As we head into the new season of annual report preparations, companies are at a turning point in how they use technology in corporate reporting. EU law now requires listed companies to report their financial statements in a new, digitised format. But what is this format and what does it mean for communications teams creating the annual report?
What is ESEF?
Those listed on EU regulated markets need to prepare their annual reports in the European Single Electronic Format (ESEF) - a new technical format that applies machine-readable tags to consolidated data in primary financial statements.
ESEF is a major step forward in reporting standards, with the primary aim of facilitating the access, analysis, and comparability of IFRS financial statements. This move is a huge benefit for the users of financial information, particularly investors, who stand to gain from the enhanced transparency when making investment decisions.
How do these new requirements impact the marketing demands of the annual report?
In short, communications and marketing professionals should not be impacted by ESEF requirements. Corporate reports remain an important touchpoint for all stakeholders and, whether it’s through a slick, accessible digital online report or a glossy print tome, the storytelling aspect of a report that serves to reinforce the brand, present your leadership, and communicate your strategy - is just as important as ever was.
ESEF will only impact how financial data is tagged and submitted to the relevant authorities.
Comprend work in partnership with an ESEF solution provider, ParsePort (the XBRL provider), who ensures that your report complies with the latest regulations. This process normally involves three simple steps:
- The final PDF version of the annual report is sent to the XBRL provider along with an excel version of your financial statements.
- The XBRL provider then gets to work preparing the final files by mapping the financial statements to ESEF taxonomy, creating extension taxonomy elements (if required) for accounting accuracy, merging this with the PDF report, validating the iXBRL document for ESEF compliance, and the most important step: ensuring that the final output looks identical to the original PDF version.
- During handover, the XBRL provider will provide training (usually to the finance team) on how to tag and re-tag the files, create, and validate iXBRL documents, since, as many of our clients know, there are always those 'last minute' changes that need to be made.
Does ESEF replace the need for an online report?
The advantage with iXBRL is that reports can be opened and explored with a modern web browser - Chrome, Firefox or MS Edge, but not IE11. However, these inline viewers are rudimentary at best and not fully accessible or responsive, meaning visitors are restricted to viewing the report on a desktop or laptop device.
See some examples of iXBRL inline viewer versions of this year's annual report from GLEIF and Arcadis.
Online reports are much better at serving their audiences, not only by creating a more impactful and enjoyable experience, but also by delivering content in the way people consume it. They are also more efficient to produce and give you the means to track performance and keep improving.
Still, rather than treating your final iXBRL files as a compliance checkbox, why not add it to the downloads section of your online annual report along with your PDF document and excel files, as GLEIF and Arcadis have done on their corporate websites?
How can we help?
We believe reports are better made digital. There are lots of ways to improve reporting and just as many ways to bring your company together through the power of digital processes. If you’d like to achieve ESEF Compliance without the stress and with minimal impact on your workflow, we can help you.
At Comprend, we have over 20 years of corporate reporting experience. Together with our clients, we constantly push to create more engaging and efficient digital solutions each year. We'd love to talk to you about enhancing and amplifying reports.