ESMA has recently published an updated ESEF Reporting Manual applicable to the 2022 financial year. This manual includes the requirement to mark up the notes to and the accounting policies of the IFRS consolidated financial statements, following the “block tagging” approach. This has the potential to be a significant task and we encourage issuers to engage early with software providers and auditors to identify any issues at an early date.
As noted in our recent Observations Paper, 2022 was the first year that the annual financial reports of issuers were required to be prepared in accordance with ESEF requirements. Europe-wide, enforcers’ observations from their reviews of such files included:
Use of extensions/custom tags
An issuer can create an extension/custom tag to tag issuer specific information. When extensions/custom tags are used, the issuer shall ensure that it is (i) correctly anchored to the closest core taxonomy element(s), and (ii) appropriately marked up using XBRL markup language.
Consistent tagging of the same fact
Where a fact is reported in more than one financial statement, the issuer shall ensure that the fact is consistently tagged. For instance, profit/(loss) for the year after tax is stated in the income statement, statement of comprehensive income, statement of changes in equity, and statement of cash flows.
Dashes that represent zeros
Dashes are often used to represent nil amounts in financial statements. Issuers shall ensure that the dashes are appropriately tagged and marked up.
Footnotes to the primary statements
Where footnotes are included in the primary statements and include a monetary amount, issuers shall ensure that the monetary amount is appropriately tagged and marked up.