Welcome!

Industrial IoT Authors: XebiaLabs Blog, Elizabeth White, Antonella Corno, Liz McMillan, Jyoti Bansal

Related Topics: Industrial IoT

Industrial IoT: Article

Computational XSLT for Financial Statements

A new role for the Extensible Stylesheet Transformation Language?

Schema languages like XBRL (the Extensible Business Reporting Language) can define the structure of a financial statement, and the data itself can be saved as an XML instance of the schema. The data is often processed further using formulas; for example, to verify balances and derive data for financial analysis. This processing is traditionally done in a non-XML application, but staying in the world of XML, I ask: How well can XSLT (the Extensible Stylesheet Transformation Language) do these calculations and what are the advantages? Using this language to create data is called Computational XSLT and it opens the way to distributing financial formulas as a set of equivalent XSLT functions that are readable and run on any XSLT processor. No new standard is proposed but a new role for XSLT 1.0/2.0 or XQuery1.0 (the XML Query Language) is suggested, and this role is compatible with data in XBRL as well as with any other XML format.

Financial Statements: Structure and Data
The items in a financial statement (e.g., current assets and fixed assets) have labels that have an agreed meaning within the accounting standard being applied (e.g., US-GAAP). XBRL defines the items using XSchema and linkbases that use XLink (the XML Linking Language). The schema define the items and their types, and the linkbases contain additional information; for example, while the schema refers to an item by an ID, a presentational linkbase links that ID to a readable label for final presentation. Having defined the items, an instance document assigns data to the items for a particular company at particular points in time. In an XBRL instance document, this point in time and company label for an item's value is called the context of the item's value.

Formulas
Experts in financial data create formulas. These experts must also define the logic for handling missing data and other complications. Without that logic, the formulas can't be evaluated as intended. Formulas are used for data validation and analysis. There are many private and some third-party formula languages being applied to financial data. However there is common ground, as shown by the XBRL Formula Requirements initiative, which provides an analysis of the requirements and has use cases to show how the proposed formula language might work. The formulas are held in calculation linkbases.

XSLT As the Formula-Processing Application
With the input data in place as an instance of an XBRL or some other schema, calculations can be made using the formulas defined in linkbases or other XML or non-XML mark-up languages. The processing application that produces the calculated data usually works from formulas in non-XML scripts, but in the world of XML, an XSLT processor is a standardized application that can transform XML instance data to calculated data using readable instructions in the XSLT language. So to harness the power of XSLT, the missing link is to transform a set of formulas into an XSLT file.

The XSLT file then provides a way of sharing a readable, run-anywhere implementation of formulas and their processing logic. For example, such a file could be shipped with data (input plus calculated) to show how the calculated data was derived; or the user can apply the formulas to his own data in batch mode on a server, or individually in a browser or desktop application. Perhaps the biggest advantage of this approach is that it offers a relatively direct route from relational data to calculated data if it's used in conjunction with the XML extract-and-transform (via XSLT) support now offered by most database vendors (e.g., Oracle's XSQL API).

Objectives
Having made a case for XSLT for financial statement calculations, I will show the steps by which formulas in a schema are transformed into an XSLT file in which each formula has a corresponding XSLT function. The XSLT functions are then applied to input data to give calculated data. A simplified case study will show the essential components and then the complexity is raised to a higher level by introducing the real-world need to handle missing data. Finally, I will cover the performance of computational XSLT based on my experience in applying hundreds of formulas to thousands of statements.

Although XBRL schemas, linkbases, and instances could have been used for the case study, for brevity, and to focus on the essentials, I have merged and condensed the XBRL schema and formula linkbase into a single pseudo-schema that lists the items for both input data and calculated data (with formulas). The simplified instance document has the period as the only XBRL context.

The work was originally done using XSLT 1.0 but I have moved it to XSLT 2.0 to exploit the support in XSLT 2.0 for XPath 2.0 sequences, unrestricted data structures, and Regular Expressions. References to XSLT functions should be understood to mean a function in XSLT2.0, or a template in XSLT 1.0 (or 2.0), or a function in XQuery 1.0.

Creating XSLT from Formulas
In terms of files with self-explanatory names, the components needed to create XSLT functions from formulas in a schema are as follows. Example files are listed in the source code and will be discussed later, but first we will introduce their roles.

  • Schema.xml defines the structure of the financial statement in terms of input items and calculated items. A calculated item contains a formula used for the calculation; the formula refers to other items (input or calculated) in the schema.
  • Instance.xml is where data is assigned to the input items defined in schema.xml; the data for an item is one or more values, each with a context (period). Instance.xml also contains the contexts.
  • Compiler.xslt is hand coded and transforms the formulas in schema.xml into an XSLT file, functions.xslt, where each formula becomes an equivalent XSLT function. The "compiler" analogy refers to the analysis of schema.xml and the generation of equivalent callable XSLT functions. Each distinct schema.xml will be compiled to a distinct equivalent functions.xslt file.
To apply the formulas, the end user needs schema.xml to create a compatible instance.xml, and functions.xslt, whose functions they will call from their own XSLT. In the source code, host.xslt shows how the functions in functions.xslt are used.

The interactions of these components are shown in Figure 1, which emphasizes the two distinct roles of XSLT in the whole process: as a compiler to create functions.xslt, and for numeric computations when using functions.xslt. The compilation must be re-run after any change to a formula and is unlikely to be time-critical; but the numeric computations, which may be run in a browser, desktop, or server application, should be as efficient as possible.

Case Study: Simplified Use of Computational XSLT 2.0
The simplification is that missing (null) data should be treated as having a value of zero. The file schema.xml (Listing 1) has three input and four calculated items. When transformed to functions.xslt (Listing 2), a calculated item becomes a <xsl:function> element with the same name as the item. In functions.xslt the namespace prefix formula is used for these auto-generated formula-derived functions to distinguish them from the fixed helper functions (namespace helper) they call (see below). The input data in instance.xml (Listing 3) is assumed to be for a single company.

The structure of a formula function in functions.xslt is simple: it has one parameter, the context_id, which is simply a reference to the period of the statement being evaluated from instance.xml. It contains an XSLT variable for each distinct argument in the item's formula, and it returns the formula, evaluated as written. For example, formula:F10 is the formula function for:


<item id="F10" formula="$F1 + $F2" type="calc"/>
and formula:F10 contains variables $F1 and $F2, created like this:

<xsl:variable name="F1" select="helper:get_input_value
( 'F1', $context_id)" as="xs:double"/>
and it returns:

<xsl:sequence select="$F1 + $F2"/>

More Stories By Edmund Gimzewski

Edmund Gimzewski has 15 years of experience in developing software for the financial sector and has been working with XML since its inception. In the last five years he has specialized in XML-centric systems for general software development and for defining and applying financial and other calculations.
Edmund formerly worked as a scientist researching in the field of thermodynamics and has published nearly a dozen papers on thermodynamics (see Thermochimica Acta).

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


@ThingsExpo Stories
Bert Loomis was a visionary. This general session will highlight how Bert Loomis and people like him inspire us to build great things with small inventions. In their general session at 19th Cloud Expo, Harold Hannon, Architect at IBM Bluemix, and Michael O'Neill, Strategic Business Development at Nvidia, discussed the accelerating pace of AI development and how IBM Cloud and NVIDIA are partnering to bring AI capabilities to "every day," on-demand. They also reviewed two "free infrastructure" pr...
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
Data is an unusual currency; it is not restricted by the same transactional limitations as money or people. In fact, the more that you leverage your data across multiple business use cases, the more valuable it becomes to the organization. And the same can be said about the organization’s analytics. In his session at 19th Cloud Expo, Bill Schmarzo, CTO for the Big Data Practice at Dell EMC, introduced a methodology for capturing, enriching and sharing data (and analytics) across the organization...
The explosion of new web/cloud/IoT-based applications and the data they generate are transforming our world right before our eyes. In this rush to adopt these new technologies, organizations are often ignoring fundamental questions concerning who owns the data and failing to ask for permission to conduct invasive surveillance of their customers. Organizations that are not transparent about how their systems gather data telemetry without offering shared data ownership risk product rejection, regu...
Grape Up is a software company, specialized in cloud native application development and professional services related to Cloud Foundry PaaS. With five expert teams that operate in various sectors of the market across the USA and Europe, we work with a variety of customers from emerging startups to Fortune 1000 companies.
Financial Technology has become a topic of intense interest throughout the cloud developer and enterprise IT communities. Accordingly, attendees at the upcoming 20th Cloud Expo at the Javits Center in New York, June 6-8, 2017, will find fresh new content in a new track called FinTech.
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 20th Cloud Expo, which will take place on June 6-8, 2017 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 add...
Multiple data types are pouring into IoT deployments. Data is coming in small packages as well as enormous files and data streams of many sizes. Widespread use of mobile devices adds to the total. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will look at the tools and environments that are being put to use in IoT deployments, as well as the team skills a modern enterprise IT shop needs to keep things running, get a handle on all this data, and deli...
The age of Digital Disruption is evolving into the next era – Digital Cohesion, an age in which applications securely self-assemble and deliver predictive services that continuously adapt to user behavior. Information from devices, sensors and applications around us will drive services seamlessly across mobile and fixed devices/infrastructure. This evolution is happening now in software defined services and secure networking. Four key drivers – Performance, Economics, Interoperability and Trust ...
The Internet of Things is clearly many things: data collection and analytics, wearables, Smart Grids and Smart Cities, the Industrial Internet, and more. Cool platforms like Arduino, Raspberry Pi, Intel's Galileo and Edison, and a diverse world of sensors are making the IoT a great toy box for developers in all these areas. In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists discussed what things are the most important, which will have the most profound e...
@ThingsExpo has been named the Most Influential ‘Smart Cities - IIoT' Account and @BigDataExpo has been named fourteenth by Right Relevance (RR), which provides curated information and intelligence on approximately 50,000 topics. In addition, Right Relevance provides an Insights offering that combines the above Topics and Influencers information with real time conversations to provide actionable intelligence with visualizations to enable decision making. The Insights service is applicable to eve...
SYS-CON Events announced today that Grape Up will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct. 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Grape Up is a software company specializing in cloud native application development and professional services related to Cloud Foundry PaaS. With five expert teams that operate in various sectors of the market across the U.S. and Europe, Grape Up works with a variety of customers from emergi...
SYS-CON Events announced today that Hitachi, the leading provider the Internet of Things and Digital Transformation, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Hitachi Data Systems, a wholly owned subsidiary of Hitachi, Ltd., offers an integrated portfolio of services and solutions that enable digital transformation through enhanced data management, governance, mobility and analytics. We help globa...
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
20th Cloud Expo, taking place June 6-8, 2017, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy.
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in compute, storage and networking technologies, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology, is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/...
Amazon has gradually rolled out parts of its IoT offerings in the last year, but these are just the tip of the iceberg. In addition to optimizing their back-end AWS offerings, Amazon is laying the ground work to be a major force in IoT – especially in the connected home and office. Amazon is extending its reach by building on its dominant Cloud IoT platform, its Dash Button strategy, recently announced Replenishment Services, the Echo/Alexa voice recognition control platform, the 6-7 strategic...
Judith Hurwitz is president and CEO of Hurwitz & Associates, a Needham, Mass., research and consulting firm focused on emerging technology, including big data, cognitive computing and governance. She is co-author of the book Cognitive Computing and Big Data Analytics, published in 2015. Her Cloud Expo session, "What Is the Business Imperative for Cognitive Computing?" is scheduled for Wednesday, June 8, at 8:40 a.m. In it, she puts cognitive computing into perspective with its value to the busin...
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
Cybersecurity is a critical component of software development in many industries including medical devices. However, code is not always written to be robust or secure from the unknown or the unexpected. This gap can make medical devices susceptible to cybersecurity attacks ranging from compromised personal health information to life-sustaining treatment. In his session at @ThingsExpo, Clark Fortney, Software Engineer at Battelle, will discuss how programming oversight using key methods can incre...