Digital Financial Reporting

The document Modeling Financial Information Using XBRL (DRAFT) is available on the index page of the samples and examples I have been creating. That document summarizes the many, many samples and examples which I have been putting together to help me see if the Business Information Logical Model works as I would like it to work.

Lots of people seem to be struggling with the symptoms of how XBRL is being used today. This material strives to solve the problems, not fight the symptoms.  The symptoms will go away once the problem is solved. Also, keep in mind that if you are trying to figure out how to get XBRL into your existing processes, realize that another way to approach things is to try and understand how XBRL can make your current processes more effective and effecient.

I wish I could say that this information is helpful to the average business user. It probably is not and most will not choose to make their way through it. I cannot write that material that I want to write until software applications change their approach to working with XBRL. The material is quite helpful to business users who are early adopters of XBRL and will endeavor to wade through the material.  The material will help these curious business users begin to ask good questions. Those good questions will begin to impact all the moving pieces which impact business reporting where XBRL is being used as an output.

For those leaders in the accounting profession who do have the intellectual curriousity to dig in and try and figure out how to best make XBRL serve financial reporting and other areas of accounting, I think there is a lot there to help you. For example, when having software vendors demo their analysis software, use the comparison example's three XBRL instances rather than the scripted demos of software vendors.  Understanding the material in that document will turn you into an educated, informed buyer.

Most accountants aren't really that up on the issues relating to working with XBRL. All that will change when legal liability associated with filed XBRL kicks in.  Further, the SEC has already said publicly that it's intension is to not continue to supplement the HTML or SGML filings with XBRL, but to make the HTML and SGML go away.  When this happens, accountants will look at the XBRL differently.

Do you really want to wait until the last minute, when legal liability kicks in and XBRL is the only document you are filing with the SEC?

There are more and more accountants realizing that financial reporting using XBRL is a foregone conclusion. We still have many, many details to work out; how to "tame the XBRL beast". The information in Modeling Financial Information Using XBRL can help us get the software tools, proper XBRL taxonomies, and other infrastructure we need and get to the point that we want to use XBRL because it actually makes the process of financial reporting more effective and efficient than the current process which has been with us for hundreds of years.

If you feel so inclined, roll up your sleeves and dig in.  If not, don't worry; your competitors are.

I took the Comprehensive Example, created two additional copies (so that I have three companies), and now have the Comparison Example.

The Comparison Example is the capstone of what someone is likely trying to achieve in XBRL: comparison of some set of business information.  There are three ways business information is commonly used:

• Using a single information set:  For example, using one financial report.
• Comparing across periods: For example, comparing your financial report over a period of time.
• Comparing across entities: For example, comparing three entities at one point in time or for a period of time.

The Comparison Example was created to test these use cases. These three XBRL instances and related XBRL taxonomies are as identical as they can be.  Each company has its own meta data where it needs to.

When you look at this example, consider where the meta data is defined.  There are four levels here in this example:

1. Company taxnoomy: Defining concets at this level provides the least comparability as it is defined at the company level, but at the same time it provides the most flexibility because the company can define anything it wants.  If the GAAP taxonomy follows the FRLM and BRLM, then the compnay does also.
2. GAAP taxonomy: This gives improved comparability because different companies share the same GAAP.  It does not have to be this way, conceivably every company could create their own XBRL taxonomy and create great XBRL.  But, if every company did that individually, comparisons would still be possible, they would just be difficult becuase you would basically have to physically map one company to another.
3. FRLM (Financial Reporting Logical Model) taxonomy: This level provides comparability between GAAP taxonomies, should that be desired.
4. BRLM (Business Reporting Logical Model) taxonomy: This can be use by different domains who want to leverage the Business Reporting Logical Model.  The advantage here is that if a software application were developed at this level, anything above it in this list would be comparable with that software.  The software would still be XBRL compliant, i.e. the BRLM is 100% XBRL compliant.
5. XBRL: Defined by XBRL. Here, you have the least amount of flexibility (i.e. you must follow XBRL to be XBRL compliant) but you also have the most comparability. If everything was defined at this level it would be very comparable, but not very flexible. Basically, if everything were defined at this level it would serve one business domain and would basically be a form.

The level at which things are defined is determined by the business domain applying XBRL. The advantage of the BRLM level is that it allows users to be clear about the business semantics they are using and software applications can leverage that clarity, making the software and XBRL easier to work with.

Meta patterns are the key to making XBRL easier for business people.  This is an updated explanation of what meta patterns are and how they make XBRL easier.

Recall that you can grab sample XBRL instances and XBRL taxonomies of the meta patterns I have created here.

The US GAAP Taxonomy has meta patterns. [Table]s, [Roll Forward]s, and a few others are explicitly identified.  It has [Roll Up]s and [Hierarchy]s which are not explicitly itentified, but they do exist. Leveraging patterns like these is done all the time by information technology professionals. Soon, business reporting tools will leverage these meta patterns to make working with XBRL easier for business users.