Digital Financial Reporting

I am taking another stab at reorganizing some things to make them more logical and simpler.  This is a work in progress, but I am using this page, Financial Reporting Metadata, to get organized.  I am concerning myself with both US GAAP financial reporting, IFRS financial reporting, and general business reporting as a way to get things properly organized.

People have a tendency to make this stuff harder than it really needs to be.  Here are some things that drive me crazy:

1. Nonstandard document formats: Some regulators only publish taxonomies and reports in ZIP files.  That is fine for providing supplemental copies of things, but use standard XBRL which can be directly read into any XBRL processor without having to jump through extra hoops such as unzipping the ZIP file.  The US SEC does an excellent job of making things directly readable.  There are some issues with automatic redirection of "http" to "https". Some software does not read taxonomy files correctly as a result.
2. Nonstandard documentation: Provide as much documentation as possible in standard XBRL.  The use of XBRL label linkbases for providing commentary and XBRL reference linkbases for referencing to external resources and even examples is good.  Publishing things in PDF, Excel, Word, and other formats that are (a) nonstandard and (b) not linked to other related and relevant information is not good.
3. Unnecessary variability: Engineer and statistician W. Edwards Deming defined quality as "predictability," and called variance "the enemy of quality." Different regulators doing things differently for no logical reason makes little sense, causes confusion, makes things more complicated unnecessarily, and really is sloppy and shows someone is not doing their homework.
4. Insuffecient metadata: It blows my mind that public companies cannot even create XBRL-based financial reports and they still cannot get the high-level accounting concepts correct.  I have been measuring these reports for going on seven years.  Business rules prevent anarchy.

XBRL has some interesting and very useful features...which few people seem to know about or use.  One of those features is the ability to add commentary and examples using the XBRL label linkbase or the XBRL references linkbase.

I created some demo commentary linkbases for US GAAP and IFRS a while back.

The following commentary linkbases and references linkbases build on those examples:

• Commentary for IFRS FULL 2017
• Commentary prototype created for IFRS BOX, IFRS FULL 2017
• Examples prototype created for my comparison examples, IFRS FULL 2017
• Examples prototype created for IFRS BOX, IFRS FULL, 2017 (only two of these links work related to net cash flows)

So what exactly is going on?  Essentially, what I am showing is that if software vendors create their software correctly, you can pull resources directly into their software and expose those resources to users without the software vendors having to write a single line of code.

I will provide more information and maybe a video later on this topic.

I am getting closer and closer to what I have been trying to achive for quite some time.  I still have some significant tuning to do, but the general form is revealing itself. Have a look at the human-readable IFRS information below, but keep in mind that this information is also machine-readable:

IFRS:

• Balance sheet:
• Income statement:
• Statement of comprehensive income:
• Statement of income and comprehensive income:
• Cash flow statement:
• Document information:
• Statement of changes in equity:
• Notes (i.e. text blocks)
  • Notes
  • Policies
  • Disclosures
• Statements, notes, polices, disclosures combined (This video shows you what you can do with this basic RSS feed.)

US GAAP:

• Statements, policies, notes, disclosures
• Text blocks
• Disclosure best practices
• Disclosures (older style)
• Reporting styles

Again, not exactly where I want all this but if you use your imagination you might be able to figure out where I am going.  If you don't quite understand, reading Computer Empathy could be very helpful.

Here is the beginning of a set of machine-readable reporting styles for IFRS.  I will be creating reporting styles for the 250 companies that report to the SEC, form 20-F, using the IFRS taxonomy.  Here is a list of those 250 companies. Here is a list of the disclosures of those companies.  You can compare disclosures using that set of information.  For example, here is a comparison of the auditor renumeration disclosure.

Here is some additional information for those IFRS financial reports.

And here is the same reporting styles information for US GAAP.  Here is a comparison of some of the US GAAP disclosures similar to what I did for IFRS.  Here are the 5,734 companies in an Excel spreadsheet.

What I want to do is standardize all this, make it the same for IFRS and US GAAP.  This is excellent information for creating financial reports.  I just have to organize the many, many prototypes that I have created.

Stay tuned!