Digital Financial Reporting

I mentioned the notion of templates and exemplars.  I tried to explain the power of disclosures and showed how disclosures were related to templates and exemplers. I tied disclosures, templates, and exemplars into a bunch of other ideas and provided machine-readable metadata.

I mentioned that there was one more important piece of the puzzle, the notion of the Block.  Blocks are part of the "glue" that makes a lot of interesting functionallity work.

In the document Understanding Block Semantics I provide details of what Blocks are, how they work, and what they do.

If you are really trying to figure this stuff out, be aware of this page of my blog toward the bottom in the section "Information Specifically for Software Engineers".  I know that there is some redundancy and I know the set of information is not yet complete.  But I am getting there little by little.

The Forbes article by Barnet Sherman, The Four Letters Transforming The Municipal Bond Market And Government Finance, points out:

With accurate data comes extensive data functionality. There are nearly an endless number of applications for data to be used in. Software engineers can develop automated, repeatable processes so data can be analyzed, measured, ranked, benchmarked, managed, modeled, tested, shared, exchanged, outlined, mapped, sorted, templatized, searched, queried, predicted, charted, animated, mined, validated, machine-read, machine-learned, compared, reused, verified, categorized, structured, tracked, screened, referenced, stored and retrieved. Just for starters.

This is why I spend so much time and effort trying to understand why mistakes occur, figure out how to detect mistakes, figure out how to prevent mistakes, and otherwise contribute to the creatino of high-quality XBRL-based digital financial reports.

More information on state and local govenment use of XBRL can be found here:  Workiva and The Data Foundation have published another report, Transparent State and Local Financial Reporting: The Case for an Open Data CAFR, per the authors "outlines the steps necessary to create an infrastructure for open data CAFRs, anticipates challenges to open data adoption, and examines the impact currently-pending federal reforms could have on the process."

As I understand it there are about 90,000 state and local governmental entities in the United States.  Those entities tend to use governmental accounting standards provided by the GASB to create their financial reports.

If software engineers could get their act together in terms of ease of use and quality; then XBRL-based digital financial reporting could take off.  Until they do, it simply will not happen.  It should not because low quality information is useless. Metacrap is of no use to anyone.

Software vendors seem to be very short sighted.  Do you recognize that the market for creating financial reports is 25 million in the US alone?  XBRL-based reporting of public companies to the SEC is table scraps.

Metacrap is a derogatory term for metadata.  In his 2001 influential essay Metacrap: Putting the torch to seven straw-men of the meta-utopia, Cory Doctorow, a blogger and digital rights activist, pointed out a world of "exhaustive, reliable" metadata would be wonderful, but such a world was "a pipe-dream, founded on self-delusion, nerd hubris, and hysterically inflated market opportunities."

The utopia of the semantic web has not yet materialized.  Whatever Happened to the Semantic Web? 

So, what is the problem?  First, just as I mention in Computer Empathy that there are TWO categories of artificial intelligence, "generalized" and "specialized" (see page 21/22); there are likewise TWO categories of semantic web; "generalized" and "specialized".  Yes, same deal.

Having a generalized semantic web where everything universally works with everything else will not happen for many years, if it happens at all.

However, a specialized semantic web, say for financial reporting, is significantly easier to create. 

The biggest problem in creating a semantic web is overcoming the "metacrap".  Cory Doctrow offers this list of obstacles to realizing utopia:

1. People lie.
2. People are lazy.
3. People are stupid.
4. Mission: Impossible - know thyself. (i.e. people are lousy observers of their own behavior)
5. Schema aren't neutral.
6. Metrics influence results.
7. There's more than one way to describe something.

So, what if you could overcome these obstacles?  Not overcome it generally, but in a specialize system such as financial reporting?

If you want to see that happened, be sure to stay tuned.

There seems to be a debate over the use of XML or JSON.  The debate is misguided in my view.  Read Stop Comparing JSON and XML. This article, The Rise and Rise of JSON helps you understand why developers like JSON.  Software engineers can worry about syntax; use whatever syntax you might desire.  It is trivial to convert the XBRL syntax to JSON.  What is hard is figuring out the semantics.  OpenGraph, JSON-LD; it does not matter to me.  All of this level will be hidden from business professionals.

Using XML for Data; Why the RDF Model is Different than XML Model;

I showed a prototype/mockup application GUI interface in a blog post and in another blog post and I showed the metadata that would make that application work.

In this blog post I will show you a WORKING software application and give you the source code to that application so you can SEE how it works.

To get the application to run you MUST be able to run Microsoft.Net (i.e. Windows, this will not work on a Mac).

If you cannot get the application to run, the next best thing is to watch this video which shows what this working proof of concept does.

So what if this ideas of using templates and exemplars for creating financial reports is a good one and actually works out?  What does that mean?

Think about that.

NOTE that there is some sort of memory issue that I cannot figure out that causes the US GAAP topics and disclosures to crash.  To work around that, either (a) use the US GAAP reporting scheme first or (b) if you get the bug close the application, then reopen it and do US GAAP first.