With ESEF reporting now a law, that requires companies to submit their IFRS Annual Financial Reports (AFR) in a new format named EXtensible HyperText Markup Language (XHTML), with XBRL tags embedded in it and submit an Inline XBRL (or iXBRL) document. This means that PDF submissions will no longer be allowed to be filed with the national regulator. Here are some common questions that companies have about ESEF reporting.
10 Common Questions on ESEF Reporting
Who needs to comply with the iXBRL ESEF mandate?
All public listed companies who have securities or bonds listed on capital markets and who prepare financials using IFRS have to comply with the iXBRL tagging requirements.
What happens to a public company following local GAAP? Are they exempted?
If you are a public company, however, have standalone results published in local GAAP, your Annual Financial Statements (AFR) still need to be submitted in XHTML format just that the XBRL tagging requirements do not apply to you.
What is XHTML? What is iXBRL?
XHTML is simply a document format, it is a superior version of HTML. When an XHTML document has XBRL tags embedded in it, such document is called an Inline XBRL (iXBRL document). In simple words,
iXBRL= XHTML+ XBRL
While iXBRL, Inline XBRL, and XHTML are used interchangeably by many people in the context of ESMA ESEF reporting, you need to remember these are not the same.
How is iXBRL different from XBRL?
XBRL and iXBRL are two different reporting formats. XBRL is only machine-readable however iXBRL is both machine and human-readable.
To further explore the difference between XBRL and iXBRL, head over to our blog.
What is the scope of iXBRL tagging?
- Detailed tagging of Financial Statements (from 2020)
- Block tagging for notes (from 2022)
- Detailed tagging of notes (voluntary)
Do I need to submit only Financial Statements only or the whole Annual report?
The whole AFR needs to be submitted in XHTML format; however, the tagging requirement is only for the Financial Statements.
Can all XBRL software handle iXBRL?
No, not all XBRL software can handle iXBRL.
iXBRL requires the tagging to be done on the face of the AFR so that the iXBRL output reflects the layout and formatting of your report. It also requires the output to have XBRL tag embedded in the HTML document and such an HTML document needs to conform to the Inline XBRL technical specifications.
If the XBRL software is an excel tool, it cannot certainly handle iXBRL. If the XBRL software accepts uploading word reports with the layout and formatting and tagging that can be done on the face of the document, then such software has the ability to be customized to generate valid iXBRL documents. However, it is important to note that software that supports Inline XBRL technical specifications can only generate a valid iXBRL document.
Can ONE solution handle both AFR Preparation and iXBRL?
If you are using Microsoft word, excel, or Google docs for AFR preparation, this is the best time to look for disclosure management solutions in the market that will allow you to handle both AFR preparation and iXBRL in one centralized place. There are varieties of options with a wide spectrum of functionalities and price ranges as well.
You can make any number of changes to your documents and the various output file formats such as PDF, Word (for internal review purposes) and iXBRL generate with the latest numbers and text. You need to check your numbers just once!
This will help you to save a lot of time, you can focus on other important things needed or at least get some more quality time with family to spend with.
Does the XHTML/iXBRL document need to be audited?
Yes, the iXBRL document needs to be audited which means that your auditors also need to be fully aware of this new reporting.
How do I get started with ESEF Reporting?
Primarily it is the consolidation teams in the Company who are involved with the external reporting process. It is important that the CFOs office and the consolidation teams start taking a look at their existing process for AFR preparation and also look for solutions and services in the market.
To get started with the ESEF Compliance Reporting, here is an interesting read.
We hope this helps you with a fair bit of idea on what the mandate is all about, stay tuned for more educational content on the ESEF Reporting. If you have any questions about this mandate feel free to drop in an email to firstname.lastname@example.org and we promise we will get back to you.