Pursuant to a European Commission regulation, starting from 2021, all issuers whose securities have been admitted to trading on a regulated market in the territory of the European Union are required to prepare annual reports in the European Single Electronic Format (ESEF).
The new obligations relate to the marking-up of consolidated financial statements prepared in accordance with the IFRS using the XBRL markup language – as per the adopted taxonomies and principles. This obligation applies to financial years beginning on or after 1 January 2020.
MDDP Outsourcing, in cooperation with EQS Group, facilitates the process of preparing annual financial statements in iXBRL format for Polish groups. The service of preparing financial statements in XBRL format is a very good solution for numerous companies that every day struggle with newer and newer regulations and requirements.
Advantages of choosing the MDDP EQS ESEF service:
No expenditure on expensive software, no need for time-consuming changes to the financial statements preparation process; groups receive from us complete financial statements in iXBRL format.
Groups that have already used our service of converting financial reports to XML format know that not much will change for them in the existing process of preparation of their annual financial statements.
The report is sent in a common format (Word or PDF) to the EQS COCKPIT system. Having received the report, the IT team, in cooperation with the IFRS team, converts the report to XHTML, along with tagging of the mandatory items according to the XBRL/iXBRL markup language.
The iXBRL file having been prepared, the report is securely made available for download in the EQS COCKPIT system. After the report is approved by the issuer, the financial statements are approved in the Polish Financial Supervision Authority system (ESPI).
The marking-up (tagging) service for the financial statements sent to us by a client facilitates the process of preparing an annual report compliant with the ESEF, in line with all regulations applicable at the date of its publication.
The ESEF (European Single Electronic Format) is a uniform European reporting format in which all issuers whose securities are admitted to trading on a regulated market in the territory of the European Union are required to prepare their annual reports.
The overarching aims of implementing the ESEF include the following:
Digitization of financial information provided by issuers in a manner that ensures its readability in web browsers will also enable machine reading by specialized IT software. According to the new, uniform standard, annual reports are to be published with the use of the XHTML language, whereas the annual consolidated financial statements prepared in line with the IFRS should be additionally marked up with XBRL tags.
The new ESEF requirements apply to financial years beginning on or after 1 January 2020. However, some of the changes will only take effect as of 2022. The new arrangements will enter into force in two phases:
Marking-up (tagging) of the main consolidated financial statements, i.e.:
plus other disclosures indicated by the ESMA, covering the following 10 mandatory items:
The above 10 other mandatory disclosures are to be tagged as text.
The requirements for marking-up (tagging) are the same as in phase 1, but the list of mandatory items has been extended as follows:
Phase 2 introduces mandatory block labeling of the notes. (Optional) detailed labeling of the notes will also be possible.
XBRL (Extensible Business Reporting Language) is a technology for making up information that enables this information to be identified and described within an entity’s financial statements. XBRL tags should be included by issuers in the XHTML document (Extensible HyperText Markup Language), i.e. the format of their consolidated financial statements. XHTML should be readable by almost any web browser.
As the ESEF is based on XBRL technology, no other format will be accepted.
Each company has its own specifics, and its financial processes associated with reporting are structured in a different way. Listed companies, due to the size and sensitivity of data, require special attention. The finance departments of such enterprises need a thorough knowledge of the IFRS and stock exchange reporting. Relieving companies by choosing a professional XBRL advisor, who will prepare financial statements in XBRL format efficiently and without errors, is most certainly a beneficial solution.
Moreover, the time and resources required to select (and also implement) the appropriate software and train personnel in this area may exceed the capabilities of smaller companies. Choosing an XBRL advisor may prove to be a cost-effective and well-founded solution.
If you decide to use MDDP Outsourcing services, you can rely on our practical knowledge of the tool needed to prepare the required format and its specifics as well as our subject-matter knowledge necessary to perform the service.
MDDP Outsourcing Experts remain at your disposal. We will be glad to answer any inquiries regarding our services, offer quotations and other issues related to our company.
For more details please use the contact form.