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    ESMA Updates Reporting Manual and Regulatory Standards on ESEF

    August 24, 2022

    The European Securities and Markets Authority (ESMA) published the annual update to the reporting manual, including the final draft regulatory technical standards, under the European Single Electronic Format (ESEF) Regulation. The update covers changes in context of the 2022 update of the IFRS taxonomy as it relates to the ESEF Regulation.

    A key highlight of the update this year is the new guidance in relation to the ESEF regulatory technical standards requirement to mark up the notes to the IFRS consolidated financial statement following the “block tagging” approach. As the ESEF regulatory standards requirement is applicable to 2022 financial year for the first time, the manual contains a new section providing guidance to market participants on the expectations of ESMA on how to perform such block-tagging—for example, what elements from the taxonomy are to be used and what level of granularity on tagging the information is expected. This update also includes a new section on the ESMA expectations when issuers publish annual financial reports in other formats than the ESEF and further guidance when publishing annual financial reports in several languages as well as new technical guidance such as the construction of a block tag or the ESMA expectation to also tag dashes or empty fields in figures even if they are not considered numbers.

    The ESEF reporting manual is aimed to promote a harmonized and consistent approach for the preparation of annual financial reports in the format specified in the regulatory technical standards on ESEF. It provides guidance on common issues that may be encountered when creating ESEF documents and explains how to address/resolve them. Issuers are expected to follow the guidance provided in the ESEF reporting manual when preparing their 2022 annual financial reports and software firms are also expected to follow the guidance when developing software used for the preparation of annual financial reports in Inline XBRL. Additionally, the ESMA-published final draft regulatory technical standards specify all the relevant label types included in the IFRS 2022 Taxonomy and will facilitate the implementation of the tagging requirements; they will also help with the highest comparability of electronic financial statements, drawn up in accordance with IFRS at the European and at global levels for end-users. The amendments to the regulatory technical standards on ESEF are mandatorily applicable for financial years beginning on or after January 01, 2023; however, issuers will be allowed to use either the 2021 ESEF taxonomy or the 2022 ESEF taxonomy for annual financial reports, including financial statements beginning on or after January 01, 2022.

     

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    Keywords: Europe, EU, Banking, Insurance, Securities, Reporting, ESEF, ESEF Regulation, Regulatory Technical Standards, IFRS, IFRS Taxonomy, Reporting Manual, EC, ESMA

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