« FINREP Taxonomy Provides Insight Into Use of Hypercubes | Main | Imagine a Digital Financial Report Viewer which Works like iTunes »

Benefits of Semantic, Structured Authoring; No Need To Even Exchange XBRL

The benefits of semantic, structured authoringover the unstructured approach to creating financial statements (i.e. packing information into Microsoft Word which understands nothing about financial reporting) seem quite obvious and clear to me. It seems that even if you created your financial statement using this semantic, structured approach leveraging XBRL and never gave XBRL output to anyone, it would still be worth considering a semantic, structured authoring approach.

This may seem like a rather odd statement, but hear me out.

Structured authoring of documents has been around for quite a long time.  I visited the company called Arbortext back in 1998 when SGMLwas the structured text of choice. SGML offered many benefits, but it was hard to use.  A few years later I visited a company called SoftQuad Software in Vancouver, BC (just up the street from me) who had a product called XMetaL.

(A quick history; XMetal was purchased by Corel, then Corel sold it to Blast Radius, and then Blast Radius sold it to JustSystems)

XMetaL was am XML editing tool with an interface which was much like a word processor.  It was a business user tool, rather than an XML tool for developers like most other XML editors. The useful thing which XMetaL did was control what you could enter using a schema.  The bad thing was that the schema was more syntax related than semantics related. XMetaL got into XBRL but I never did see XMetaL allow a business user "interact" with a financial statement the way I thought that the interaction could be like.

There are others taking a structured authoring approach to creating financial statements. SAP, Oracle, and IBM to name three. All of these companies are working to change the "last mile of finance" as are others. Many of these companies started down this path long before XBRL even existed.

There are lots of different terms for structured authoring: model based reporting, digital financial reporting, 21st Century financial reporting.

But let me take a step back and say that there is an even better approach that structured authoring. This approach is called semantic, structured authoring and is defined as:

Semantic, Structured Authoring

"to compose information content semantically structured according to some ontology"

THAT is what I'm talking about.

The paper Semantic Authoring and Learning Thereofby Kôiti Hasida talks about semantic structured authoring in more detail. It points out how this approach can be more productive and improve quality using things such as (most of which I don't really understand):

  • discourse connectives
  • reusable patterns of discourse structures
  • lexicographical and lexical knowledge
  • frequent combinations of argument types of discourse relations
  • ontologies containing concepts appearing in graphs
  • credibility and importance of parts of graphs
  • who may be interested in parts of graphs

It seems like semantic structured authoring is a marriage between ideas of structured authoring and ideas of the semantic web. Add to this business intelligence, then you see financial reporting done in a totally new way.

The way I see it is that taking a model-based approach to constructing financial statements will be as different as using a paper spreadsheet as contrast to building an electronic spreadsheet. The best visualization I can provide is a video of the Quantrix Modeler (the first video on this page, 6 minutes that will change your view of the world).

Posted on Wednesday, June 29, 2011 at 07:02AM by Registered CommenterCharlie in | Comments2 Comments

PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments (2)

You're insane, man! What would this kind of transparency do to the industries which rest upon layers of fraud, graft, and kick backs ;-)

Seriously, good post. Do you know Ontolog Forum - an open, international, virtual community of practice devoted to advancing the field of ontology, ontological engineering and semantic technology, and advocating their adoption into mainstream applications and international standards. http://ontolog.cim3.net/cgi-bin/wiki.pl/
June 29, 2011 | Unregistered CommenterEd Dodds
Great article. At its core, the purpose of accounting is to provide information and thus, it only make sense to have a machine-readable structure to the information.

Video on similar topic:
May 24, 2012 | Unregistered CommenterBen Jones

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
All HTML will be escaped. Hyperlinks will be created for URLs automatically.