Base and Extension Ledger Architecture for Financial Data
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Solution Overview
Problem
Conventional financial software systems require separate ledgers for different accounting principles, leading to increased costs and memory footprint due to redundant data storage, and complex reconciliation processes.
Innovation Solution
Implementing a Base ledger with overlying Extension ledgers, using a mapping table to store generic financial data in the Base ledger and specific data in the Extension ledger, reducing redundancy and memory usage, and allowing data to be read through combined dataviews.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If separate ledgers are created for different accounting principles, then accounting requirements can be fulfilled, but memory footprint increases and data redundancy occurs
Solution Approach 1:
The ledger is segmented into a Base ledger containing generic financial data and multiple Extension ledgers containing accounting principle-specific data. This segmentation allows different accounting principles to be supported without duplicating entire ledgers, as each Extension ledger only stores the differences from the Base ledger.
Solution Approach 2:
The Extension ledgers are nested over the Base ledger, with each Extension ledger building upon the Base ledger structure. This nesting approach allows hierarchical organization of data where generic data is stored once in the Base ledger and specific variations are layered on top in Extension ledgers, reducing overall data redundancy.
2Adaptability or versatility
If separate ledgers are created for different accounting principles, then accounting requirements can be fulfilled, but reconciliation complexity increases
Solution Approach 1:
The Base ledger and Extension ledgers are merged into a unified ledger structure where data is automatically reconciled through the inheritance relationship. The system combines generic data from the Base ledger with specific data from Extension ledgers to form complete financial records, eliminating the need for manual reconciliation between separate ledgers.
Solution Approach 2:
The Base ledger serves as a universal foundation that supports multiple accounting principles through its Extension ledgers. This universal structure allows a single Base ledger to serve multiple purposes across different accounting regimes, reducing the need for separate reconciliation processes for each principle.
3Adaptability or versatility
If separate ledgers are created for different accounting principles, then accounting requirements can be fulfilled, but software cost increases
Solution Approach 1:
The Base ledger is designed as a universal structure that can support multiple accounting principles through its Extension ledgers. This multi-functional design allows a single software system to handle various accounting requirements without requiring separate software instances, thereby reducing overall software costs.
Solution Approach 2:
By merging multiple accounting principle ledgers into a unified Base+Extension structure, the system reduces the total number of ledgers that need to be maintained and processed. This consolidation lowers software costs by reducing data processing overhead, memory requirements, and system complexity.
Data Source
AI summary
A system stores financial accounting data in a Base ledger, together with overlying extension ledger(s). An engine receives both generic financial data, and financial data utilized for specific purposes. Utilizing a mapping table the engine stores in an underlying Base ledger, the generic financial data (e.g., a fixed asset acquisition). The engine stores in overlying extension ledgers, specific financial data (e.g., a linear asset depreciation and/or an declining balance method of asset depreciation) derived from that generic data. This reduces memory footprint by persisting the generic data in one location only. The stored data may be read utilizing dataviews combining data from Base and extension ledgers. A recursive algorithm may evaluate chain(s) of ledgers. Embodiments may be particularly suited to store in the Base ledger generic financial data common to multiple accounting principles (e.g., GAAP, IFRS), and store in extension ledger(s) the associated financial data specific to those accounting schemes.