Digital Financial Reporting

Punctuated equilibrium provides a clues as to how XBRL-based digital financial reporting will unfold.

Punctuated equilibrium predicts that a lot of evolutionary change takes place in short periods of time tied to speciation events.  According to punctuated equilibrium, evolution occurs in short bursts. Species go through long periods of stability the rest of the time.

Basically, everything has to be in place for a change to occur.  It takes time to put all the pieces in place that will enable the change TO occur.

Does XBRL-based financial reporting have all the necessary pieces put together yet?

Machine-readable rules are hard to understand without a rules engine to process the rules.  If a rules engine does exist but you have no rules to process, it is hard to understand the value of the rules engine.  If no one cares if the machine-readable facts in a report are correct; then it is hard to understand the value of machine-readable rules and a rules engine which can process the rules.

But, what if: 

• Machine readable rules exist.
• A rules engine exists. (i.e. Pesseract; Pacioli; XBRL Cloud) 
• Machine-readable reports which contain reported facts exist.
• The machine-readable reports are REQUIRED to be audited to be sure that the information contained in the report are properly stated and machine-readable by financial analysts?

Well, there are still a few things missing.  First, you need WAY more rules than the fundamental set that I provide.  Second, to create those rules you need software.  Third, to create the reports you need easy enough to use report creation software.