financial reporting, and general business reporting as a way to get things properly organized.

People have a tendency to make this stuff harder than it really needs to be.  Here are some things that drive me crazy:

  1. Nonstandard document formats: Some regulators only publish taxonomies and reports in ZIP files.  That is fine for providing supplemental copies of things, but use standard XBRL which can be directly read into any XBRL processor without having to jump through extra hoops such as unzipping the ZIP file.  The US SEC does an excellent job of making things directly readable.  There are some issues with automatic redirection of "http" to "https". Some software does not read taxonomy files correctly as a result.
  2. Nonstandard documentation: Provide as much documentation as possible in standard XBRL.  The use of XBRL label linkbases for providing commentary and XBRL reference linkbases for referencing to external resources and even examples is good.  Publishing things in PDF, Excel, Word, and other formats that are (a) nonstandard and (b) not linked to other related and relevant information is not good.
  3. Unnecessary variability: Engineer and statistician W. Edwards Deming defined quality as "predictability," and called variance "the enemy of quality." Different regulators doing things differently for no logical reason makes little sense, causes confusion, makes things more complicated unnecessarily, and really is sloppy and shows someone is not doing their homework.
  4. Insuffecient metadata: It blows my mind that public companies cannot even create XBRL-based financial reports and they still cannot get the high-level accounting concepts correct.  I have been measuring these reports for going on seven years.  Business rules prevent anarchy.

 

Posted on Friday, June 8, 2018 at 01:51PM by Registered CommenterCharlie | CommentsPost a Comment | EmailEmail | PrintPrint

Commentary and References Demonstration

XBRL has some interesting and very useful features...which few people seem to know about or use.  One of those features is the ability to add commentary and examples using the XBRL label linkbase or the XBRL references linkbase.

I created some demo commentary linkbases for US GAAP and IFRS a while back.

The following commentary linkbases and references linkbases build on those examples:

So what exactly is going on?  Essentially, what I am showing is that if software vendors create their software correctly, you can pull resources directly into their software and expose those resources to users without the software vendors having to write a single line of code.

I will provide more information and maybe a video later on this topic.

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