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Distinguishing Between Properly and Improperly Functioning Logical Systems

(If you don't understand what I mean by logical system please watch this video playlist.)

Here is some really good information related to distinguishing between properly functioning and improperly functioning logical systems, such as an XBRL-based financial report.  It also helps you understand what it takes to keep such a logical system properly functioning and how to convert an improperly functioning system back into a properly functioning logical system: 

This is what a properly functioning system looks like:

PROPERHere is a human-readable review tool that shows the details of a properly functioning logical system. Notice that all the statements made within the system are consistent, complete, and precise.

IMPROPERHere is a human-readable review tool that shows the details of an IMPROPERLY FUNCTIONING logical system.  Notice that the software makes you aware of the inconsistency in the statements.

IMPROPER: Here is a human-readable review tool that shows the details of an IMPROPERLY FUNCTIONING logical system.  Notice that the software DOES NOT MAKE YOU AWARE!!! of the inconsistency.  Why?  The rule "Assets = Liabilities + Equity" was removed.

That is why business rules are critical to the process of creating high-quality XBRL-based financial reports.

Posted on Monday, March 9, 2020 at 11:01AM by Registered CommenterCharlie in | CommentsPost a Comment

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