As said by Mark Byatt, Sonja Horn at the Journal of the IASB Foundation, Q3, 2007, the volume of annual reports has increased considerably over the past years. International efforts are been done to standardize Accounting methodologies and to simplify reporting and business analysis.
Principle-based standards, narrative reporting and technology all have fundamental roles to provide rules and tools for a better accounting, reporting and business analysis in the global context.
The benefits should impact on reporters, regulators, investors, businesses, market commentators and governments across the globe. Truly global capital markets require a common language to articulate business performance, to control and better handle risk and accelerate financial reporting and analysis.
A global convergence is observed: more than 100 countries in the world are adopting the International Financial Reporting Standards (IFRS).
“Businesses are complex and numbers on their own are never going to tell the full story“.
Narrative reporting is a vital complement to the figures. “The narrative statement is not an adjunct. It is a key component“ says Robert Herz, chairman of the FASB, UK.
A fist technological initiative for combating complexity is XBRL, the IT language that makes possible the tagging, easy retrieval and reconfiguration of information in accounts. The IASB board says that XBRL, as a tool will, based on principle-based standards and alongside a possible more formalized use of narrative reporting in the future, aid the process of further simplification
Semantic Financial Reporting
Epistematica has studied and experimented an original approach for the XBRL-based Digital Financial Reporting, that introduces the possibility of defining the semantics of financial facts.
This approach is based in a strongly logical knowledge representation that aims at running inferential processes to automatically extract knowledge that is implicit in balance sheets and notes.
Epistematica aims at continuing the research and at applying the results in order to project and develop innovative software applications, able to offer remarkable advantages with respect to those currently offered in the market.
The introduction into the market of innovative Knowledge-based Systems will provide a step forward in the required process of simplification and easier management of financial reporting, congruently with the global evolution of the Financial Services market and the IT tendencies for it.
Luca Severini
CEO and founder of Epistematica
Rome, 10th April 2008
Related works:
- Paper: Semantic XBRL – Translate XBRL documents into OWL ontologies
- Ontologies: Reuters-XBRL-OWL
(Please send an email to info [at] epistematica.com to obtain this document and the OWL files)
