ESEF at a Glance

When: Reports starting 1 January 2020

What: The European Single Electronic Format (“ESEF”) for the Annual Report (management narrative and financial statements) - same report, same reporting timeline, new format.

Format: Complete report in XHTML with XBRL® (inline to create iXBRL®) of the main financial statements and 10 nonfinancial reporting tags

Filing: File with your local regulator in XHTML and on a public website

Future: Tagging scope will increase in 2022 to include block tagging

ESEF and the EU at a Glance

Countries: All countries in the European Union

Listed: All companies listed on EU regulated markets

XHTML: All these companies need to file in XHTML

iXBRL: Those with consolidated statements have to add Inline XBRL to their XHTML financial statements

When: For financial statements starting 1 January 2020

More About ESEF

Overview
The European Single Electronic Format (ESEF) is a new regulation being specified by the European Securities and Markets Authority (ESMA), mandating that all issuers on European Union regulated markets use a single electronic reporting data format in preparing their annual financial reports.

This new rule will make E.U. issuers’ annual financial reports machine-readable and discoverable.

Key Drivers
ESMA was set the objective to deliver greater transparency for the investor to improve accessibility, comparability and analysis (2004 Transparency Directive). XHTML and inline XBRL was chosen as the format to deliver reports because they are human and machine-readable and using the IFRS Taxonomy makes them comparable. The requirement companies have to follow is more exactly described in the European Single Electronic Format.

Who is Responsible:
he directors of the company continue to be responsible for the content of the report and will obtain an opinion from an external auditor before publication and submission to the regulator. The ESMA Mandate will be “transposed” into law as an additional reporting obligation at the national level (e.g. Germany has already done this).

In November 2019, the Committee of European Auditing Oversight Bodies (CEAOB) released guidelines they felt auditors, standard setters and national oversight bodies would benefit from. The guidelines put the provisions of the ESMA mandate into context and provide a framework for how the external assurance of the ESEF report may be carried out, and the relationship to the full audit opinion.

Read more about the CEAOB guidelines here.

Requirements

• Companies' annual financial reports will include iXBRL within the XHTML
  - All public companies regulated by ESMA must submit an annual financial report in XHTML for regulatory purposes
  - All public companies who prepare consolidated IFRS financial statements will need to provide the financial statements with in Inline XBRL® (iXBRL) in the XHTML report
• Companies will need to submit the report using the new ESEF to their local regulator

Timing
This mandate goes into effect from 1 Jan 2020, and first ESEF reports will be submitted in 2021.

Additional Resources

• ESMA and ESEF
• workiva.com/ESEF
• ESEF Reporting Datasheet
• ESEF Readiness Kit
• CEAOB Guidelines Blog

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