Digital Financial Reporting

The US GAAP Taxonomy Architecture (and the current draft) has a term called a Compact Pattern Declaration (CPD).

Section 1.3 (Logical Model) of the US GAAP Taxonomy Architecture states:

Disciplined Extensions– The architecture internally enforces design rules to ensure that the base taxonomy from which others will need to extend is internally consistent. It is beyond the scope of the architecture to create a formal expression of extension rules to facilitate "disciplined" or "channeled" or "managed" extensions within systems that use it. We encourage systems that make use of the architecture to build such formal expressions for use within their systems. The Compact Patterns Declarations (CPD) is an example of such formalized expressions for the purpose of managing extension by filers.

Section 3.4 (Consistency and Comparability) of the US GAAP Taxonomy Architecture states (the emphasis is mine):

Systems which implement version 1.0 are expected to provide mechanisms for providing discipline around the extension of the base taxonomies. One example of providing such discipline or "channeling" or "management" of extensions is the compact pattern declaration (CPD). The CPD is a formal XML representation of a pattern [PATTERNS] that allows software to help a user follow exactly the same pattern and rules that were used to construct version 1.0 itself.

The US GAAP Taxonomy Architecture refers to two documents above and in Section 7 (References) in the architecture: UGT Compact Patterns Declarations (CPD) Module and [Patterns] or the UGT Patterns Guide (also called the USFRTF Patterns Guide).  These documents explain the patterns within the US GAAP Taxonomy.

There are two other places which show the sorts of things systems which implement the US GAAP Taxonomy are expected to do.  Section 4.5 of the US GAAP Taxonomy Architecture, Implementation of Tables, explains the [Table] is constructed within the US GAAP Taxonomy and how systems which use the US GAAP Taxonomy are expected to extend the taxonomy, such as SEC XBRL filings.

Another place to see how this can be implemented is by what XBRL Cloud.  You can see these rules here on this page and you can see the validation of these rules, as suggested by the US GAAP Taxonomy Architecture, here on XBRL Cloud's EDGAR Dashboard.  XBRL Cloud calls this an information model, rather than a Compact Pattern Declaration.  But it is the same thing.

The Business Reporting Logical Model also uses the term information model.  That logical model was basically created using ideas first created by the architects of the US GAAP Taxonomy. Those ideas were expanded on by the ITA Interoperable Taxonomy Architecture Group which was made up of the US SEC, IASCF, Japan FSA, and European Commission.

For years I had worked to build sample XBRL taxonomies and XBRL instances, I called these "patterns". You can see the history of that work here. I ultimately realized, partly from participation on the US GAAP Taxonomy Architecture Working Group, of which I was a member, that the patterns needed to be further condensed, this is what the Compact Pattern Declarations which expressed an information model were.  Now I refer to these as meta patterns.

For years I had been making a mistake about how I looked at those patterns or meta patterns and the information models they expressed. I realized this mistake when the FINREP taxonomy released their taxonomy without a presentation linkbase.

Business information is not random, it has patterns. There is not an infinite number of patterns within business information, there is some fininte amount. Here are some patterns which are hard to dispute, most of these are instantiated within the US GAAP Taxonomy:

• Hierarchy: A Hierarchy is an information model where there are relations between facts but the relations do not involve computations.  For example, accounting policies is a Hierarchy.
• Roll Up: A Roll Up is an information model which expresses relations where there is a simple computation between concepts. A Roll Up relation is basically A = B + C + n; where "n" is any number of concepts.
• Roll Forward: A Roll Forward is an information model which expresses a relation where a BASE (beginning + additions - subtractions = ending) type of relation exists.  Basically, a Roll Forward is a reconciliation between two instants in time. An example of a Roll Forward is the cash flow statement or a movement analysis for property, plant and equipment.
• Adjustment: An Adjustment is an information model which is similar to a Roll Forward in that it is a reconciliation; however the dimension or axis which is moving in the relation is the financial report's report date. An example of an Adjustment is the reconciliation of an originally stated balance to a restated balance for an accounting prior period adjustment.
• Variance: A Variance is an information model which is a computation between two different reporting scenarios such as actual and budget.  For example, the difference between the actual and budgeted values for the concept Sales.
• Other Relation: An Other Relations is an information model and is what amounts to a Hierarchy with business rules attached to the concept within the Hierarchy. An example would be the computation of weighted average common shares and earnings per share. These are computations too complicated for XBRL calculations to handle, but they are computations which exist.

The point here is that it is not XBRL which all of a sudden introduced the ideas of the information model.  Information models have always existed but we, as humans, understood what those were and we never really communicated at that level; it is pretty basic and we business users get those relations. But computers are dumb.  We need to break down business reporting so that we can explain the moving pieces to a computer application.  That is what meta patterns and an information model does.

The US GAAP Taxonomy and the filers who use the US GAAP Taxonomy for SEC XBRL filings don't have different information models for "Roll Up" or "Roll Forward", or whatever.  They are the same.  So, the US GAAP Taxonomy and the SEC filers who extend that taxonomy should be using the same information models.

Finally, the information model is not defined by the XBRL presentation linkbase, it is explained by the model itself, what the XBRL looks like.  A computer application can figure this out.  You can help a human understand that information model by articulating it within the XBRL presentation linkbase, like the US GAAP Taxonomy does, for example recall section 4.5 Implementation of Tables as discussed above.  But if you do express it in the presentation linkbase, you need to keep it consistent with the other underlying XBRL which really is what describes the real information model.  Eventually, perhaps the US GAAP Taxonomy will do like FINREP and not even provide a presentation linkbase because a computer can auto generate it based on the underlying information model.  But today, the US GAAP Taxonomy and the SEC require the presentation linkbase, therefore you need to keep it consistent with the underlying XBRL information model which is used to express your business information.

I mentioned that I was updating the business use cases or patterns that I had been nurturing along over the years in another blog post.

I am making more progress and am up to 20 business use cases and have added a bunch of new features.  In particular check out:

• The additional use cases added.
• A landing page for each pattern, here is one example.
• Something to help you find the business use case you are looking for.
• An index page which puts everything together.
• A JPEG image for each business use case (see the landing page).
• Creative Commons licences in key areas to make it clear all this is there for others to make use of as they see fit.

Thanks to all those who have sent ideas and have made me aware of errors so that I can correct them.

I have created an updated set of metapatterns, business use cases (i.e. patterns), comprehensive example, and basic example of using XBRL. I have nurtured these examples over the years and have not adjusted them to comply with the Business Reporting Logical Model created by the XBRL International's Taxonomy Architecture (TA) working group, of which I am a member.  These examples are constructed to help come up with that Business Reporting Logical Model and to prove that model.

You can find this information here in various stages of completion. If anyone has ideas on things they might like to see, please contact me directly and I will see what I can do to add what you feel you might need if it makes sense.

Creating these ultra-high quality (my opinion, I can back it up) examples has been a long process. Over the years I have had a lot of help from a lot of people. While I created these examples and take full responsibility for any errors (although I have validated each of these using three different XBRL processors), I would like to thank those who have helped in the past, these could not exist without their help. At this stage, I would particularly like to thank Herman Fisher and Frederic Chapus, both of UBmatrix, for their help with XBRL Formulas. I would also like to thank Cliff Binstock of XBRL Cloud for his help in generating his fact tables and getting those converted to the Business Reporting Logical Model. I would also like to thank those who are members of the XBRL International Taxonomy Architecture working group for their efforts to create and drum up support for this work. (We still need more members.)

• Metapatterns: Basic building blocks from which the Business Use Cases were built. All of the business use cases can be distilled down to these metapatterns. (Complete.)
• Business Use Cases: Follow the metapatterns. Contributed to figuring out what the metapatterns were. (At this point I have 11 of about 30 business use cases completed.)
• Basic Example: Takes the metapatterns and puts them all into one basic XBRL taxonomy which is quite simple, but shows how the metapatterns relate to one another. Tests the relations between the metapatterns. (Complete except for detailed documentation.)
• Comprehensive Example: Puts each of the business use cases into one XBRL taxonomy and XBRL instance, testing the interrelation of the business use cases.  Also, intended to look like a financial report; but not as complex as a real financial report. (Still have a ways to go on this, I want to finish the business use cases first.)

Keep checking back if you are interested in this sort of thing.  XBRL is not going away any time soon. While this information is quite detailed, I contend that it is worth diving in. Investing in understanding these details pays dividends in many different ways. Also, again, feedback is welcomed. Good ideas to make it even easier to use in particular.

If you are familiar with XBRLS, this new set of examples is intended to replace XBRLS.  Use this stuff instead.