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 (ESMA), has put forth a list of ESEF reporting requirements that must be met in order to be compliant.
For fiscal years starting on or after January 1, 2022, companies are also required to mark up the notes to the annual financial report. This is usually referred to as block tagging, or block note tagging.
Here are the main ESEF requirements set forth by ESMA in the Reporting Technical Standards (RTS):
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 labeled 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.
Accounting policies and notes to the financial statements should be marked up using iXBRL, this is called block tagging.
For more detailed information, please visit this link: ESEF Requirements & the ESMA Mandate: What You Need to Know