ESMA 2020 iXBRL Mandate
The shift towards digital reporting for public companies across Europe is underway. The wave of standardized reporting is set to hit Europe by early 2020. The European Securities and Markets Authority (ESMA) has pushed for the digitization of data and financial information in an electronic format under the EU’s Transparency Directive. The practice of a European Single Electronic Format (ESEF) mandates that from January 1st, 2020, all public companies in the European Union use a single electronic reporting format while submitting their financial statements to ESMA.
What does this mean?
Similar to the SEC and CIPC mandates in the USA and South Africa respectively, ESMA requires all entities listed under its EU-regulated (capital) markets to compile and report their annual reports in the iXBRL reporting standard. Companies will be replacing PDF reports with XHTML/Inline XBRL reports as per ESMA 2020 iXBRL mandate.
When does the mandate commence?
This mandate comes into effect on the 1st of January 2020. Companies are expected to make themselves familiar with the prerequisites of the ESEF Regulatory Technical Standards laid by the ESMA.
Who needs to comply with the mandate?
All public companies in the European Union are required to comply with this mandate. This covers some 5300 companies today.
Which Taxonomy is to be used?
As per ESMA 2020 iXBRL mandate; ESMA has introduced the European Single Electronic Format (ESEF) taxonomy for companies to prepare iXBRL documents. The ESEF taxonomy is based on primarily IFRS (International Financial Reporting Standards) Taxonomy. Companies can also create custom elements (also known as extensions) if there is no appropriate element available in the ESEF taxonomy.