How to deal with Warnings while validating your ESEF iXBRL document – Part 2

You’ve made it to the fourth and final part of our series on the technical aspects of the ESEF iXBRL Mandate and yes, you’re definitely on a good track. In our previous article, we focused on important warnings that you may receive on your iXBRL report. In case you missed the article, just follow this link.

We also recommend that you update yourself about the guidelines issued by ESMA as well as the validation rules which have been classified as errors. The knowledge of these aspects will certainly help you to maintain the quality of your report and play a crucial role in a successful filing.

Let’s continue from where we left off in our previous blog.

Axis aggregation validations

The axis aggregation validation rules checks whether the fact values captured using the same XBRL tag bit with different members add up or not. There are 276 axis such rules present in the ESEF taxonomy.

Let’s look at the example below:

In this table, the entity has disclosed the value of its Land and Buildings during the year 2020. Additionally the separate values of Land and Building have also been disclosed. Let us now see how we shall tag the cost as at 31 December 2019 for all the three columns.

Here the cost values are of different types of Property, plant and equipment. Accordingly we shall be using the XBRL tag PropertyPlantAndEquipment to capture all three values. Also the context will be that of 31 December 2019. The differentiating factor here will be the members that we shall apply falling under the ClassesOfPropertyPlantAndEquipmentAxis.

The members shall be applied as follows:

Land: LandMember

Buildings: BuildingsMember

Land and Buildings: LandAndBuildingsMember

As per the structure of the taxonomy LandAndBuildingsMember is the parent member and LandMember and BuildingsMember are child members. This means that the values captured using the LandMember and BuildingsMember should add up to give you the value captured using the LandAndBuildingsMember. The axis aggregation validation rule checks whether this is happening.

In the above case, if the value of Buildings had been 370 instead of 367, there it would have given a warning since there would have been a difference in the value of 3.

Earnings per share validations

Earnings per share (EPS) is a company’s profit divided by the number of common stock shares it has outstanding. There are different types of EPS that can be calculated for example EPS from discontinued operations, Diluted EPS and so on. Accordingly there are 6 EPS Validation Rules in the ESEF taxonomy.

While validating the file, the EPS is calculated using the input variables and then is compared with the value actually reported. ESMA has allowed a little leeway by introducing a parameter (eps_threshold). ESMA has however not mentioned what the value of this parameter should be.

If the value of the parameter has been given as 0.5, it means that you will get a Warning only if the difference between the calculated EPS is more than 0.5.

Please see below an example wherein the value of the parameter has been given as 0.

esef ixbrl document

While such a warning could be on account of rounding-off differences, it is always a good practice to verify data for accuracy. Also do ensure that your validation tool gives you the ability to set the value of the parameter. In case it doesn’t do so, the rule will not run at all. You may get the impression that there is no issue on that account but in fact there could actually be a mismatch.

Percentage warnings

This rule will give you a Warning in case you capture the value as more than 100% for any XBRL tag which has a percent item type. While the percentage may actually be more than 100%, it is always advisable to cross-check it.

Positive fact validations

In this Validation Rule, ESMA has covered 1529 XBRL tags which should have a value which is greater than or equal to zero, i.e. they should have a positive value. However there is an exception to this rule. ESMA has excluded 23 dimensions from the ambit of this rule. This means that if a fact value is tagged using an XBRL tag out of the above 1529 tags, but a dimension from the above 23 has additionally been applied, and then this rule will not be run.

You should verify the values once to ensure that there is no mistake in your AFR or in your tagging.

Negative fact validations

There are 2 rules that are part of this validation.

The first rule is in relation to Accumulated depreciation, amortisation and impairment and covers 33 XBRL tags. Additionally there are 3 dimensions included – meaning that the rule gets run for the 33 XBRL tags when any of the 3 dimensions have also been applied. The second rule covers 1246 XBRL tags. However rule would be run only if the dimension Elimination of intersegment amounts [member] is also applied to such tag.

Here again, it is ideally good practice to cross check the values to ensure there no mistake in your AFR or your tagging.

That’s it for the important warnings you need to keep an eye out for. Yes, some warnings are very avoidable while others will point out discrepancies that may seem like a needle in the haystack. Nevertheless, as long as you know what to expect, the process of preparing your report in iXBRL will not be as herculean as you may be feeling right now. And don’t fret! If you feel like you need additional help or guidance, our experts are right here. We’ve been helping issuers successfully adopt their regulator’s iXBRL mandates for more than 15 years.

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How to deal with Warnings while validating your ESEF iXBRL document – Part 2