The journey to ESEF compliance
The European Single Electronic Format – ESEF for short – will soon be coming into play for companies with financial years starting on or after 1 January 2021, with publication from 1 January 2022. What does this mean for you?
What is ESEF?
ESEF, an electronic reporting format, was introduced to provide more structure to the financial data of companies across the European Union. Even though the United Kingdom has left the EU, this still applies to UK-listed companies, and will be a requirement from early 2022.
ESEF utilises XBRL (eXtensible Business Reporting Language) to label or tag information using published taxonomies to ensure that the data provided is not only human readable but also that it can be easily read and interpreted by machines. Publishing in the XHTML format provides opportunities to compare, catalogue and give access to data with greater transparency in comparison to PDFs.
How does this impact you?
2022 will be the first year that companies are required to report in this format, and will undoubtedly be a year in which everyone gets to grips with the new requirements. In the first year of reporting, you will need to look at just tagging the financial statements. The following year, this tagging will extend to including the notes to the financial statements. It’s likely this will extend to other areas of the report in the future, although this is not laid out yet. The report will then need to be housed in the National Storage Mechanism.
The next steps
Our focus remains on making business understandable, with our main goal of ensuring a great solution for our clients. The challenge of course is to marry the technical expertise required to implement the tags with as little disruption to the reporting workflow.
If you’re looking for help as you get to grips with these new requirements, or would just like further information, please get in touch.