- What is ESEF?
ESEF is short for European Single Electronic Format and is an XHTML version of the Annual Financial Report that replaces the PDF version that today is filed to the national database that stores all the regulatory information of a listed company (also called OAM, Officially Appointed Mechanism). A list of the OAM’s is available on ESMA’s webpage.
- What is the purpose of ESEF?
“A harmonised electronic format for reporting would be very beneficial for issuers, investors and competent authorities, since it would make reporting easier and facilitate accessibility, analysis and comparability of annual financial reports.” Quoted from the Transparency directive. Source: Recital (26) of Directive 2004/109/EC as revised by Directive 2013/50/EU
- When does ESEF come into effect?
ESEF will come into effect on January 1, 2020, thus affecting the filing of the Annual Financial Report for the fiscal year 2020, or the fiscal year closest to that date.
- What companies are affected?
All companies with securities admitted to trading on a regulated market within the EU must comply with ESEF. Examples of securities are shares, bonds and warrants. A list of regulated markets can be found on ESMA’s webpage.
- What are the technical implications for those companies?
– Companies that fulfill the criteria under bullet 3 (above) shall prepare their Annual Financial Report in XHTML.
– Annual financial reports containing consolidated IFRS Financial statements shall be marked up using XBRL tags. It is the Primary financial statements that shall be marked:
– Statement of financial position
– Statement of profit and loss and other comprehensive income
– Statement of changes in equity
– Statement of cash flows
– The XBRL tags shall be embedded in the XHTML document using Inline XBRL (iXBRL).
(See bullet 8 for more information about XBRL, ESEF Taxonomy and XHTML.)
- What does the Finance/Accounting function at those companies need to do?
The major task for the finance/accounting teams are to map the financial statements to the IFRS taxonomy (see bullet 8). That means choosing what XBRL tags to use for each line item in the financial statements. To listen to a presentation about mapping see “Vägen till ESEF – den 22 maj 2019” and Åsa Dössing’s presentation about her experiences from tagging according to IFRS for SEC filing and how it relates to ESEF.
- How does CtrlPrint’s solution for ESEF work?
CtrlPrint’s ESEF solution uses an InDesign document as data source. The tags are applied directly in to an XHTML version of the document using a tagging tool. The tags and the XHTML document are handled on the CtrlPrint ISO 27001:2013 certified cloud platform and no emailing of documents are necessary.
With CtrlPrint’s tagger the tags can be applied without having any year end numbers available. This means that the tagging can be started early in the process. This simplifies the mapping and makes the entire process flexible. The tags can also be applied by someone external of the company, if the competence is outsourced.
All documents and tags can be reused for upcoming annual reports and there is no need to reapply any old tags. If adjustments are necessary depending on updates if the taxonomy, that tagging can be applied early in the process as well.
- What is the ESEF taxonomy, XBRL and XHTML?
A taxonomy is a classification system used to identify and structure information. The ESEF taxonomy is based on the IFRS taxonomy, which is prepared by the IFRS Foundation. The IFRS taxonomy lists and defines the specific elements that preparers can use to identify (tag) the information disclosed within IFRS financial statements. IFRS taxonomy elements are obtained from (1) IFRS Standards and (2) common reporting practice. The ESEF taxonomy adds guidance concepts, labels in all EU languages and functions for anchoring issuers’ extensions.
- Does the CtrlPrint tagger support extensions and anchoring?
Yes, the CtrlPrint tagger supports both extensions of the ESEF taxonomy and anchoring of those extensions in the IFRS Taxonomy.
- Does the tagger have a Auto tagger?
Yes, the CtrlPrint tagger has an Auto tagger, which makes it easy to apply the IFRS base taxonomy.
- What does XHTML, XBRL and iXBRL mean?XHTML (eXtensible HyperText Markup Language) is almost the same as HTML. It is used for ESEF for the reports to be readable both by humans (HTML) and computers (XBRL).
XBRL (eXtensible Business Reporting Language) is a freely available and global framework for exchanging business information. XBRL allows the expression of semantic meaning commonly required in business reporting.
iXBRL (Inline XBRL) is a development of XBRL in which the XBRL metadata are embedded in an HTML document, e.g., a published report and accounts.