ESMA is specifying the electronic format, which is known as European Single Electronic Format (ESEF), in which annual financial reports from 2020 will have to be prepared. ESMA is organizing field tests with interested stakeholders to assess whether the draft rules are practicable and to determine to which extent they must be improved. Applications for this field test will be accepted until July 14, 2017.
The field tests will consist of transforming annual financial reports by issuers to Inline XBRL instance documents, according to the draft ESEF specifications of ESMA. ESMA is seeking participation from software vendors and issuers on European regulated markets from all industries preparing IFRS consolidated financial statements. Participating issuers will receive free support to transform their annual financial report to Inline XBRL. They will thus be able to learn how the Inline XBRL format can be applied. Furthermore, the effort for their first filings, once the preparation of the annual financial report in the ESEF becomes mandatory in 2020, will be significantly reduced. Additionally, participants will have the opportunity to contribute to the development of the specifications of a ESEF that better fits their reporting needs. Several workshops will be held from the end of July until the end of August. ESMA will provide interested issuers with a list of possible dates.
ESMA was empowered by Article 4(7) of the Amended Transparency Directive to draft regulatory technical standards specifying an European Single Electronic Format (ESEF) in which annual financial reports have to be prepared. ESMA carried out a consultation on this and published a feedback statement setting out the key decisions taken, which can be summarized as follows:
All annual financial reports will have to be prepared in XHTML
Where the annual financial report contains IFRS consolidated financial statements, they have to be marked-up with XBRL tags according to the IFRS Taxonomy
The XBRL tags have to be embedded in the XHTML document through the Inline XBRL technology
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