Are you an issuer with securities listed on an EU regulated market? Then, beginning in 2020, it is mandatory to make all your annual financial reports ESEF compliant. Which means, the financial reports must be prepared in xHTML and the IFRS consolidated financial statements contained therein is marked up using XBRL tags and the iXBRL technology(inline XBRL).
What is ESEF?
The European Single Electronic Format (ESEF) is the electronic reporting format introduced by the European Securities and Markets Authority (ESMA) in which all issuers, with securities listed on EU regulated market, are required to submit their financial reports starting from 1st Jan 2020. The ESEF taxonomy is basically an extension of the IFRS taxonomy. The aim of introducing ESEF is to make reporting easier, enhance the transparency, accessibility, and enable an analysis of annual financial reports easily in Europe.
What will happen now because of ESEF roll-out?
What does this mean for professionals who prepare financial statements?
As preparers of financial statements, you will have to familiarize yourself with the ESEF taxonomy and ESEF compliance suit as released by ESMA. You also have to prepare IFRS compliant annual financial reports and either A) convert them into xHTML format or B)prepare them directly in xHTML format so that they can be viewed in any standard web browser. Wherever Annual reports contain IFRS consolidated financial statements, you will have to augment this information with inline XBRL tagged information related to ESEF. Thiswill result in a single report that provides both human-readable and structured, machine-readable data which is compliant for ESMA.
Sounds complicated? Here are some ways in which you can easily ensure ESEF compliance
- Using in-house team: If you have a team which is experienced with the IFRS taxonomy, you can train them on ESEF taxonomy, the reporting, tagging, validation, formatting etc. and prepare iXBRL documents in house. If you go with this option, then make sure you have adequate amount of time and resources as it can be relatively complex.
- Using XBRL trainers and consultants: If you are tight on resources and time, or you lack the expertise, then you can hire XBRL trainers and consultants. There are a lot of firms in the market which provide end-to-end training and consultancy. This can save you a lot of time and effort and enable you to focus on things that matter the most for your business.
- Using software tools to accelerate the process and make life easy: This might be one of the best ways to get started. There are several providers in the market who can provide you with desktop, cloud, API solutions which can easily integrate with your system and convert your files in iXBRL format.
Thinking of getting some help for being ESEF compliant or for iXBRL document creation?
At Semansys we have been helping clients with their financial reporting and business monitoring needs based on semantics and XBRL for the past two decades. We have unique desktop, cloud and API solutions which can help you with iXBRL creation. Please drop us an email on firstname.lastname@example.org for more information.