Close to 3 months from now ESMA’s digital reporting mandate, European Single Electronic Format (ESEF) will be applicable to all public listed issuers in the EU. This means that all issuers currently submitting their Annual Financial Report (AFR) in PDF will now need to submit it in a digital format named Inline XBRL (iXBRL).
Are you aware of the new mandate? Does it sound fearful? Do you feel you have missed out on these mandate updates? Don’t worry we have covered it all for you. ref reporting
Here are 3 important factors to keep in mind that will help you decide on the right approach for the ESEF mandate.
When to prepare your iXBRL?
Along with the AFR Preparation: –
If you want to streamline your AFR preparation process, here is the best opportunity. You can have a single solution that will help you prepare AFR and also handle iXBRL together. Make updates to the text, and numbers any number of times, the changes will automatically sync the document and the XBRL tagging.
After AFR preparation: –
Choose this process if you don’t want to disturb your ongoing AFR preparation and prefer to do the iXBRL after the completion of AFR preparation.
Who should prepare iXBRL?
In-house team: –
iXBRL documents can be created in-house by the issuer’s compliance/consolidation team who are already familiar with IFRS standards. Ahead of choosing this option makes sure that you budget adequate time for training, 1-week minimum. The overall process of iXBRL creation would take anywhere from 15-20 days for a beginner, and a review of documents could take 7 days at least to start with. Choose this option only if you have sufficient resources and time in hand. Most importantly, make sure you are provided with in-depth training in ESEF reporting, tagging, validations, and formatting the documents (which may not be an easy task by the way).
Outside XBRL experts: –
There are many specialized firms that offer XBRL services and solutions. If you have too much on your plate in terms of work, outsourcing is the best option. Please remember, even if you outsource iXBRL preparation to a vendor, the issuer is responsible for the review, accuracy, and timely submission of the iXBRL document to the national regulator. It would be good to budget close to 7-10 working days for the review of an iXBRL document for the 1st year, ensure that you get adequate training on ESEF, and its requirements ahead of starting the review of the document.
What tools or software are available?
Embedded solutions: –
There are ERP and accounting software solutions with iXBRL creation capabilities. Check if your ERP solution provider also offers iXBRL. If they do, that’s the best route to get started with ESEF reporting.
Specialized software: –
A number of software are available in the market- both desktop and cloud-based which offer iXBRL creation.
# Excel-based XBRL software does not create iXBRL in its true sense.
# There are many XBRL software, but not all of them can handle iXBRL. This is because iXBRL requires the software to handle formatting, a challenge in most XBRL software.
A platform backed by expert service, that provides companies the complete flexibility to decide how much of the iXBRL creation they want to do in-house, and how much they want to have done by a service provider.
The disclosure management modules of the platform also provide companies the option of streamlining their compliance report creations and going beyond just the ESEF reporting requirements.
We hope this article shed some light on how to get started with the upcoming ESEF mandate.