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XBRL Semantic Model

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The purpose of the Triangle of Meaning is to understand how to make communication reliable, repeatable, and interoperable. Basically the triangle of meaning is about precision of communication. As explained by the Triangle of Meaning a conceptualization (a thought process), referents in the conceptualization (real world things being conceptualized in the form of a model ), and representations or implementations of the conceptualization of the real world thing needs to be in sync in order to communicate effectively . XBRL provides both a global open industry standard technical syntax ( implementation ) and a semantic model ( conceptualization ) of the real world notion of a "business report" ( real world thing ).  Both the technical syntax and the semantic model are described in the many  XBRL Specifications . The real world things that fit into that model are defined within my Essence of Accounting , reporting frameworks used , accounting and reporting standards written, con...
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Structuring Systems into Discrete Stable Units

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This article pulls the ideas of the Atomic Design Methodology which was created by Brad Frost, the ideas of Kurt Cagle related to the holon , the practice of strong typing , the notion of a state machine, the mathematical notion of the manifold from the branch of mathematics called topology, and the child's toy called the Lego brick . To this, add the quality control techniques of Lean Six Sigma and Agile .  Now, apply all that to the deterministic system that is called double entry bookkeeping. Atomic Design is a methodology for structuring systems by breaking those systems into discrete, stable, typed units at different levels of complexity: atoms, molecules, organisms, and species. Each level represents a progressively richer functional structure. This creates an explicit hierarchy of structures which can be leveraged.  Atoms are the basic building block.  Molecules are bonded functional units created from assembling atoms.  Organisms are assembled from molecu...
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Computability

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Computability is the ability for a computer to perform work within a system . In order to make certain we are on the same page; we want to define several specific terms very clearly. A system is a set of elements, structures, connections, types, conditions, boundaries, observations, measurements, algorithms, and interaction patterns between the different parts and boundaries of the system which serves a specific purpose. A system is created by a group of stakeholders that have a shared understanding . Complexity is the degree or level to which a system’s elements, structures, conditions, observations, measurements, and behavior depends on interactions that may, or may not, be cleanly decomposed into it understandable independent parts. There tends to be three levels of complexity which have an impact on computability of a system: simple, complicated, and complex. Simple system (a.k.a. non-complex) : Predictable and deterministic. The system is “simple” or "non-complex" and ...
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Standardized vs Customized Reports

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Both standardized forms and customized reports have their pros and cons and specific capabilities. Financial statements and financial reporting as practiced when using financial reporting frameworks (a.k.a. reporting schemes) such as United States Generally Accepted Accounting Principles ( US GAAP ), International Financial Reporting Standards ( IFRS ), Government Accounting Standards in the United States ( GAS ), International Public Sector Accounting Standards ( IPSAS ), and other such financial reporting frameworks are not "standardized forms". Rather, such financial reporting frameworks are intended to be, and should be, "customized reports". If a customized report type approach is used, "freeform" or uncontrolled report customizations simply will not work.  Rather a "controlled report model" approach must be used in order to keep reports created within the boundaries of a specified report model in order to facilitate both the flexibility ne...
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Essence of Modeling

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A model is an intentional abstraction of reality: a simplified, structured way of describing a system so people can understand it, communicate about it, and solve problems together. It is not the real-world thing itself, but a useful approximation that captures the essential elements, relationships, and patterns of a subject domain.  A model is an abstraction of reality according to a certain conceptualization . Modeling is the process of organizing information for community use in the form of a model.  The model provides a framework for human communication about the subject domain, a mechanism for explaining conclusions about the subject domain, an a mechanism for managing varying viewpoints within the subject domain. A map is one of the clearest examples of a model. You might have heard the phrase, "The map is not the territory."  The map is not the actual territory, but a map can be quite useful in navigating a territory. A map includes just enough information about t...
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Coming Transformation of Accounting Information Systems (Alternative)

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"Isn't it astonishing that all these secrets have been preserved for so many years just so we could discover them!!"  -- Orville Wright, June 7, 1903 Accounting, reporting, auditing, and analysis will go through a significant refactoring over the coming years.  This refactoring will transform the roles of accountants, auditors, and analysts from their current roles as "data janitors" into curators and stewards of knowledge and truth. Allow me to explain. The Legacy Paradigm: Systems Built Assuming Inconsistency For decades, accounting information systems assumed that data would be inconsistent. Errors were expected, and organizations compensated by building manual pipelines for checking, fixing, and reconciling information; a perpetual cycle of remediation. This approach produced two forms of fragmentation: Physical fragmentation : data scattered across spreadsheets, ledgers, platforms, and files  Semantic fragmentation : incompatible meanings, definitions, and ...
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Coming Transformation of Accounting Information Systems

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For decades, accounting information systems were not engineered to ensure that data remained consistent by design. In that paradigm, inconsistency is assumed. Errors inevitably enter the system, and organizations respond by building endless processes (a.k.a. pipelines) that allowed humans to manually check, fix, adjust, and reconcile. This mindset treats truth as something assembled after the fact, through labor‑intensive cleanup. It is a paradigm of perpetual remediation . This legacy mindset also produces physical fragmentation (data scattered across systems, files, electronic spreadsheets, ledgers, and platforms) and semantic fragmentation (incompatible meanings, definitions, and structures). Fragmentation has costs associated with it.  For example, once fragmented the traceability and provenance chain breaks. You cannot reliably follow a fact from its origin to its use. You cannot prove what is true; only reconcile what went wrong. Accounting & Audit by Design (A&AD)...
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