Mastering ESEF Reporting: Format, Block Tagging, Filing Deadline & Taxonomy Updates
ESEF is at the forefront of the digital transformation of financial reporting, which is rapidly changing the way financial information is shared and analyzed. This article breaks down what you need to know about the ESEF taxonomy, the reporting timeline, the filing deadline and more.
What is ESEF reporting?
The European Single Electronic Format (ESEF) is an electronic reporting format that issuers of securities admitted to trading on EU regulated markets must use to prepare their annual financial reports.
Tagging for ESEF reporting
ESEF tagging involves the structuring of financial information according to the ESEF taxonomy, which is an extension of the International Financial Reporting Standards (IFRS) requirements for information tagging.
By structuring financial information in a standardised way, reports will be more understandable, accessible, and comparable.
Furthermore, the ESEF mandate requires issuers to “block tag” the notes to their financial statement, where the content of an entire section of a report is tagged to the corresponding ESEF taxonomy element.
Who has to comply with ESEF?
All companies within the European Union that have securities listed on a regulated market are required to comply with ESEF.
This includes companies with securities listed on the main market in the EU, such as the London Stock Exchange, Euronext, and others.
ESEF in a nutshell
ESEF has introduced significant changes to the way companies submit their annual financial reports. Reporting in PDF is a thing of the past.
It is critical to understand the key ESEF reporting requirements. Here are the three requirements that you need to know.
In the following section, we’ll explore the xHTML and iXBRL requirements in greater detail.
Click to go to our complete list of all ESEF reporting requirements →
The ESEF format explained
In what format should companies report?
The ESEF format combines xHTML and iXBRL, creating a unified reporting structure.
The standard practice of submitting your annual report to your OAM (Officially Appointed Mechanism) in PDF is now a thing of the past.
Due to the ESEF reporting requirements, annual financial reports must now be formatted in xHTML to be compliant.
Your consolidated financial statements and notes must be tagged using iXBRL. This means that the required iXBRL tags are embedded in the xHTML report.
What is xHTML for ESEF?
xHTML stands for Extensible Hypertext Markup Language, and is supported by all major web browsers.
Why xHTML is used for ESEF reporting:
- It enables structured data in annual financial reports to be presented on the web, ensuring enhanced accessibility and readability.
- xHTML’s interoperability and compatibility with other data formats, such as iXBRL, allows for the proper tagging and marking up of financial data, ensuring seamless data analysis.
What is Inline XBRL for ESEF?
iXBRL assigns meaning to the figures included in your annual report by tagging them to the ESEF taxonomy, which functions as a standardised dictionary.
This process results in a structured format for the data, allowing for easy processing by software programs.
Discover our free guide on iXBRL tagging for ESEF
Simplify ESEF tagging with our online guide – know exactly what to tag, when to tag, and what not to tag.
What is an ESEF report?
It is a common misconception that an ESEF report is a single file.
An annual financial report in ESEF comprises of two components:
- The xHTML report
- The ESEF taxonomy package containing technical information on mathematical relationships and extensions.
To package these components together, ESEF reports are delivered as a .zip package rather than a single file.
It is essential to understand this structure and format to ensure that your ESEF report meets all the necessary requirements for submission.
What an ESEF file ready for submission looks like
An ESEF report that’s ready for submission comes in the form of a .ZIP file. Here’s what the contents of the ZIP file look like.
View your ESEF file online – iXBRL viewer
As part of our ESEF conversion solution, we provide an HTML version of your converted annual financial report within the ESEF package. This file includes an ESEF viewer, which enables you to view the tagged iXBRL file directly in your web browser.
Upon opening the HTML file, you will notice a window on the right side of your browser that allows you to customize the display options. You can highlight entries and use the left/right arrows on your keyboard to scroll through the XBRL tags embedded in the file.
It is crucial to note that the viewer file is not part of your ESEF compliance and should not be submitted to your OAM.
How to make ESEF reports accessible to your stakeholders
Your investors or other stakeholders who are interested in evaluating your company’s financial health will want to view your ESEF report.
The HTML version of your report, which we provide along with an ESEF viewer, is perfectly suited for this purpose.
Hosting your ESEF financial report on your website is an ideal way to allow your visitors or stakeholders to access it without requiring advanced software capable of viewing ESEF reports.
The Ultimate Block Note Tagging Guide (Free)
Complete block note tagging guide with step-by-step instructions, examples, and popular method comparison. Learn from our ESEF experts.
The ESEF reporting timeline – When to prepare and file
The ESEF reporting timeline can be broken down into five reporting phases: planning, preparation, design, conversion and publication.
The whole reporting process takes about 13 weeks, equivalent to three months.
1. Plan – 3 weeks
To ensure a smooth and successful ESEF reporting process, we highly recommend starting with comprehensive planning.
This involves creating a detailed roadmap of the reporting process, including
- all the necessary tasks;
- parties involved;
- key milestones;
- and important deadlines.
By doing so, you can effectively manage the reporting process, minimize errors, and ensure compliance with ESEF regulatory requirements.
This roadmap should be shared with all key stakeholders involved in the process to ensure everyone is on the same page and working towards the same goals.
Remember, proper planning is crucial to the success of your ESEF reporting process.
2. Prepare – 4 or 5 weeks
During the preparation phase, you build the foundation for your ESEF reporting process.
Here are some critical items to include in your ESEF reporting preparation checklist:
- Prepare an initial draft of tagging
- Define the block tags to be used
- Ensure high quality financial statements
- Agree on block tags to be used
- Send mapped financial statements and block tag list for audit review
- Conduct a technical check of all iXBRL tagging/ESEF mapping
3. Design – 3 weeks
Finalizing the PDF of the new annual report usually takes around 3 weeks.
Designing for xHTML
To comply with ESEF reporting requirements, annual reports must be prepared in xHTML format.
It is crucial for design agencies and design teams to be well-equipped to design for xHTML. It is essential your design team follows the Design Reporting Guidelines by ESMA so that the IDML file (Indesign Markup Language File) renders correctly in xHTML.
It is advisable to perform a test conversion of a condensed version of the PDF report to identify any unanticipated errors.
This step enables your design team to rectify any issues and ensure that the final report is of high quality and meets ESEF reporting standards.
4. Convert – 2 weeks
Our platform makes it easy to convert your annual report to ESEF format. You simply upload two files – the annual report in PDF format and your ParsePort Tagging Template.
Set aside time for validation
Our converter automatically validates your report and highlights any errors or warnings that require your attention.
It is essential to set aside additional time to review and rectify these issues to ensure that your ESEF report is accurate and compliant with the ESEF standards.
Download your final ESEF zip file
Once all the errors and warnings have been addressed, your ESEF zip file is ready for download.
You can then submit it to the relevant authorities with confidence, knowing that your report is compliant and accurately reflects your financial information.
Transform your financial report into a compliant ESEF report with ease. Learn more about our ESEF converter here.
5. Publish – ESEF filing deadline
The filing deadline for ESEF reports is dependent on the EU member state where the issuer is based, but it is generally within four months after the end of the financial year.
The filing deadline often falls within April.
What is the ESEF taxonomy?
The ESEF taxonomy is an XBRL taxonomy, which serves as a dictionary for financial reporting concepts, directing issuers on which tags to use to tag their financial statements.
It is closely aligned with the IFRS taxonomy with few variations.
There are two ways in which the ESEF taxonomy is published.
- Firstly, the ESEF taxonomy is made available in XBRL format for the creation of Inline XBRL reports.
- Secondly, a PDF list of the taxonomy elements is included in the Regulatory Technical Standards (RTS) as part of the legislative framework
In addition to the official taxonomy, ESMA also provides supporting documentation and technical guidance to help companies and software providers comply with ESEF reporting standards.
How to view the ESEF taxonomy?
When reporting with ParsePort, you’ll be provided with a ParsePort Tagging Template.
This template includes all available tags in the ESEF taxonomy, making it the only thing you need to tag your annual financial report, effectively taking away the need to familiarize yourself extensively with the taxonomy.
To access or view the ESEF taxonomy, you have several options available:
- Download the ESEF taxonomy in a freely accessible XBRL format from ESMA’s website. You can access the ESEF taxonomy here.
- To directly view the ESEF taxonomy, you can use a taxonomy viewer. ESMA recommends a viewer on the ESEF hub available here.
Timeline for ESEF taxonomy updates
The ESEF taxonomy is updated annually.
The timeline for an ESEF taxonomy update may vary slightly from year to year, but ESMA typically gives companies and software providers several months’ notice to prepare for any changes.
You can use the following timeline as a guide to when you can expect ESEF taxonomy updates.
- June or July: Draft updates to the ESEF regulation and the ESEF reporting manual are submitted by ESMA.
- September: The European Commission adopts the updates.
- December: ESEF XBRL taxonomy files and an update to the ESEF conformance Suite are published.
- 1 January of the following year: The updated ESEF taxonomy comes into effect.
Transition automatically from one ESEF taxonomy to the next with ParsePort
Transitioning from one ESEF taxonomy to another can be a time-consuming and manual process, but with ParsePort, it becomes a seamless and automated experience. Our cloud-based platform simplifies the transition to a newer version of the ESEF taxonomy by automatically updating it on the backend of our engine as soon as the new one becomes available.
With ParsePort, the burden of manually switching taxonomies from one year to another is lifted off the your shoulders as the transition happens effortlessly in the background. You can trust that you will always be using the most up-to-date taxonomy without any hassle.
Even though you transition to a new taxonomy, you can still access older versions on ParsePort’s platform. This ensures that you have the flexibility to refer back to previous versions if needed.
Simplify your ESEF reporting – Fast conversion and accurate validation
With our ESEF platform, you can convert, inspect and validate your report in seconds.
We offer three flexible ESEF packages, ranging from basic conversion and inspection tools to a complete service with expert guidance at every stage.
Make compliance a breeze with our user-friendly solution. Get started today.
Discover the ESEF package that’s right for your reporting needs with ParsePort.