Digital Financial Reporting

Financial reporting is a system that is comprised of many interconnected parts.  Today, many of these interconnections are missed because too many people look at financial reporting systems as silos of functionality.  Understanding Digital helps readers understand these interconnections, describes those interconnections, and explains how to use XBRL formatted information to physically represent those interconnections in machine-readable form.

This is a small example of a financial report.  Notice that everything is connected to other things:

(Click image for larger view)Using the information above, software can transform the information into something more useful to humans that looks like this:

(Click image)No magic.  Everything is driven by carefully crafted machine-readable information like this.

A Financial Times Article, Companies must include environmental and social performance measures, discusses the notion of "impact weighted accounts" or impact reporting or integrated reporting or sustainability reporting or triple bottom line. 

Essentially, "performance" is redefined from short-term financial performance such as quarterly earnings to performance which includes long-term and societal considerations such as providing good jobs, paying responsible tax, finding innovative ways to solve pressing issues such as climate change, and producing products that truly benefit customers.

Many different organizations are working on this idea including SOPACT, SASB, GRI, HBS, The Reporting Exchange to name a few.

Clearly this information should be reported in machine-readable form such as XBRL.