The UK’s Financial Reporting Council (FRC) set out Tuesday practical guidance for companies to start producing their annual financial reports in a structured electronic format.
Companies trading on UK-regulated markets are required to start producing their annual financial reports in a structured electronic format for financial years starting on or after 1 January 2021. This is a requirement introduced by the Financial Conduct Authority as part of the UK implementation of a cross-EU initiative — the European Single Electronic Format, or ESEF.
The change only affects the format of the annual financial report — other obligations relating to the report are not affected, the FRC emphasised.
In its report, Structured Reporting: An Early Implementation Study, the FRC offers tips across three broad areas: process, usability and appearance, and tagging.
The FRC said companies and boards should ask themselves a series of questions on the three topics that include:
- Who is leading the project internally? Is extra training or resources needed?
- Will the structured report be prepared in-house or will it be outsourced?
- Will the structured report be prepared in addition to, or instead of, the traditional annual report in PDF?
- Who in the organisation has governance over the preparation of the report — is digital different from paper?
- Who will provide governance over the tagging decisions? Will it be the audit committee?
— Oliver Rowe (Oliver.Rowe@aicpa-cima.com) is an FM magazine senior editor.