Digital Financial Reporting

The following is information for a corporate financial reporting class. Learn about XBRL-based digital financial reports using the logical conceptualization of a financial report rather than technical artifacts.  Get ready for computational professional services.  Auditors need to understand how to audit information conveyed by XBRL-based reports. Quality matters.

1. Overview: Document that walks you through all of the items below step-by-step. Provides a narrative that you can follow to get the most out of this journey.
2. Logical Systems: A financial report is a logical system.  So what is a logical system?  Watch this video. BONUS POINTS: Watch this entire playlist which describes the financial report logical system.
3. Logical Conceptualization of Business Report: This explains the pieces and dynamics of a business report. BONUS: Have a look at the details of the logical conceptualization of a financial report.
4. Luca: Luca is a tool for creating XBRL-based financial reports using logical conceptualization of business report. You can download and install that tool here. (Alternatively, see the Microsoft Access database provided for each of the exercises.)
5. Pacioli: Pacioli is a tool for verifying XBRL-based financial reports per the logical conceptualization of a business report.
6. Accounting equation: (Rendering) This is about as simple as it gets; represent the accounting equation using XBRL.  Three terms, one structure, one rule, a handful of associations.  BONUS: Watch this video and this video.
7. Hello World! (Rendering) A Hello World! example is a simple example that helps you understand something.  This is a Hello World! example of one structure.
8. SFAC 6 - Elements of Financial Statements, Very Basic: (Rendering) FASB's SFAC 6 defines 10 elements of financial statements: assets, liabilities, equity, comprehensive income, investments by owners, distributions to owners, revenues, expenses, gains, losses.  Put that into an XBRL taxonomy. In this very basic example, we put those ten elements and the three structures that contain them into XBRL format.
9. SFAC 6 - Add Net Assets: (Rendering) Adding an additional structure to the SFAC 6 representation, we help you understand that different structures can be used to provide flexibility to create financial reports using different models.
10. SFAC 6 - Elements of Financial Statements, Adding Hypercubes: (Rendering) Continuing with the SFAC 6 example, we now add hypercubes to the model so that you can see what functionality they provide.  BONUS: Watch this video.
11. SFAC 6 PLUS: (Rendering) Again continuing with the SFAC 6 representation, we add more structures related to net assets, changes in net assets, and fund balance; all using hypercubes.  Helps you solidify your understand about how using different structures helps you deal with financial report variability.
12. Impediments to Properly Functioning Logical System: Financial reports need to be "true and fair" representations whether information is conveyed on paper or in electronic form.  Rewatch these three videos if you have not already watched them: Impediments 1, Impediments 2, Impediments 3. This helps you understand what can go wrong and how to avoid those things.
13. Common Elements of Financial Report: (Rendering) Builds on SFAC 6, showing the "four statement model" and how the four primary financial statements are interlinked and HOW to do this correctly using XBRL. Helps you understand articulation and how to represent these relations using XBRL correctly. BONUS: Watch this video about articulation.
14. Proof: (Rendering | Inline XBRL) This Proof takes everything you will ever run across in an XBRL-based financial report, puts all those things together and makes sure all the parts interact with each other correctly. BONUS: Watch this video. Check out the pixel perfect rendering.
15. Trial Balance: (Rendering) Starts to tie information in the accounting system with the information in a financial report.  This helps you understand the links.  BONUS: Record to report, accounting process automation.  Also, watch this video, Seeing XBRL Work.
16. Not for Profit XBRL Taxonomy and Report: (Rendering | Taxonomy) Uses proven best practices to create an untra-high quality example of a properly created XBRL taxonomy and XBRL-based digital financial reports. BONUS: Use Pesseract to view the above reports.
17. Microsoft: (Rendering) Microsoft's XBRL-based report is pretty good, but it is missing many, many rules that help verify and prove the XBRL-based report is properly functioning.  BONUS: See further analysis of the Microsoft report here where I added about 50 missing mathematical rules.  Additionally, see this analysis of other software companies including Apple, Amazon, Facebook, Google, and Salesforce.
18. Analysis: Ultimately, financial reports should be readable by automated machine-based processes.  Read this document Explore! and watch this video. BONUS: Fiddle around with the Explore! database and files.
19. Compare/Contrast: These documents provide comparisons that let the reader compare/contrast each of the different representations. Each document walks you through the build up showing that fundamentally, a financial report model is a set of structures, associations, terms, and rules.
    • Terms: Categories that terms fall into.
    • Associations: Associations express relations between terms.
    • Structures: Structures are how a financial report model is created.
    • Rules: Focus here is mathematical rules.
20. Testing software: Testing software interoperability and capabilities.
    • Pesseract
    • Pacioli
    • XBRL Cloud
    • XBRL Query

Ready to learn more?  Be sure to check out Mastering XBRL-based Digital Financial Reporting. You can also examine any report submitted to the SEC using the Edgar Dashboard.

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Other more complex examples: 

• Member aggregation of long-term debt instruments
• Tick, tie, crosscast, foot (roll ups with a member aggregation)
• State fact book

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A Matter of Principles: Future of Corporate Reporting