XBRL® uses taxonomies—dictionaries of concepts—to specify the tags that preparers will need to use to mark up financial statements. The ESEF taxonomy is primarily based on the taxonomy produced for IFRS financial reporting by the IFRS Foundation and is commonly referred to as the IFRS Taxonomy.

Alongside this base set of taxonomy elements, preparers are also required to use their own elements in any areas where the IFRS Taxonomy does not cover their disclosures. This set of company-specific elements also forms a taxonomy in itself.

While managing a number of taxonomies may sound like a challenging requirement, teams should not be concerned, as software is able to address and automate the technical details of the process.