BLOG:  Digital Financial Reporting

This is a blog for information relating to digital financial reporting.  This is my brain storming platform.  This is where I think out loud (i.e. publicly) about digital financial reporting. It is for innovators and early adopters who are ushering in a new era of digital financial reporting.

Much of the information contained in this blog is synthasized, summarized, condensed, better organized and articulated in my book XBRL for Dummies and in the chapters of Intelligent XBRL-based Digital Financial Reporting. If you have any questions, feel free to contact me.

Deductive Spreadsheet

I have used the term semantic spreadsheet, cell store, spreadsheet hell, and have pointed out the problems of current approaches to working with spreadsheets.

I was introduced to a new term today, deductive spreadsheet or logical spreadsheet. Here is a set of slides that explain deductive spreadsheets and here is a book on the topic. Finally, here is an article from The Knowledge Engineering Review.  OK, so I found one more really good article about logical spreadsheets. This last article provides this definition of a logical spreadsheet:

A logical spreadsheet is a spreadsheet in which the formula language is composed of logical

More to come.

Posted on Monday, August 27, 2018 at 06:39PM by Registered CommenterCharlie in | CommentsPost a Comment | EmailEmail | PrintPrint

The New Physics of Financial Services

The World Economic Forum published a 167 page report, The New Physics of Financial Services – How artificial intelligence is transforming the financial ecosystem, which you can download. (This is a direct link to the report.)

Artificial intelligence is fundamentally changing the physics of financial services. It is weakening the bonds that have held together the component parts of incumbent financial institutions, opening the door to entirely new operating models and ushering in a new set of competitive dynamics that will reward institutions focused on the scale and sophistication of data much more than the scale or complexity of capital.

A clear vision of the future financial landscape will be critical to good strategic and governance decisions as financial institutions around the world face growing competitive pressure to make major strategic investments in AI and policy makers seek to navigate the challenging regulatory and social uncertainties emerging globally.

Building on the World Economic Forum’s past work on disruptive innovation in financial services, this report provides a comprehensive exploration of the impact of AI on financial services.

Wow!  That is all I can say right now.

Posted on Friday, August 24, 2018 at 08:09AM by Registered CommenterCharlie in | CommentsPost a Comment | EmailEmail | PrintPrint

Try Browser-based Scratch

Scratch, the popular software application created by MIT, provided a significant amount of inspiration for the expert system a software engineer and I built for creating financial reports.

While you could fiddle with some of the ideas of Scratch using the browser-based Blockly, also inspired by Scratch, you could not run what you create.

But now you can run what you create and do even more fiddling.  Scratch is now available as a browser-based application. Here are some videos that help you understand how to use Scratch.

Now, I speculate that most people will wonder what I am talking about and how Scratch relates to financial reporting.  But some will likely get what I am trying to point out.

No worries.  Ultimately you will be able to fiddle with real financial reports and then what I am trying to communicate will be more clear.  But, I cannot do that just now; we have a little more work to do with our application.


Posted on Monday, August 20, 2018 at 08:13AM by Registered CommenterCharlie in | CommentsPost a Comment | EmailEmail | PrintPrint

Data to Play With

Imagine that you actually wanted to make use of XBRL-based information for analysis of the financial information of companies.  What exactly would you need to do?

First, you have to perhaps go to the RSS feed the SEC provides for filings.  You have to grab the filings you want to analyze.  You have to get the information from the filings.  You have to adjust for errors in the information. Etc.

Well, here is some data to play with.  This is for a set of 15 companies, about 8 years of machine readable information, all 15 entities use exactly the same reporting style, I picked companies where there is a minimal amount of errors in the reports so there is not a lot of adjustments needed for mistakes.

Here is a test set of filings that you can use.  I provide pointers to the filings.  I have tested the information to make sure there are not many errors.  The information is for 15 banks, each of their filings, 10-Qs and 10-Ks since the SEC started using XBRL:

  1. List of reports in human readable form. (Just to visualize what is here)
  2. Same list in machine readable RSS. (Computer can work with this)
  3. Extraction/validation tool. (This shows you how to put the pieces together; however, the mappings, impute rules, and consistency checks are HARD CODED)
  4. Metadata (mapping rules, impute rules, consistency checks) for all companies. (Allows you to dynamically map, impute, and test for consistency for any of the 76 reporting styles)
    1. Schema for rules for this specific reporting style.
    2. Mapping rules.
    3. Consistency checks and impute rules. (This is by network)

Let me know what you come up with.

Posted on Thursday, August 16, 2018 at 07:52AM by Registered CommenterCharlie in | CommentsPost a Comment | EmailEmail | PrintPrint

Guide to Building an Expert System for Creating Financial Reports

In September 1998, at about 10 AM or so, I started a presentation to the AICPA High Tech Task Force related to XML-based financial reporting.  By noon that same day a plan was in place to get Barry Melancon, president of the AICPA then and today, to approve the creation of a prototype to test the idea.  That September meeting started a process of what was to become XBRL.

Almost 20 years later, I have personally achieved what it was that I wanted to achieve: creation of an expert system for creating financial reports.  That software was created by Hamed Mousavi, a software engineer, and myself.  It took us almost five years.  Most of that time related to figuring out how to do it.  I explain to software engineers and professional accountants how we did this in the document, Guide to Building an Expert System for Creating Financial Reports.

Are their better ways? It is hoped that the ideas Hamed and I are sharing in this document will start a discussion and that the collective wisdom of the institution of accountancy will correct what we may have gotten incorrect.

Most of the ideas in this document come from discussions and feedback that we received over the past 15 or so years from many, many colleagues who are too numerous to list.  In gratitude for that assistance we make this information available. That input was critical to shaping the thoughts and ideas expressed in this document. Collectively, thank you to the entire XBRL community!

Sedona, Arizona; September 1998:

(Click image for larger view)

Stay tuned to see accounting, reporting, auditing, and analysis change to better operate in a digital environment. 

Posted on Wednesday, August 15, 2018 at 09:28AM by Registered CommenterCharlie in | CommentsPost a Comment | EmailEmail | PrintPrint