An interesting post at the Accounting Elf discusseshow financial statements should be more like blogs. With the rise of social media and the generally higher expectations of information consumers, this is an important topic. Financial reports are after all just a channel of communication between an organization and its stakeholders and there’s certainly a lot that could be done in this area.
Most annual reports are now provided online and often in an easy to navigate form via a table of contents and a searchbox capability – likeMicrosoft’s 2009 Annual Report for example. This is what I would call level 1 of report transparency: I can view a report online, navigate the content and find stuff – if I know what I am looking for.
Level 2 of report transparency is concerned with picking out themes or searching for patterns. An important basis for this is that specific terms and numbers are cross-referenced within the report content (as Accounting Elf mentions – for example cross-referencing a footnote to the financial number it relates to). This cross-referencing is something that XBRL tagging can help with in order to facilitate various kinds of content visualization.
One of the simplest forms of content visualization is the tag or wordcloud. Below is an example of a wordcloud extracted from Microsoft’s 2009 Annual Report: