The purpose behind ESEF is to make it easier to access, analyse and compare financial reporting through the use of machine-readable data (in the format of XHTML)
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Not a day goes by at the moment that I don’t hear mention of ESEF (the European Single Electronic Format), whether it’s reading one of the countless blogs (here’s another one for you!) and whitepapers, speaking to potential solutions providers, or talking to clients on the potential impact it will have on their reporting.
Everyone has something to say (or ask) on the changes on the horizon in preparation for the new filing requirements.
And, whilst there is a wealth of information out there to wade through, what is more apparent than ever is how little practical advice there actually is on what these changes mean, in real terms, to the companies it will impact. Blog after blog tells you when the requirements come in and, broadly speaking, what will be required. But what does all this mean and, as importantly, how can we at DP take the hassle out of ESEF for you?
Tag, you’re it!
The purpose behind ESEF is to make it easier to access, analyse and compare financial reporting through the use of machine-readable data (in the format of XHTML). This will be achieved by applying tags to the financial information (in a similar way to how an XBRL for HMRC is prepared…but using a different taxonomy (or set of tags), unfortunately!). For the first two years, it will only be the primary financial statements that require tagging, albeit the whole report must be filed with the NSM (National Storage Mechanism) in XHTML format. Thereafter, the notes will also be required to be tagged, as a block.
As mentioned above, ESEF will be effective for financial periods starting 1 January 2020 onwards. So, in effect, it won’t impact annual reports until 2021. So why are we worrying about it now? Apart from the fact that time flies (particularly when you have a financial calendar to live your life by!), getting ahead of the changes will give companies time to really think carefully about what the best approach is for them. Better still, there is still the benefit of another reporting season ahead to start making small changes now to better prepare for the impact of ESEF post-2021.
These changes will impact Main Market-listed companies, so all you AIM-listed companies are off the hook…for now…
How can we help?
With much debate about whether a single format or two document approach is best, it is easy to get lost in a sea of information without finding much in the way of practical advice. But, put simply, there is no one-size-fits-all approach. Different strategies will be most appropriate for each company, and that’s where we come in. Whether you want to push for change with a digital-first strategy, or would prefer a “minimum impact” approach on your reporting process (after all, we’re talking tagging only being required on four to five pages for the first two years!), we have the solution for you.