Danny Werfel, the Comptroller for the Federal Office of Management and Budget (OMB) makes a good point when he states:
“The way I approach it, and have collective agreement among the key leaders among leaders at Treasury, OMB, and other critical parties that are thinking about this, is that XBRL is the second question to ask.” (see Federal News Radio)
This isn’t what Werfel was alluding to above, but I agree that XBRL has become the second question to ask and for me the first question, especially for XBRL software vendors like us, has become: Now it’s gaining momentum, how are we going to leverage it?
Once you have financial, and other data, tagged in XBRL what are you going to do with it – apart from the obvious stuff like render it to look like a financial statement, compare and contrast like-for-like, taxonomy-based data and benchmark peer groups? Well understanding XBRL from a different perspective is always helpful. Think of XBRL as yet another eventstream. Every XBRL tag that is ‘reported’ electronically by a business is like a Twitter Tweet or a Facebook Poke. A tiny fragment of the lifestream of an organization, conveniently categorized for data mining and analysis based on an agreed taxonomy.
Now many XBRL-tagged data items are not that interesting on their own or even collectively. But there are subsets of tags that are relevant depending on what you are monitoring the eventstream for. If you are looking for evidence of regulatory compliance or fraud for example, or financial investment opportunities or examples of good practice. That’s where I see the focus of XBRL applications going in the near future. Beyond rendering and comparing and towards XBRL eventstream mining that leverages outcome-focused tag ‘currents’.
Imagine if corporations presented another view of their financial information. Not as reports – that they organize and present, to represent their ‘framing’ of their results in a specific way to suit a specific purpose – but as Twitter-like, tag-based event streams. A bottom-up (data element) framing of XBRL rather than the current top-down (rendered report) framing. In Twitter you search for events in the stream by looking for terms that have been ‘hash’ tagged e.g. #XBRL. Applying the same paradigm to the XBRL eventstream lets us search the corporate lifestream in much the same way e.g. #revenue to see all revenue tagged events. Then this substream can be analyzed in specific ways, maybe just to provide a chart of revenue trend over time or maybe to look for rule-based exceptions in the eventstream.
Now imagine that subsetted collections of tags, here I’ll call them ‘currents’ to go with the stream metaphor, can also be searched in order to narrow the search in an outcome-driven way e.g. #currentname. Then you have an even more powerful basis for mining the XBRL eventstream – something that helps to provide even better ‘cabling’ if we refer back to Werfel’s original analogy.
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