Creating Financial Reports Using XBRL Leveraging the Financial Report Semantics and Dynamics Theory
XBRL does not need to be the nightmare that it is today for business users and even software developers trying to implement it in support of business users. Digital business reporting which leverages XBRL will never take off and reach its potential if it is a bolt on process or outsourced service which generates structured information which few, if any, can make effective and efficient use of.
There is another way.
The Financial Report Semantics and Dynamics Theory may seem odd to an accountant. Of course a balance sheet balances, of course things need to foot, tick, and tie. These obvious semantics and dynamics never had to be documented in the past because humans did the work and they innately understand what those dynamics are and that these semantics and dynamics are true.
But computers don't understand these semantics and dynamics, software engineers don't understand many of them and in order to create software applications to serve business users, these semantics and dynamics do need to be documented. The alternative to this is exactly what you see going on today: relating to XBRL at the XBRL technical syntax level, hard to grasp terminology, different interpretations of semantics because only the syntax is agreed to, and befuddled business users wondering how it is that XBRL is supposed to benefit them in some way.
What if XBRL were approached differently, articulating those semantics and dynamics? This is what would result:
- Terminology understandable by business users
- Easier to build software
- Easier for business users
- Clear financial report level semantics
- Efficient and effective verification framework
While global agreement on the terminology and object-level semantics and dynamics would be preferable; having a global agreement is not necessary to end the nightmare. The semantics and dynamics of a financial report are agreed to. Balance sheets do balance. They also foot. Computations must be correct. XBRL-based financial reports must be true and fair representations of an entities financial report, just like their HTML or Word or PDF or ASCII version is today. While global agreement as to the semantics and dynamics might get us where we need to be sooner rather than later; we will get where we need to be.
What, do you really think that business users will tolerate the nightmare? Innovative software vendors can, and will, solve this problem and put an end to the frustrating and expensive nightmare. Rest assured.
If you want to be one of those innovative software vendors or if you are one of those frustrated business users who feel they are paying way more than need to in order to satisfy the SEC XBRL mandate, consider checking out Digital Financial Report Framework Leveraging XBRL to explore an alternative.