Understanding that XBRL is a Knowledge Media
Monday, January 16, 2017 at 02:45PM
Charlie in Becoming an XBRL Master Craftsman

Most people think about XBRL in terms of what it is.  Using that definition, XBRL is a global technical syntax for exchanging information.  Another way of looking at XBRL is in terms of the value it provides. Using that definition, XBRL imparts knowledge.  XBRL is a new medium.  XBRL is a high-fidelity knowledge media.

In his book, Systematic Introduction to Expert Systems, Frank Puppe discusses the notion of knowledge media. This figure, a modified version inspired by Frank Puppe's Figure 3.2, shows some knowledge media in order to contrast some specific advantages and disadvantages of the different media.  This will help you see the value of the XBRL knowledge media:

Inspired by Frank Puppe's Figure 3.2, page 21.

The graphic shows a knowledge bearer on the left which imparts some knowledge to a knowledge receiver on the right via some knowledge media.  Just a few knowledge media are shown.  Here is a summary of some of the advantages and disadvantages of the list of knowledge media which are shown in the graphic above:

However, in order to make use of a knowledge media effectively, the following three conditions must be satisfied:

  1. Easy for knowledge bearer to represent information: The effort and difficulty required for the knowledge bearer to successfully formulate the knowledge in the medium must be as low as possible.
  2. Clear, consistent meaning: The meaning conveyed by the knowledge bearer to the knowledge receiver must be clear and easily followed by human beings and be consistent between different software applications. The result cannot be a "black box" or a guessing game and users of the information should not be able to derive different knowledge simply by using a different software application.
  3. High-quality information representation: The form in which the knowledge is represented to the receiver must be as good as possible.  The quality must be high whether the knowledge receiver is a human-being or an automated machine-based process.  Sigma level 6 is a good benchmark, 99.99966% accuracy.

The knowledge conveyed by a zero defect intelligent XBRL-based digital financial report as to the financial condition and financial position of an economic entity is just an example of the capabilities of the XBRL knowledge media.  Digital business reports of other sorts are possible also.  Think semantic spreadsheets.  See here and here.

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