Specific Deficiencies in Capabilities of Existing XBRL Formula Processors
Thursday, September 22, 2016 at 11:26AM
Charlie in Becoming an XBRL Master Craftsman

Current XBRL Formulaprocessors don't meet the needs of XBRL-based financial reporting.  All of the XBRL-based business rules and other metadata that I have created (i.e. fundamental accounting concept relations, disclosure validation, model structure validation) to support the creation and validation of XBRL-based financial reports of the style that are submitted by public companies to the SEC shows that the currently available commercial XBRL Formula processors (which sit on top of XBRL processors and XBRL Dimensions processors) have specific deficiencies.

To overcome these deficiencies, the following capabilities should be be provided:

  1. Support normal stuff that high-quality XBRL Formula processors support (i.e. Arelle, UBmatrix/RR Donnelley, Fujitsu, Reporting Standards, etc.)
  2. Support inference (i.e. deriving new facts from existing facts using logic)
  3. Improved support structural relations (i.e. XBRL Taxonomy functions; this was consciously left out of the XBRL Formula specification in order to focus on XBRL instance functionality)
  4. Support for chaining, specifically forward chaining and possibly also backward chaining in the future (i.e. chaining was also proposed but was left out of the XBRL Formula specification)
  5. Support a maximum amount of Rulelog semantics logic which is a set of logic that is highly expressive and safely implementable in software and is consistent with ISO/IEC Common Logicand OMG Semantics of Business Vocabulary and Business Rules
  6. Additional XBRL definition arcroles that are necessary to articulate the Rulelog logic, preferably these XBRL definition relation arcroles would end up in the XBRL International Link Role Registry and be supported consistently by all XBRL Formula processors (for example these and these)

If you try and reconcile the pieces of XBRL with the components of an expert system, you can clearly see the specific deficiencies in the capabilities XBRL Formula processors (i.e. the above list):

This functionally is NECESSARY (i.e. see the Law of Conservation of Complexity) to enable professional accountants to properly work with XBRL-based structured financial reports.  The margin for error is ZERO. If you don't understand this, I would encourage you to read the Framework for Understanding Digital Financial Report Mechanics.

There are exactly two ways to achieve this functionality:

  1. Improve the capabilities of XBRL Formula processors as indicated above.
  2. Enhance existing business rules engines to support XBRL.

So that is WHAT needs to be done.  I am less clear on HOW to best achieve this.

Article originally appeared on Intelligent XBRL-based structured digital financial reporting using US GAAP and IFRS (http://xbrl.squarespace.com/).
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