CEO
The European Single Electronic Format (ESEF) and FRC UK equivalent (UKSEF) are used by companies listed on EU and UK exchanges for their annual financial report. To meet regulatory reporting requirements, companies need to convert their annual report to the ESEF/UKSEF format, tag the figures in the primary financial statements and block tag the notes. Upcoming legislation will likely bring additional tagging for ESG disclosures. In this blog, we deep dive into what iXBRL reporting means and how the new mandatory block tagging requirements are adding to the complexity for firms.
What is the Inline XBRL format?
From 2020, the European Securities Markets and Authority (ESMA) requires all issuers on EU-regulated markets to prepare annual reports in Inline XBRL (iXBRL) format. Inline XBRL is XBRL that is embedded in HTML. All listed companies must report in XHTML format. IFRS financial statements must be reported with the IFRS taxonomy in iXBRL format.
Mandatory Block Tagging for ESEF Submissions
The European Securities and Markets Authority’s (ESMA) European Single Electronic Format (ESEF) reporting manual was released in the autumn of this year. The main change is that ‘block-tagging’ creates extra tagging expectations on filers. Now complying with the ESMA mandate is more complex than ever before, there can be difficulties tagging and reviews have proved time-intensive; as a result, many firms are reassessing their annual reporting processes.Block-tagging is the tagging of policies and notes. Block tagging is now mandatory for any submissions with a reporting period after January 1, 2022. From 2022 notes must be tagged and contain a ‘text box’ tag. Tagging of notes means one has to identify all report sections aligned with the taxonomy which in turn increases the challenge and makes multi-tagging difficult. Each numerical value does not need to be tagged as ESMA permits the tagging of whole notes. The same level of granular tagging will not apply to information in tables.
UKSEF 2022 taxonomy v.2.0.0
The UK Single Electronic Format (UKSEF), is a taxonomy which is based on the IFRS taxonomy and an extension of the ESEF taxonomy. The UK’s new Streamlined Energy and Carbon Reporting (SECR) requirement further integrates inline XBRL-based carbon disclosures with financial reporting.From 2023 onwards mandatory electronic format reporting requirements applies to in-scope issuers preparing consolidated financial statements in line with IFRS and they must also tag notes to the annual financial statements. From January 2023 UKSEF is no longer a voluntary requirement. Companies may choose either ESEF or UKSEF to tag their Annual Financial Reports (AFRs). In May of this year, the FCA switched from UKSEF 2022 taxonomy v.1.0.0 to v.2.0.0.
Next steps
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