Digital Financial Reporting

XBRL US provides best practice guidance for the creation of SEC XBRL financial filings which can be found here.

An improvement on this would be for a set of overarching principles which can be used and applied generally.

MIT's project ConceptNet 5 helps one grasp where digital financial reported is headed. The web site describes Concept5 as:

ConceptNet is a semantic network containing lots of things computers should know about the world, especially when understanding text written by people.
 
It is built from nodes representing concepts, in the form of words or short phrases of natural language, and labeled relationships between them. These are the kinds of things computers need to know to search for information better, answer questions, and understand people's goals. If you wanted to build your own Watson, this should be a good place to start!

Imagine a similar semantic network for financial reporting. Rather than people having to put things together, computers can put things together for you and you use the result.

Go look at two things which I have provided and then go read about ConceptNet 5 again:

• Financial Report Semantics and Dynamics Theory
• Digital Financial Reporting Wiki

Imagine a "Watson" type system for helping accountants create financial reports or for analyzing financial reports.

These ideas are by no means limited to financial reporting.  In fact, the really cool thing is that pretty soon it will be easy for business users to create their own "Watson"-type systems for performing all sorts of tasks.

Financial reporting is blazing a trail on the semantic web as I see it.  There will be lots of cross over to numerous other domains within business.

Jeopardy anyone?

I mentioned the disclosure templates I am creating in a prior blog post.  I have made a number of enhancements to the disclosure templates and have added additional templates, I am up to 26 disclosure templates currently.

You can get to the current index to the disclosure templates here.

(Note that I am having a little problem with the HTML5 I am using to display the index.  I cannot quite get the HTML5 correct to show the frame on the right side big enough but not end up being rendered in the wrong location.  This is due to my limited knowledge of HTML5.  If you cannot see anything on the left side after you click on something on the right, scroll down to the bottom of the page, you will find it there.  I am trying to figure out how to fix this little glitch.)

The biggest addition to the templates is more visibility into the business rules expressed using XBRL Formula.  Now, there is a list of each rule within the template description.  I also added the business rule validation results to the list of files and XBRL syntax validation results. 

Also, the number of software vendors implementing these disclosure templates has increased by one.  There are at least 4 software vendors who get the ideas behind these disclosure templates.

The next step is to now build more disclosure templates.  I hope to have 50 by the end of the month and 250 by the end of June.  I am using this analysis of 291 SEC 10-K filings to help determine the most common disclosures; those will be the ones modeled first.

Thank you to XBRL Cloud who provides this XBRL technical syntax validation (along with other stuff which makes building these easier), to UBmatrix/Edgar Online whose XBRL processor I am using to verify that the business rules are correctly created, and to CoreFiling whose product Magnify is helpful in verifying the correctness of the disclosure templates and which provides the SEC-type renderings which I use as visualizations for some of the disclosure templates.

If you are a software vendor or an accountant who wants to understand more about these disclosure templates, you know where to find me. There is a lot that you cannot see and a few things which are hard to understand simply by looking at the disclosure template prototype.