XBRL-based structured digital financial reporting - Blog: Digital Financial Reporting (using XBRL)

"Knowledge as a service" is the vision of Epistematica. Great vision.

This company is also the first use of the term "semantic financial reporting" that I have heard. Semantic financial reporting is far better than the term I use which is "digital financial reporting".

I believe we are both talking about the same thing: guidance-based, model-oriented, semantic structured authoring of financial reports.

The reports are not created using tools which know nothing of financial reports or financial reporting such as Microsoft Word or Microsoft Excel. Semantic financial reports are created using "smart applications" which do understand financial reporting. That may seem odd, but that is precisely what the semantic web is all about.

Software understanding the semantics of some domain is not voodoo or magic. It is all about metadata. Ontologies, like the financial report ontology, which express key "things" and important relations between those things which make up a financial report literally guide a user of that software to achieving some desired goal such as creating a financial report.

Ontologies express knowledge in the form of metadata which a software application can understand and use. To see this you need both the software that understands the metadata and the metadata itself.

I predict that we will see the metadata and software which can understand and use this metadata for financial reporting within a year. Disclosure management software is a big step in this direction. Then accountants will get what XBRL is really all about.

Knowledge is part of a spectrum or hierarchy: (I synthesized these definitions from many other definitions)

Data is the most basic level; discrete facts or observations, but unorganized and unprocessed and therefore has no real meaning or value because it has no context; for example, "10,000" is data.
Information adds context; information is data in context, it has meaning; for example, "Sales for ABC Company for 2012 is $10,000 is information.
Knowledge adds how to use it; knowledge is a framework for evaluating and interpreting information which makes use of experience, values, expert insight, intuition with the goal of evaluating and incorporating new experiences and information; for example, the sales for every public company organized in useful ways is knowledge.
Wisdom adds when to use knowledge; wisdom relates to knowing why and doing something useful; wisdom = knowledge + experience; for example, exercising judgment to sell your shares of some stock because the sales relative to the sales of other public companies and relative to other numbers on a financial statement is wisdom.

The end game is now knowledge, it is wisdom. Data, information, and knowledge are building blocks. But it takes experience to to know what to do with that knowledge to have wisdom.

That is what I think. What do you think?