21st Century Financial Reporting Standards
Bringing Financial Reporting Standards into the 21st Century
The purpose of financial reports is:
to provide USERS
with USEFUL information
in a USEABLE format.
But they don't.
What can we do about this?
Who are the Users?
What information will they find Useful?
And how can that information be best presented?
This website seeks to promote blue skies and radical thinking on how financial reports can be brought into the 21st century.
First there is problem definition. There is an old adage that if you can clearly define the problem, you are 80% of the way to identifying a solution.
Then there are parameters for what a solution should incorporate.
Finally, thoughts about how to transition from current international and national financial reporting standards to 21st Century Financial Reporting Standards (21CFRS).
There will be a blog where contributors can publish short articles relevant to this topic.
Existing financial reporting standards were developed before AI became widely available and (almost) reliable. The fundamentals were also developed before spreadsheets became ubiquitous.
New standards should presuppose that:
AI will be used to extract and summarise data.
Users have developed their own models and are looking to financial reports to:
Extract numbers to populate their models, and
Judge management’s story about the performance of the entity.
Financial reports will be a source of data for Users’ models and an opportunity for management to present their story about the development of the entity in their own way.
