If you are publishing your 2021 annual financial report in ESEF iXBRL format, then this series is for you! In the first blog post of the ‘Common errors and pitfalls: ESEF Reporting’ series, we covered the four most common mistakes in ESEF filings, and the way to avoid making those mistakes.
In this article, we find out about more such errors, inconsistencies, and warnings you should be looking out for. Let’s get deeper into the insights gathered from previous ESEF filings and understand how to identify reporting errors to ensure the accuracy of XBRL tags.
1. Using Incorrect Dates
Tagging facts with an incorrect date can be considered a common mistake in ESEF filings. As different conventions are used to represent reporting periods and dates, this can lead to reporting errors.
Total assets, a type of balance item, are usually reported as an instant in time. This means that these can be reported as an opening balance (start of a reporting period) as well as a closing balance (end of a reporting period). Fundamentally, the closing balance for a reporting period and opening balance for the next period are the same and XBRL does not differentiate these dates from each other. Instead, a single, consistent interpretation is applied to all balance dates.
Now a balance date signifies the end of the reporting period (closing of the business cycle) in XBRL, hence for closing dates, the context remains the same, whereas, for opening balance, this can cause a reporting error. It is therefore important to correctly tag the opening balance dates.
Additionally, there are also duration facts that are reported not on a real-time basis but over a duration of time. In XBRL, the start and the end date are used to define a duration fact. If you are reporting a period covering the span of 2022, it will correctly be tagged as January 1 2022 to December 31, 2022.
Incorrect balance dates can be spotted without much hassle but it is important to review the reports and use appropriate XBRL tools to ensure the quality of ESEF filings.
2. Incorporating Redundant Labels
The ESEF ESMA taxonomy used for ESEF reporting consists of a human-readable description of a taxonomy component, called a taxonomy label. The preparers are advised to use the base taxonomy labels and create a new label in the form of extensions where it is not appropriate to use elements from the base taxonomy.
It is sometimes observed that the base taxonomy elements are redefined by the preparers in their extension taxonomy while preparing the ESEF reports. Even when the redefined labels do not differ much in meaning from the base taxonomy labels, they add redundancy to the reports and should be avoided. It is best to provide reference to the base taxonomy while providing labels to such elements.
Redefining base taxonomy elements in their extension taxonomies is not desired in ESEF filings. Such relabelling unnecessarily adds to the size of the report and also tampers the meaning and context of the XBRL fact.
Rather than replacing the base taxonomy label, it is better to use a specific label role and provide a reference. This will help to make ESEF reporting more transparent and consistent.
3. Formatting HTML Documents and Tags
The iXBRL or inline XBRL report is a machine and human-readable report with XBRL tagged data embedded in an HTML document. ESEF filings usually have a highly stylized document and HTML help in the application of formatting and styling in these reports. Sometimes these stylization techniques may create a problem for tagging in Inline XBRL, like the following:
It is prohibited to have an HTML tag within a numeric tag as per the current iXBRL v1.1 specification. The styling and formatting have to be done to tag the number as a whole. While it is rare to apply styling to a single digit, some automated document conversions (like PDF to HTML) can assign an HTML tag to a numeric tag. This usually happens when slight changes are made to the PDF document in order to safeguard its appearance.
Such issues are often not detected and create iXBRL tagging errors by breaking the link between the tagged machine-readable information and displayed human-readable value. Apart from this these need a thorough review because the tagged and displayed values may differ. Hence, the added HTML tag needs to be omitted in order to tag the numeric value normally.
Example: The following example shows how the attribute ‘display: none is used for the values reported in the iXBRL document. If the values are assigned the ‘display: none attribute, then the XBRL tags will be hidden from view in the xHTML document.
The stylized text tags can sometimes present a problem during iXBRL tagging. HTML documents often have white spaces that do not change the document’s appearance. These white spaces are a result of text spaces, a combination of spaces, and newlines that are often normalized as a single space by HTML. Although this does not affect the display of the document, these additional white spaces will be included in values for XBRL facts.
Example – The below text is used to tag the concept “ifrs-full: AddressOfRegisteredOfficeOfEntity”
Below is the HTML file which shows how its value is captured
Due to this, there will be white spaces included in the tagged values as shown below
While some rendering software may normalize this, it is always advisable to remove these white spaces from HTML documents to avoid this issue.
4. Applying Rounding and Inconsistent Calculations
As discussed in the earlier blog, calculation inconsistencies arise when the values of the facts stated in the ESEF reports do not compare with the calculation relationship stated in the taxonomy. Another common occurrence is the rounding of values in the reports.
For ease of illustration, numeric values are often rounded to the nearest number in the iXBRL reports. While this makes a fact more readable, it does not satisfy the calculation relationship and causes a mismatch. Due to this, the iXBRL tags the rounded value figure that has the evident calculation incongruity.
It is essential to review calculation inconsistencies while preparing the report and use a suitable XBRL review tool that can help to pin down the root cause of calculation inconsistency.
Example: Calculation inconsistency
Example: Rounding up differences
We hope you enjoyed reading this series. And we hope these articles will help you identify mistakes in your ESEF documents and make a difference to your overall financial reporting process.