Ask the expert: ESEF / XBRL reporting

Implementing ESEF

Q What is ESEF and what does it mean?

A The European Securities and Markets Authority (ESMA), the EU securities market regulator, has developed the European single electronic format (ESEF) reporting rule, which requires, starting in 2020, all issuers listed on an EU-regulated market to prepare their annual financial reports in XHTML and mark up the IFRS consolidated financial statements within, using XBRL tags and the inline XBRL (iXBRL) technology.

What this means for you is that your organisation’s income statement and statement of comprehensive income, balance sheet, cash flow statement, and statement of changes in equity are to be tagged in iXBRL using the business-specific taxonomy, as part of your annual report. This regulatory requirement started on 1 January 2020 and applies to the fiscal years closest to this date.

Q What advice would you give to corporates that have yet to decide on how they will meet the ESEF requirements?

A There are many considerations when choosing the right solution. Some are more important than others. Here are questions that might help: What delivers the solution in terms of output and process? How fast are you going? How can content owners, reviewers, and auditors work together? What level of information is supplied? What validations and verifications are carried out? How do you handle the different language versions of the annual report? Can you re-use the tagging for next year’s report? What support and training are included? When is the solution available for use?

Q How will this affect the workflow of the corporate project team?

A The available solutions fall into three categories — built-in solution, bolt-on solution, or an external third party to apply tags on your behalf. Whichever you choose, security, version control, and timeliness are important factors.

With a built-in solution, you do not use it just for ESEF; it is used for other internal reporting challenges. With a bolt-on solution (CtrlPrint), you want to do the tagging and everything related to ESEF internally without any system upgrades. With third-party solutions, you give all the authority to tag to an external consultant.

Whichever route you choose, make sure information remains within a secure environment with easy access to all versions. It is also worth investigating whether it tracks your changes, helping to provide a robust audit trail and version comparison, and whether tags can be rolled over year to year. Good luck with your journey to ESEF. If you have any questions, I am happy to give you the best advice I can.

For more information, visit our website at https://web.ctrlprint.net/esef or call us at +44 203 630 0133.

Ann Marie Fagan leads CtrlPrint in the UK, developing strategic partnerships and business relationships with reporting organisations and listed companies. She has over 20 years’ experience in the corporate reporting field, having previously worked in the Regulatory News Service (RNS) at the London Stock Exchange, where she played an important role in supporting issuers including the development of the RNS reporting tool.

CtrlPrint is a collaboration tool for the creation of financial reports produced using InDesign and InCopy. CtrlPrint allows you to save lots of time and work efficiently with your colleagues and partners. We also have an ESEF reporting solution (XHTML and iXBRL for InDesign documents).

web.ctrlprint.net/contact/ and +44 203 630 0133