Abstract

This resource is for the Accounting Oracle Machine. The Accounting Oracle Machine is a collection of resources primarily for US GAAP and IFRS financial reporting. This Accounting Oracle Machine provides resources to accountants, auditors, and analysts in both human readable form and machine readable form. At this time, this Accounting Oracle Machine is a working proof that is being created in order to figure out how to synthesize this resource. This resource embraces 'digital' and 'informatics' applied to accountancy.

1. Introduction

This resource is the landing page of the Accounting Oracle Machine. The Accounting Oracle Machine is machine-readable and human-readable resources for accounting, reporting, auditing, and analysis (collectively referred to as 'accountancy'). The objective is to provide a tool for modern accountancy; accountancy in a digital environment. (Modern Accountancy)

NOTE: This version of the Accounting Oracle Machine is a working proof of concept that is used to figure out how to best organize this resource.

An Accounting Oracle Machine is machine-readable information that is also convertable into human-readable information. This is as contrast to resources like the AICPA Best Practices in Presentation and Disclosure or GAAP Guides or disclosure checklist.

1.1 Accounting Equation

Accounting Equation
The accounting equation (a.k.a. fundamental accounting equation, balance sheet equation) is the cornerstone of financial reporting. The accounting equation is common knowledge. The accounting equation has multiple different versions, but all versions reconcile to this one fundamental model. This financial reporting scheme that documents the accounting equation is a basic example and training tool. [ACCOUNTING-EQUATION]
ISSUE: This should, perhaps, also include the net assets based accounting equation also.

1.2 Elements of Financial Statement (SFAC 6)

Elements of Financial Statement (SFAC 6)
The FASB's Elements of Financial Statements ([FASB-CON6]) defines 10 elements that make up financial statements which are created using US GAAP. This prototype creates a reporting scheme for that very basic example, using it as a basic financial statement for training purposes.
ISSUE: This is for US GAAP. Another version of this should be done for IFRS's high level elements.

1.3 Elements of Financial Statement (SFAC 8)

Elements of Financial Statement (SFAC 8)
The FASB's Elements of Financial Statements ([FASB-SFAC8]) defines 10 elements that make up financial statements which are created using US GAAP. This prototype creates a reporting scheme for that very basic example, using it as a basic financial statement for training purposes. The SFAC 8 example builds on the SFAC 6 example and this time does represent Net Assets and introduces the notion of a reporting style.
ISSUE: Again, this example is for US GAAP. Another version of the elements of financial statements should be created for IFRS's high level elements. That will be forth coming.

1.4 Common Elements of Financial Statement (Four Statement Model)

Common Elements of Financial Statement (Four Statement Model)
This resource begins to look more like a general purpose financial statement, introducing the notion of the four statement financial report model: balance sheet, income statement, changes in equity statement, and cash flow statement.

1.5 MINI Financial Reporting Scheme

MINI Financial Reporting Scheme
This resource begins to look more like a real financial reporting scheme, introducing the idea of financial reporting schemes. With this MINI financial reporting scheme, a basic but real looking general purpose financial report can be constructed. Again, this example consciously avoids the use of noncore dimensions which will be introduced in the next example financial reporting scheme.

1.6 PROOF

PROOF
This resource provides a complete set of the logical information patterns that would appear in a financial report. This resources introduces the notion of noncore dimensions. All previous resources used only core dimensions. This 'financial reporting scheme' is less like a real reportinng scheme and more about providing a suscint example that can be used to focus on report logic. This is an excellent teaching tool and software testing tool.

1.7 AASB 1060 Financial Reporting Scheme

AASB 1060 Financial Reporting Scheme
This resource provides the best example of a financial reporting scheme represented using good practices/best practices. This is a very real looking financial reporting scheme created using an actual published financial reporting scheme in Australia, General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities.
About 80% of the financial reporting scheme is represented (I figure) and everything represented completely tested and proven to be functioning properly. The point is, a financial reporting scheme cannot be known to be working effectively unless it is actually tested to PROVE that it works.

1.8 US Generally Accepted Accounting Principles (US GAAP)

US Generally Accepted Accounting Principles (US GAAP)
This resource provides machine-readable and human-readable information related to financial reporting using US GAAP.
ISSUE: This is not complete.

1.9 International Financial Reporting Standards (IFRS)

International Financial Reporting Standards (IFRS)
This resource provides machine-readable and human-readable information related to financial reporting using IFRS.
ISSUE: This is not complete.

1.10 References

The following is a summary of normative and informative references helpful in understanding this information:

1.7.1 Normative references

[FASB-CON6]
Elements of Financial Statements. Financial Accounting Standards Board (FASB). 2004. URL: https://www.fasb.org/Page/document?pdf=aop_CON6.pdf&title=CON%206%20(AS%20AMENDED)
[FASB-SFAC8]
Elements of Financial Statements. Financial Accounting Standards Board (FASB). Statement of Financial Accounting Concepts No. 8; Chapter 4. December 2021. URL: https://www.fasb.org/Page/document?pdf=Concepts_Statement_8-Chapter_4-Elements.pdf
[PWC-SFAC8]
Elements of Financial Statements. Financial Accounting Standards Board (FASB). Statement of Financial Accounting Concepts No. 8; Chapter 4. December 2021. URL: https://viewpoint.pwc.com/dt/us/en/fasb_financial_accou/statements_of_financ/con_8_conceptual_fra/assets/chp4financestatement.pdf
[IFRS-CONCEPTUAL-FRAMEWORK]
Conceptual Framework for Financial Reporting (IFRS). IASB. March 2018. URL: https://www.ifrs.org/supporting-implementation/supporting-materials-by-ifrs-standards/conceptual-framework-for-financial-reporting/
[XBRL-ACCOUNTING-ARCROLES]
Accounting Semantics Arcroles. XBRL International. January 2023. URL: https://www.xbrl.org/REQ/accounting-semantics-req/REQ-2023-01-04/accounting-semantics-req-2023-01-04.html

1.7.2 Informative references

[INFORMATICS-ACCOUNTANCY]
Informatics for Accountancy. Charles Hoffman, CPA. June 3, 2024. URL: https://twinfox.io/xbrl/2024/library/InformaticsForAccountancy.pdf
[ACCOUNTING-EQUATION]
Accounting Equation. Wikipedia. Retrieved June 10, 2024. URL: https://en.wikipedia.org/wiki/Accounting_equation
[FINANCIAL-STATEMENT]
Financial Statement. Wikipedia. Retrieved June 12, 2024. URL: https://en.wikipedia.org/wiki/Financial_statement
[STANDARDS-IFRS]
International Financial Reporting Standards. Wikipedia. Retrieved June 10, 2024. URL: https://en.wikipedia.org/wiki/International_Financial_Reporting_Standards
[STANDARDS-USGAAP]
Generally Accepted Accounting Principles (United States). Wikipedia. Retrieved June 10, 2024. URL: https://en.wikipedia.org/wiki/Generally_Accepted_Accounting_Principles_(United_States)
[THEORY]
Logical Theory Describing Financial Report (Terse). Charles Hoffman, CPA. November 10, 2021. URL: http://xbrlsite.com/seattlemethod/LogicalTheoryDescribingFinancialReport_Terse.pdf
[METHOD]
Seattle Method. Charles Hoffman, CPA. April 4, 2024. URL: http://xbrlsite.com/seattlemethod/SeattleMethod.pdf
[FRAMEWORK]
Framework (Seattle Method). Charles Hoffman, CPA. April 4, 2024. URL: http://xbrlsite.com/seattlemethod/Framework.pdf
[FAC]
Fundamental Accounting Concepts (FAC). Charles Hoffman, CPA. April 4, 2024. URL: http://accounting.auditchain.finance/fac/Index.html
[SHOWCASE-OF-REPORTS]
Showcase of Reports. Charles Hoffman, CPA. June 11, 2024. URL: http://www.xbrlsite.com/mastering/Part04_Chapter07.1_ShowcaseOfReports.pdf

1.11 Software (Appendix)

The following is a summary software which are known to process the accounting oracle machine artifacts correctly:

1.11.1 Commercial quality software

[PESSERACT]
Pesseract. Desktop application which must be installed. Working proof-of-concept. Best at viewing and validating reports. June 2024. URL: http://pesseract.azurewebsites.net/
[ARELLE]
Arelle. Open source technical oriented XBRL processor. Commercial software. Does not process all Seattle Method rules. June 2024. URL: https://arelle.org/arelle/
[PACIOLI]
Auditchain Pacioli. Cloud based commercial software. Web3 version available. Proven to process 100% of Seattle Method rules effectively. June 2024. URL: https://pacioli.auditchain.finance/tools/PowerUserTool.swinb
[LUCA]
Auditchain Luca (part of Auditchain Suite). Cloud based commercial software (still in development). Create and validate XBRL and Inline XBRL. Proven to process 100% of Seattle Method rules effectively. June 2024. URL: https://digitalfinancialreporting.blogspot.com/2024/01/getting-started-with-auditchain-luca.html