Essence of Financial Reporting

The intent of this collection of web pages is to facilitate brainstorming of how to represent financial reporting schemes using modern approaches such as knowledge graphs.

All financial reporting schemes are grounded in some version of the accounting equation and fit into the double entry bookkeeping mathematical model. Financial standards setters ground their standards in a conceptual framework of key elements of financial statements. This information is interrelated and interconnected and can be represented as a rich knowledge graph.

Putting financial reporting scheme information in machine readable knowledge graphs serves many purposes. One thing this does is make financial reporting standards clearer. But another reason to put information about financial reporting schemes into machine reable form is to help enable "algorithmic regulation", a.k.a:

• MIT refers to this as Algorithmic Business Thinking
• Carnegie Mellon University refers to this as Computational Thinking
• Harvard University refers to this as Regulation, the Internet Way
• Vanderbilt University refers to this as Regulation 2.0
• The Data Coalition calls this Smart regulation
• Tim O’Reilly Founder and CEO O'Reilly Media Inc. calls it Algorithmic regulation
• Deloitte refers to this as “The Finance Factory” and Digital Finance
• Robert Kugel of Ventana Research calls it Digital Finance
• The government of Norway calls this “Nordic Smart Government and Business”

Both humans and machines can read knowledge graphs. Here is an example of a knowledge graph of Noncurrent Assets and the component line items of that higher level line item for IFRS:

A great transmutation of accounting, reporting, auditing, and analysis is occurring. Representing information in machine readable form is part of this change.