Great presentation by XBRL International and XBRL USA on Blockchain, Distributed Shared Ledgers and use of the XBRL data standard for more effective data disclosure/analytics to support both the capital markets and government oversight/management of risk.
Distributed shared ledgers "smart ledgers" offer a range of benefits to companies and to government. As the term implies -- they can be distributed globally in a precisely controlled fashion. They are highly efficient because changes by any person within the organization in any location in the world with the necessary permission/security to modify the ledger are immediately reflected in all copies of the ledger. Distributed shared ledgers can also be secure – in that unauthorized/ permissioned edits can be rejected so corrupting the distributed shared ledgers is very difficult to accomplish. But the real power of distributed shared ledgers is not the fact that the secured platform exists globally through the Internet but that other applications can be utilized in combination with distributed shared ledgers such as "smart contracts" put on top of them and that specific data elements within supporting documents such as "smart contracts" contained within distributed shared ledgers can be individually tagged using global business and financial reporting standards such as XBRL. This data can be linked to accounting definitions that allow for superior analytics parsing vast amounts of data.
Current most of the securities regulators around the world of mandated the use by public companies of the XBRL data tagging standard for financial reports linked to specific items within the financial statement (for example, revenue). Image the concept of shared distributed ledgers that contain information about public companies with specific data items tagged in XBRL that can be machine-readable – meaning the specific accounting items can be extracted, sorted and analyzed for immediate data analytics of companies or organizations contained within the supporting documents. This is the future that is quickly approaching combining these types of open, freely-available, global technologies.
The use of management accountants will increase to analyze data more effectively as we move away from traditional – paper centric/ PDF type reporting processes to a machine-readable process.
What will be needed is government support in the development of shared distributed ledgers to create a clear vision of how this technology can improve the way both the private sector and government does its business and is able to deliver services to investors and citizens. This needs to be followed by government acting as an expert customer to implement the technology — procuring distributed ledger solutions where they are applicable – possibly in the area of regulatory reporting where Big Data is the norm. In doing so, government can support and influence the development of economic activity in the private sector/capital markets, including new and growing businesses to create new jobs and improve economic opportunities.
It is clear that Blockchain technology will play an important role both for government and for the capital markets and management accountants can play a major role in its development.