On document tagging Vs Template Tagging: The right approach for ESEF iXBRL Reporting

The ESEF iXBRL mandate, which takes effect on January 1, 2020, requires that issuers use iXBRL format in preparing their Annual Financial Reports (AFRs).  An Annual Financial Report in iXBRL format has XBRL tags embedded in the document – yet the document retains its original look, including style and design aspects.

Based on our experience in other markets where iXBRL has been mandated, filers are often unclear about the requirements of iXBRL and how to correctly tag their documents in iXBRL.

There are many available tools which work well for XBRL tagging, but which do not work as well for iXBRL tagging because they cannot handle the style and design aspects. Below we will discuss two types of iXBRL tagging – one correct, the other incorrect – but first let’s quickly review what we mean by tagging.

ESEF iXBRL Reporting

iXBRL tagging is a process where the information reported in a financial report has XBRL tags embedded on the face of the document. A tag is a unique identity attributed or applied to financial data, such as net profit, assets, liabilities, etc. The tag enables the company to report data in a machine-readable format, and because the tag is embedded on the face of the document, the data is also human-readable. Disclosures in the AFR are mapped or linked with the most appropriate element from the ESEF taxonomy (taxonomy is a dictionary of concepts provided by a regulator regulator), and extension concepts are created where there is no specific concept available in the taxonomy. To know more about ESEF Taxonomy and Tagging Concepts- read here.

There are two methods of applying tags in iXBRL, one correct, one incorrect:

1. On-document Tagging (CORRECT)

On-document tagging is done on the face of the document.  Below is an example.

On-document tagging (CORRECT) esef ixbrl On document tagging Vs Template Tagging: The right approach for ESEF iXBRL Reporting On document tagging CORRECT uai 258x88

On the left is a financial table in the AFR.  Embedded into the financial data are XBRL tags.  When a number in the table is clicked on, the XBRL tag information appears on the right hand side under the column “Element Name”.

On-document tagging is the correct method for tagging financial data in iXBRL.  It’s also the most efficient and flexible method, as tagging is easier on the face of the document, and extensions are available if needed. Most importantly, documents tagged using this method maintain their format.  They are not only machine-readable, but also human-readable, which is the intention of the mandate.

2. Template Tagging (INCORRECT)

In template-based tagging, the user manually keys-in the data that needs XBRL tagging in an Excel tool.  While these tools are positioned as clever ways to eliminate the complexity of XBRL, outputs from these tools have a basic problem. The tags are not embedded on the face of the AFR. Instead, the template generates a separate output that either is embedded somewhere in the actual AFR, or is inserted as part of a ‘hidden section’ of the AFR, or just the output of the template is tagged. The original format of the AFR is not maintained, and this defeats the main purpose of inline XBRL. Apart from that, this method of tagging takes time because the tags are manually entered into a worksheet.  There is also little flexibility in selecting or creating custom tags, as there are a predefined set of labels for each disclosure.

So, in summary, do remember – European companies will be offered many different solutions for iXBRL tagging. On-document tagging, where the tagging is done on the face of the document (and not in Excel), is not only easier and provides more flexibility, it is also in alignment with the ESEF iXBRL mandate.

IRIS is the most trusted name in XBRL implementation and reporting, and since 2005 has provided solutions for more than 26 regulators and 1.5 million filers across the globe.  Preparation of Inline XBRL documents is easy with IRIS CARBON®, our cloud based, collaborative, single source disclosure management solution.  For more information, or to schedule a consultation, send us an email at info@iriscarbon.com

Want to see what your annual report will look like in iXBRL?

We will be glad to create an iXBRL document for you, using your 2019 annual report at no cost and with no obligation – so that you can view an iXBRL document using your company’s data, and so that you can judge the quality of our tagging.