Preparing financial reports in ESEF

From 1 January 2021, issuers of securities must file and publish their annual reports digitally. This must be done in accordance with the European Single Electronic Format (ESEF).

Preparing reports in accordance with ESEF requirements and taxonomy

You must mark up your primary financial statements with XBRL tags in a process known as tagging and using the ESEF taxonomy an electronic format. The taxonomy contains detailed definitions of the tags. You should select the tag in the taxonomy that best describes what the number in the statement represents.

The ESEF taxonomy is based on the IFRS taxonomy issued by the IFRS Foundation and includes several extension elements added by the ESMA. This taxonomy has been integrated into the RTS and is updated annually. Issuers may also add their own extension elements to the taxonomy if they will enhance the user's understanding of the document. However, in accordance with a number of set rules, any such extension elements must be anchored in the ESEF taxonomy.

You should use block tags to tag notes to the financial statements. This means entire paragraphs will be tagged and the figures and tables included in the paragraphs will not be tagged separately.

Technical requirements the financial report must meet

Financial reports prepared according to ESEF must meet the following requirements:

• Resources embedded or referenced by the XHTML document MUST NOT contain executable code (refer to Guidance 2.5.1 ESEF Reporting Manual)
• An xbrli:identifier element should have a valid Legal Entity Identifier (LEI) as its content (refer to Guidance 2.1.1 ESEF Reporting Manual)
• The file size should not be larger than 100 MB
• The file should have the correct XML/XHTML/iXBRL-specification
• The ZIP file should be in accordance with the Taxonomy Package specification (refer to Guidance 2.6.1 ESEF Reporting Manual)

If your file does not comply to one of these requirements, this could lead to a(n) (FATAL) ERROR due to which the file could be rejected. We especially would like to draw attention to the Taxonomy package specification as this was the main reason why many filings for the year 2021 were rejected.

• ESMA's ESEF reporting manual

What is the purpose of the validation report?

After filing the financial report a validation report will be generated, even when the filing is accepted. The validation report is generated for your information and could possibly be used to improve your filing. Please keep in mind that as a result of your filing, we may ask questions about your reporting as part of our ongoing monitoring.

If you encounter a warning in the validation report, this could suggest that the validation software was not able to determine whether the detected deviation in fact is an error. An example of this is the xbrl.efr.esef.esma.missingMandatoryMarkups warning. This warning might not be an error but could also indicate that a specific tag needs to be added to a certain piece of information present in the financial statements. However, if this information is not included in the annual accounts, the tag does not need to be applied.

If you encounter an error in the validation report even though your filing was accepted, depending on the type of error, this may lead to further investigation.

ESEF Reporting Manual

With the ESEF Reporting Manual, the ESMA offers guidance on how to generate Inline XBRL instance documents, in accordance with the ESEF Delegated Regulation. It is important that issuers and their advisers familiarise themselves with its contents before preparing ESEF reports.

The European Commission answers frequently asked questions about ESEF in this document.

Test software using conformance suites

The ESMA has published its conformance suites to assist with the implementation of reporting in accordance with the ESEF format. The test suites provide software suppliers with excellent tools for establishing whether their software meets the technical requirements set out in the Regulatory Technical Standards on ESEF or RTS.