ESEF, XBRL and tags - what the new requirements mean for you
ESEF - European Single Electronic Format - is the new reporting format that affects all listed companies. The new rules for the digital formats mean that companies need to create digital annual reports with new programs and software that can tag the bills.
However, half-yearly reports and accounting for legal entities are not covered by the new reporting requirements. From 1 January 2021, the requirement only covers the primary financial reports: income statement, balance sheet, cash flow statement and changes in equity.
From 1 January 2022, tagging of notes is mandatory with permitted block tagging. These must be digitally tagged with XBRL tags according to the taxonomy.
What is XHTML and XBRL?
Financial reports will be prepared in the new format called XHTML (Extensible HyperText Markup Language). XBRL (eXtensible Business Reporting Language) is an information format developed to facilitate digital reporting and is used today as an international standard for digital reporting. XBRL is a free markup language that can be easily read by various machines and software. Today, XBRL is used in many countries, especially within the EU.
What is iXBRL and tagging?
iXBRL (Inline eXtensible Business Reporting Language) is the technology that enables XBRL tags to be integrated into an XHTML document. This means that iXBRL enables a document to be human-readable and also machine-readable via tagging. Software puts a virtual tag on a record in the bills, which means that authorities can more easily identify and automate several different functions, for example, the tags make it easier to translate bills and reports.
The tagging can be done both automatically and manually. There are several different vendors that can do this automatically, but the vendors' solutions may differ from each other. It can therefore be good to find out which solutions the different companies use.
It can be tricky to find a supplier and solution that suits your company, we at Ava are always up to date on which suppliers there are and the latest rules within the EU. We know which suppliers and solutions will suit your company and annual report. We at Ava help you with the annual report based on your conditions. Welcome to contact us!