Among models and information about economic phenomena which help to understand how enterprises pr... more Among models and information about economic phenomena which help to understand how enterprises produce value, Accounting and Financial Reporting still play a leading and regulative role. The regulative role is established by enforceable International Financial Reporting Standards (IFRS). Ontology engineering methods, which have proven to cope with difficult standardization issues, are seldom used in developing the abovementioned standards. Furthermore, the standard setting should more increasingly account for the influence of advanced information technologies for capturing and reporting financial information, such as [blockchain-based] shared ledgers and data analytics. This paper proposes an initial version of the Core Ontology of Financial Reporting Information Systems for a Shared Ledger Environment (COFRIS) grounded on the Unified Foundational Ontology (UFO) network, and a preliminary analysis of the IFRS.
Although the field of Accounting Information Systems (AIS) has a long tradition, there is still a... more Although the field of Accounting Information Systems (AIS) has a long tradition, there is still a lack of a widely adopted conceptualization. In this paper, The UFO ontology patterns are regarded for application by analogy and extension in the engineering of a core ontology for AIS. The new IASB Conceptual Framework for Financial Reporting is used as a main source of the domain knowledge, and a core ontology for AIS is proposed that includes (offered, agreed, partial, settlement and realization) economic exchange patterns of an enterprise. The economic exchanges affect enterprise economic resources and claims that are represented by economic relator patterns including offerings, agreements, (unconditional, in process and residual) obligations and property rights. The model is an important step towards the development of a Core ontology and Ontology Pattern Language for AIS.
Definitions of economic resources and assets in financial reporting and different enterprise info... more Definitions of economic resources and assets in financial reporting and different enterprise information system frameworks are analyzed. A conceptual model of economic resources and assets, grounded on UFO foundational ontology, is introduced. Some improvements of the conceptual framework for financial reporting are suggested.
Enterprises operate in markets by building and realizing exchange relationships. Currently, accou... more Enterprises operate in markets by building and realizing exchange relationships. Currently, accounting information systems are organized in an enterprise-specific way. We introduce a Market Information System perspective on top of Exchange (Shared Ledger) and Enterprise-Specific perspectives. The two latter developed earlier, are enhanced and their interplay with the Market perspective is elaborated. This paper presents a summary of this model and discusses some of its practical implications, and potential reporting quality improvements.
The Core Ontology for Financial Reporting Information Systems (COFRIS) is grounded on Unified Fou... more The Core Ontology for Financial Reporting Information Systems (COFRIS) is grounded on Unified Foundational Ontology (UFO). In this paper, we build on COFRIS and attempt to detail the concepts of Economic Resources and Claims found in accounting frameworks, and to extract their features which are common to accounting and reporting standards. Economic Resources (Claims) are conceptualized as extensions of Complex Social and Legal Relators of UFO, within the consensual transaction-centric model. The application of this conceptualization and COFRIS in general aims to assist with standard-setting and the development of information systems, to facilitate understandability and reuse. The conceptualization is illustrated by examples presented in an ontology-inspired Event Table and is used to analyze the revised IASB® Conceptual Framework for Financial Reporting.
Blockchain and Smart Contract technology suggests a new way to implement the Accounting Informati... more Blockchain and Smart Contract technology suggests a new way to implement the Accounting Information System (AIS), and for setting the Accounting Standards. How exactly this can be done and what are limitations is still very much an open question. After reviewing the current literature our conclusion is that an ontologically sound consensus-based design is missing to date. Against this research gap, the paper introduces a blockchain-based shared ledger conceptual solution, regulated by Financial Reporting Standards. It is shown how consensual and participant-specific parts of the business exchange transaction can be represented in a concise way.
Anchoring the AIS in a well-defined ontology enhances an integrated approach and efficient implem... more Anchoring the AIS in a well-defined ontology enhances an integrated approach and efficient implementation. This presupposes that the ontology chosen as a base is well-suited for domains such as business models and accounting systems. One alternative is to use a top level ontology which classifies the whole world, often starting with the abstract notion of a thing which encompasses everything [10]. So, for example, the upper level ontology of BFO is used by more than 130 ontology-driven endeavors throughout the world [15]. While top-level ontologies provide a general scope they have the drawback that they demand mappings between the top-level ontology and the domain at hand. A solution is to choose a core ontology aimed at describing/ prescribing domains such as business models and service systems [10].
Enterprises operate in markets by building and fulfilling exchange relationships. However, up to ... more Enterprises operate in markets by building and fulfilling exchange relationships. However, up to date accounting information systems are organized in an enterprise-specific way. We introduce the Market Information perspective on top of the Exchange (Shared Ledger) and Enterprise-Specific perspectives. The latter, developed earlier, are enhanced and the interplay with the Market perspective elaborated. First, we analyze how are Market related concepts of Offering, Contract, Resource, and Social Interaction represented in UFO ontologies and other ontologies. Second, we propose a Market perspective, and included Exchange, and Enterprise perspective conceptual model of a Shared Information System for Financial Reporting in OntoUML language, and third, we analyze the International Accounting Standards Board (IASB) Conceptual Framework and Standards for Financial Reporting to uncover construct deficit and overload in these Standards and Framework for usage in Shared Information Systems.
Among models and information about economic phenomena that help to understand how enterprises pro... more Among models and information about economic phenomena that help to understand how enterprises produce value, Accounting and Financial Reporting still play a leading and regulative role. The regulative role is established by enforceable International Financial Reporting (FR) Standards. Ontology engineering methods, which have proven to cope with difficult standardization issues, are seldom used in developing these standards. Furthermore, no widely accepted computational ontology, covering the concepts and relations of FR, and the Information Systems supporting FR, exists. This paper proposes an initial version of the Core Ontology of Financial Reporting Information Systems (COFRIS) grounded on the Unified Foundational Ontology (UFO).
This paper partially extends work originally presented in 20th IEEE International Enterprise Dist... more This paper partially extends work originally presented in 20th IEEE International Enterprise Distributed Object Computing Conference, EDOC 2016 [1]. In Accounting Information Systems (AIS) “transactional [economic exchange] data is collected and stored into meaningful information from which business decisions are made” [2]. The data of economic phenomena [material for an enterprise] is captured, classified and estimated, recognized and measured, and periodically disclosed and presented. AIS is a sub-system that contributes to the wider system of Financial Reporting. The Statements of Financial Reporting of an Enterprise are a related set; each articulates with the others, and all are derived from the same underlying data. Although the field of the AIS has a long tradition, scholars in [3] conclude the absence of a widely-adopted conceptualization. The Accounting and Financial Reporting (FR) and thus AIS domain may be characterized as a three-level hierarchy of models:
In conceptual modeling of economic, accounting and financial reporting (FR), supplychain and othe... more In conceptual modeling of economic, accounting and financial reporting (FR), supplychain and other enterprise architecture (EA) domains, the concepts of economic resources and assets, as well as their counterparts – claims and liabilities, play an important role. Analysis of different ontologies and standards show that their definitions are not consistent, and in addition, resources and assets are regarded as almost synonyms [12, 19]. The need for consistence and distinction increases in the network-based models, such as using DLT. Recent versions of international accounting standards [1] which involve the whole life of a contract can hardly be implemented by accounting departments alone. Accordingly, SAP’s developing software on revenue standards implementation [8] delegates a main part of recognition to the Sales (Purchase) department, but only measurement to the Accounting department. Thus, accounting needs to be interpreted in a wider than traditional sense and is an important p...
In the last decade, several UFO-grounded economic exchange ontologies have been developed, notabl... more In the last decade, several UFO-grounded economic exchange ontologies have been developed, notably COFRIS, OntoREA, REA, and ATE. We think it is time that a next step is made into the direction of the corporate reporting standard setters, for which an ontological approach is of high potential value. In this paper, we first define requirements for exchange conceptualization and present the latest developments in COFRIS a core ontology for financial reporting information systems, focusing on contracts within the new versions of the UFOB theories and the OntoUML tool. Then we compare it with the conceptual framework and standards for accounting and financial reporting and discuss COFRIS against other UFO grounded exchange and contract ontologies.
DLT suggests a new way to implement the Accounting Information System, but after reviewing the cu... more DLT suggests a new way to implement the Accounting Information System, but after reviewing the current literature our conclusion is that an ontologically sound consensus-based design is missing to date. Against this research gap, the paper introduces a DLT-based shared ledger solution in a formal way and compliant with Financial Reporting Standards. We build on the COFRIS accounting ontology (grounded in UFO-S) and the blockchain ontology developed by De Kruijff & Weigand that distinguishes between a Datalogical level, an Infological and an Essential (conceptual) level. It is shown how consensual and agent-specific parts of the business exchange transaction can be represented in a concise way, and how this pattern can be implemented using Smart Contracts.
Abstract Distributed Ledger Technology (DLT) suggests a new way to implement Accounting Informati... more Abstract Distributed Ledger Technology (DLT) suggests a new way to implement Accounting Information Systems, but an ontologically sound consensus-based design is missing to date. Against this research gap, the paper introduces a DLT-based shared ledger solution in a formal way and compliant with Financial Reporting Standards. We build on the COFRIS accounting ontology (grounded on UFO) and the blockchain ontology developed by De Kruijff & Weigand that distinguishes between a Datalogical level, an Infological and an Essential (conceptual) level. It is shown how both consensual and enterprise-specific parts of the business exchange transaction can be represented in a concise way, and how this pattern can be implemented using Smart Contracts. It is argued that the proposed Shared Ledger Accounting system increases the quality of the contents from an accounting perspective as well as the quality of the system in terms of auditability and interoperability.
Enterprises collaborate in government-regulated markets by developing and realizing exchange rela... more Enterprises collaborate in government-regulated markets by developing and realizing exchange relationships. However, current Accounting Information Systems (AIS) are organized in an enterprise-centric way. We introduce the Multilateral AIS (MAIS) perspective on top of the Bilateral (Shared Ledger) and Unilateral Enterprise-Specific perspectives for Corporate Reporting. We reconsider our previous conceptualization in the OntoUML language of the Economic Exchange lifecycle in Bilateral AIS from an Economic System and Market perspective. We identify requirements for existing accounting framework improvement in MAIS. An online platform case is provided as an illustration.
Among models and information about economic phenomena which help to understand how enterprises pr... more Among models and information about economic phenomena which help to understand how enterprises produce value, Accounting and Financial Reporting still play a leading and regulative role. The regulative role is established by enforceable International Financial Reporting Standards (IFRS). Ontology engineering methods, which have proven to cope with difficult standardization issues, are seldom used in developing the abovementioned standards. Furthermore, the standard setting should more increasingly account for the influence of advanced information technologies for capturing and reporting financial information, such as [blockchain-based] shared ledgers and data analytics. This paper proposes an initial version of the Core Ontology of Financial Reporting Information Systems for a Shared Ledger Environment (COFRIS) grounded on the Unified Foundational Ontology (UFO) network, and a preliminary analysis of the IFRS.
Although the field of Accounting Information Systems (AIS) has a long tradition, there is still a... more Although the field of Accounting Information Systems (AIS) has a long tradition, there is still a lack of a widely adopted conceptualization. In this paper, The UFO ontology patterns are regarded for application by analogy and extension in the engineering of a core ontology for AIS. The new IASB Conceptual Framework for Financial Reporting is used as a main source of the domain knowledge, and a core ontology for AIS is proposed that includes (offered, agreed, partial, settlement and realization) economic exchange patterns of an enterprise. The economic exchanges affect enterprise economic resources and claims that are represented by economic relator patterns including offerings, agreements, (unconditional, in process and residual) obligations and property rights. The model is an important step towards the development of a Core ontology and Ontology Pattern Language for AIS.
Definitions of economic resources and assets in financial reporting and different enterprise info... more Definitions of economic resources and assets in financial reporting and different enterprise information system frameworks are analyzed. A conceptual model of economic resources and assets, grounded on UFO foundational ontology, is introduced. Some improvements of the conceptual framework for financial reporting are suggested.
Enterprises operate in markets by building and realizing exchange relationships. Currently, accou... more Enterprises operate in markets by building and realizing exchange relationships. Currently, accounting information systems are organized in an enterprise-specific way. We introduce a Market Information System perspective on top of Exchange (Shared Ledger) and Enterprise-Specific perspectives. The two latter developed earlier, are enhanced and their interplay with the Market perspective is elaborated. This paper presents a summary of this model and discusses some of its practical implications, and potential reporting quality improvements.
The Core Ontology for Financial Reporting Information Systems (COFRIS) is grounded on Unified Fou... more The Core Ontology for Financial Reporting Information Systems (COFRIS) is grounded on Unified Foundational Ontology (UFO). In this paper, we build on COFRIS and attempt to detail the concepts of Economic Resources and Claims found in accounting frameworks, and to extract their features which are common to accounting and reporting standards. Economic Resources (Claims) are conceptualized as extensions of Complex Social and Legal Relators of UFO, within the consensual transaction-centric model. The application of this conceptualization and COFRIS in general aims to assist with standard-setting and the development of information systems, to facilitate understandability and reuse. The conceptualization is illustrated by examples presented in an ontology-inspired Event Table and is used to analyze the revised IASB® Conceptual Framework for Financial Reporting.
Blockchain and Smart Contract technology suggests a new way to implement the Accounting Informati... more Blockchain and Smart Contract technology suggests a new way to implement the Accounting Information System (AIS), and for setting the Accounting Standards. How exactly this can be done and what are limitations is still very much an open question. After reviewing the current literature our conclusion is that an ontologically sound consensus-based design is missing to date. Against this research gap, the paper introduces a blockchain-based shared ledger conceptual solution, regulated by Financial Reporting Standards. It is shown how consensual and participant-specific parts of the business exchange transaction can be represented in a concise way.
Anchoring the AIS in a well-defined ontology enhances an integrated approach and efficient implem... more Anchoring the AIS in a well-defined ontology enhances an integrated approach and efficient implementation. This presupposes that the ontology chosen as a base is well-suited for domains such as business models and accounting systems. One alternative is to use a top level ontology which classifies the whole world, often starting with the abstract notion of a thing which encompasses everything [10]. So, for example, the upper level ontology of BFO is used by more than 130 ontology-driven endeavors throughout the world [15]. While top-level ontologies provide a general scope they have the drawback that they demand mappings between the top-level ontology and the domain at hand. A solution is to choose a core ontology aimed at describing/ prescribing domains such as business models and service systems [10].
Enterprises operate in markets by building and fulfilling exchange relationships. However, up to ... more Enterprises operate in markets by building and fulfilling exchange relationships. However, up to date accounting information systems are organized in an enterprise-specific way. We introduce the Market Information perspective on top of the Exchange (Shared Ledger) and Enterprise-Specific perspectives. The latter, developed earlier, are enhanced and the interplay with the Market perspective elaborated. First, we analyze how are Market related concepts of Offering, Contract, Resource, and Social Interaction represented in UFO ontologies and other ontologies. Second, we propose a Market perspective, and included Exchange, and Enterprise perspective conceptual model of a Shared Information System for Financial Reporting in OntoUML language, and third, we analyze the International Accounting Standards Board (IASB) Conceptual Framework and Standards for Financial Reporting to uncover construct deficit and overload in these Standards and Framework for usage in Shared Information Systems.
Among models and information about economic phenomena that help to understand how enterprises pro... more Among models and information about economic phenomena that help to understand how enterprises produce value, Accounting and Financial Reporting still play a leading and regulative role. The regulative role is established by enforceable International Financial Reporting (FR) Standards. Ontology engineering methods, which have proven to cope with difficult standardization issues, are seldom used in developing these standards. Furthermore, no widely accepted computational ontology, covering the concepts and relations of FR, and the Information Systems supporting FR, exists. This paper proposes an initial version of the Core Ontology of Financial Reporting Information Systems (COFRIS) grounded on the Unified Foundational Ontology (UFO).
This paper partially extends work originally presented in 20th IEEE International Enterprise Dist... more This paper partially extends work originally presented in 20th IEEE International Enterprise Distributed Object Computing Conference, EDOC 2016 [1]. In Accounting Information Systems (AIS) “transactional [economic exchange] data is collected and stored into meaningful information from which business decisions are made” [2]. The data of economic phenomena [material for an enterprise] is captured, classified and estimated, recognized and measured, and periodically disclosed and presented. AIS is a sub-system that contributes to the wider system of Financial Reporting. The Statements of Financial Reporting of an Enterprise are a related set; each articulates with the others, and all are derived from the same underlying data. Although the field of the AIS has a long tradition, scholars in [3] conclude the absence of a widely-adopted conceptualization. The Accounting and Financial Reporting (FR) and thus AIS domain may be characterized as a three-level hierarchy of models:
In conceptual modeling of economic, accounting and financial reporting (FR), supplychain and othe... more In conceptual modeling of economic, accounting and financial reporting (FR), supplychain and other enterprise architecture (EA) domains, the concepts of economic resources and assets, as well as their counterparts – claims and liabilities, play an important role. Analysis of different ontologies and standards show that their definitions are not consistent, and in addition, resources and assets are regarded as almost synonyms [12, 19]. The need for consistence and distinction increases in the network-based models, such as using DLT. Recent versions of international accounting standards [1] which involve the whole life of a contract can hardly be implemented by accounting departments alone. Accordingly, SAP’s developing software on revenue standards implementation [8] delegates a main part of recognition to the Sales (Purchase) department, but only measurement to the Accounting department. Thus, accounting needs to be interpreted in a wider than traditional sense and is an important p...
In the last decade, several UFO-grounded economic exchange ontologies have been developed, notabl... more In the last decade, several UFO-grounded economic exchange ontologies have been developed, notably COFRIS, OntoREA, REA, and ATE. We think it is time that a next step is made into the direction of the corporate reporting standard setters, for which an ontological approach is of high potential value. In this paper, we first define requirements for exchange conceptualization and present the latest developments in COFRIS a core ontology for financial reporting information systems, focusing on contracts within the new versions of the UFOB theories and the OntoUML tool. Then we compare it with the conceptual framework and standards for accounting and financial reporting and discuss COFRIS against other UFO grounded exchange and contract ontologies.
DLT suggests a new way to implement the Accounting Information System, but after reviewing the cu... more DLT suggests a new way to implement the Accounting Information System, but after reviewing the current literature our conclusion is that an ontologically sound consensus-based design is missing to date. Against this research gap, the paper introduces a DLT-based shared ledger solution in a formal way and compliant with Financial Reporting Standards. We build on the COFRIS accounting ontology (grounded in UFO-S) and the blockchain ontology developed by De Kruijff & Weigand that distinguishes between a Datalogical level, an Infological and an Essential (conceptual) level. It is shown how consensual and agent-specific parts of the business exchange transaction can be represented in a concise way, and how this pattern can be implemented using Smart Contracts.
Abstract Distributed Ledger Technology (DLT) suggests a new way to implement Accounting Informati... more Abstract Distributed Ledger Technology (DLT) suggests a new way to implement Accounting Information Systems, but an ontologically sound consensus-based design is missing to date. Against this research gap, the paper introduces a DLT-based shared ledger solution in a formal way and compliant with Financial Reporting Standards. We build on the COFRIS accounting ontology (grounded on UFO) and the blockchain ontology developed by De Kruijff & Weigand that distinguishes between a Datalogical level, an Infological and an Essential (conceptual) level. It is shown how both consensual and enterprise-specific parts of the business exchange transaction can be represented in a concise way, and how this pattern can be implemented using Smart Contracts. It is argued that the proposed Shared Ledger Accounting system increases the quality of the contents from an accounting perspective as well as the quality of the system in terms of auditability and interoperability.
Enterprises collaborate in government-regulated markets by developing and realizing exchange rela... more Enterprises collaborate in government-regulated markets by developing and realizing exchange relationships. However, current Accounting Information Systems (AIS) are organized in an enterprise-centric way. We introduce the Multilateral AIS (MAIS) perspective on top of the Bilateral (Shared Ledger) and Unilateral Enterprise-Specific perspectives for Corporate Reporting. We reconsider our previous conceptualization in the OntoUML language of the Economic Exchange lifecycle in Bilateral AIS from an Economic System and Market perspective. We identify requirements for existing accounting framework improvement in MAIS. An online platform case is provided as an illustration.
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