Dual Taxonomy Reporting
The Natural Next Step after ESEF Reporting.
Companies all over Europe have spent the past year preparing for ESEF, and now we are seeing the first ESEF reports being published. In Denmark companies like Novozymes and Ørsted are already publishing their financial reports, and not just in ESEF, as Danish companies have to carry out dual taxonomy reporting.
While Danish authorities have given companies the option to postpone reporting in ESEF, many of the biggest Danish companies have chosen to ignore that option and carry on publishing their annual financial reports in ESEF.
This is especially impressive because Danish companies aren’t simply required to hand in an ESEF report, they have to report in a so-called dual taxonomy.
On top of this they also have to mark-up corporate governance, corporate social responsibility etc. which means that Danish companies are already on their way to living up to the 2022 requirements regarding tagging of the notes.
XBRL and Dual Taxonomies
In an ordinary ESEF report an element is referred to a specific taxonomy element in the ESEF taxonomy, but when a report is created with two taxonomies, different elements are referred to taxonomy elements in two different taxonomies. For Danish companies this means that elements are mapped towards the ESEF taxonomy and the Danish DKGAAP taxonomy.
The ability to do this isn’t new, rather the capability to refer to two taxonomies at once has been embedded within XBRL for years but so far, the ability to carry it out just hasn’t seen wide use. In Denmark it is seeing use, however, and we expect many countries to follow suit.
Seeing as almost every country has something, they want to handle a little differently than the ESEF taxonomy, reporting in dual taxonomies seems to be the next natural step in the development of iXBRL reporting.
Creating Reports in a Dual Taxonomy Is Not for Everyone
Dual taxonomy reporting has turned out to be a rather complicated matter, which some XBRL providers has even had to give up on. However, at ParsePort we have managed to create reports in dual taxonomies.
Issues Receiving Dual Taxonomy Reports
The challenges do not stop when the reports for dual taxonomy reporting is created. A vast amount of the XBRL readers on the market are not capable of reading dual taxonomy reports correctly.
This means that they produce several errors which have nothing to do with the report in question, but rather happen because the reader cannot read the report correctly.
Dual Taxonomy Reports Came First
It wasn’t in the cards, that the first ESEF reports to be published would be dual taxonomy reports, but because Danish companies publish their reports early in the year, it just so happened that the ESEF reports that are probably the hardest for XBRL providers to create, were also the first to be published.
Below you will find links to some of the Danish companies who have already published their reports. The links will lead you to the Danish OAM “Finanstilsynet” where you can download the report:
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The future of financial reporting is here, and as European listed companies have started publishing in ESEF, a question begs itself. How do you, the investor, benefit from the new European Single Electronic Format?