Beginning with the financial year of 2020, all companies listed on EU regulated markets are required to prepare their annual financial reports in the ESEF format.
The European Securities and Markets Authority commonly referred to as ESMA, has put forth a list of ESEF reporting requirements which each report must live up to in order to be compliant.
For fiscal years starting on or after January 1, 2022, there is a requirement that the notes of your annual financial report are marked-up as a whole. This is usually referred to as block tagging.
How to Block Tag Notes to The Consolidated Financial Statements
Below you find a description of the requirements set forth by ESMA in the Reporting Technical Standards (RTS) on ESEF which were included in the Final Report on the RTS on ESEF:
- All annual financial reports (AFRs) must be prepared in XHTML, be human readable and capable of being opened with any standard web browser.
- AFRs containing consolidated statements in accordance with International Financial Reporting Standards (IFRS) must be labelled with XBRL tags, which make the disclosures in question machine-readable. It includes the Primary financial statements and the Notes to the Financial Statements (All the mandatory elements stated by ESMA RTS)
- The consolidated financial statements need to contain XBRL tags embedded within the XHTML file in the iXBRL format in order to combine the benefits of XBRL tagged data with the visual presentation of AFRs.
- Financial information must be structured by following a set of rules and orders specified in the ESEF taxonomy. The taxonomy used for ESEF is an extension of the IFRS taxonomy.
- Preparers of the files need to mark-up disclosures using the taxonomy element with the accounting meaning closest to the marked up disclosure. If the closest taxonomy element misrepresents the meaning, the issuer needs to create a taxonomy element titled an "extension" and anchor the extension to the core taxonomy element.
- When producing an XHTML file for submission, issuers must mark up in detail the primary financial statements, such as income statement, balance sheet, statement of cash flows and statement of changes in equity.
You can learn more about the ESEF Requirements by visiting parseport.com.