Since the ESMA Mandate has been announced, there have been a number of statements and revisions. As briefed in our introductory blog, ‘What is the ESMA Mandate all about?’ the Inline XBRL (iXBRL) reporting standard will be applicable to all public companies in the EU. In this article, we dive deeper into how the ESMA mandate has shaped over the past few months and how it can affect the reporting of public companies.

esma mandate - ESMA Mandate: Updates and Upgrades

Taxonomy and Lingual Updates

In March 2019,  the European Securities and Markets Authority (ESMA) published a standard taxonomy for facilitating the implementation of the Regulatory Technical Standard (RTS) for the ESEF. It mandated that all public companies in the EU had to file their Annual Financial Reports (AFR) in the iXBRL reporting standard, come January 2020.The ESMA taxonomy provides a baseline multilingual dictionary (with the IFRS taxonomy translated into all the 23 official languages used across the EU) to facilitate the preparation and analysis of the Annual Financial Reports (AFRs) submitted to the OAMs.The tagging and filing can be done in the language of the filer’s choice.

esma mandate - ESMA Mandate: Updates and Upgrades

ESEF implementation timeline

ESMA Mandate

The technical implementation of ESEF is based on xHTML and iXBRL. According to the ESEF/ESMA Mandate, public listed companies will have to prepare Annual Financial Reports (AFR) in the xHTML format in stages starting with financial statements for 2020:

  • Financial statements for 2020-2021: The xHTML-format document will include the primary financial statements, tagged with the iXBRL standard in accordance with the ESEF taxonomy: consolidated statement of profit and loss and comprehensive income, statement of financial position, statement of cash flows and statement of changes in equity. There is no need tagging of notes.
 
  • Starting with financial statements for 2022: In addition to the primary financial statements, the notes to the financial statements must be tagged with XBRL tags. Notes will be marked up in accordance with the ESEF/ESMA Mandate minimum requirements as block tags, i.e. each note as a whole will be one XBRL tag, and individual line and column data within the note will not need to be tagged separately.

More details might be added to the reported information later, after experiences gained in use. The ESEF taxonomy includes, however, the opportunity for more detailed iXBRL tagging.

esma mandate - ESMA Mandate: Updates and Upgrades

Anchoring

ESMA’s ESEF taxonomy, which is based on the IFRS Foundation’s IFRS taxonomy, will be used in the reporting of financial statements. In addition to the ESEF taxonomy as per ESMA Mandate, companies can also use and create their own extensions to the taxonomy if they cannot find an appropriate tag in the ESEF taxonomy. Extensions, however, must be anchored to the closest accounting meaning of the ESEF taxonomy. The use of extensions reduces, however, the comparability of XBRL format data between different companies.

esma mandate - ESMA Mandate: Updates and Upgrades

Audit of iXBRL Documents

We anticipate that In markets where electronic structured data is already in place, a requirement for the auditing of electronic financial information will in due course become the norm and be expected by users. There is a debate in the EU if the iXBRLized statements are to be audited or vice versa.

Once the ESMA releases and approves a new taxonomy, we always make sure our cloud based platform; IRIS CARBON® supports the newest version of the taxonomy at the earliest.

Our team of experts encourages companies to be on the latest version of the taxonomy and proactively reaches out to our clients to appraise them about any mandate updates.

IRIS CARBON® supports the latest version of ESEF taxonomy/ESMA mandate with 23 European languages. Contact us today for a free demo and a seamless compliance to the ESMA Mandate

How can IRIS CARBON® help you?


IRIS CARBON® is a global leader in compliance reporting. With the experience of having worked in over 22 countries with over 300+ XBRL professionals, IRIS is committed to high quality data and has delivered solutions and services around XBRL/iXBRL as a standard.