SAP BO Disclosure Management – XBRL:
Meet all ESEF Requirements and tag your Consolidated Financial Statements according to IFRS!
Since 1 January 2020, all European companies issuing securities/stocks within the EU are obliged to implement a new challenge: With the introduction of the new ESEF reporting, the European Securities and Markets Authority (ESMA) demands corporate reports to be prepared in XHTML format or with iXBRL technology.
We support you in meeting all new regulatory ESEF requirements correctly and precisely – with SAP BO Disclosure Management!
The final ESMA report of 18 December 2017 states as follows:
“All annual financial reports shall be prepared in XHTML. If the annual financial report contains IFRS consolidated financial statements, these must be marked with XBRL tags that are embedded in the XHTML document using inline XBRL technology. For the first two years, only the primary financial statements are required to be marked. After that, the entire IFRS consolidated financial statements will be tagged with XBRL tags.
The new European Single Electronic Format (ESEF) will advance the digitalization of corporate reporting. The aim is to optimize the availability and accessibility of corporate reports. A separate ESEF taxonomy has already been developed based on IFRS, with which all standard and documentation labels are available in all languages.”
So far, the use of a standardized and machine-readable reporting format is not yet legally required in most EU countries. As a result, there are still numerous system breaks in the preparation of financial reports up to now:
The non-continuous data supply chain is an enormous source of error and makes reporting costly as well as inefficient. Data must be entered and transferred manually while the individual work steps are often repetitive. Taken together, this therefore means an unfavourable combination of high error probability and waste of valuable resources.
In the future, this disadvantageous situation can be expected to change fundamentally for the better with the introduction of a standardized European solution for digital Financial Reporting.
For the first two years, the Regulatory Technical Standards (RTS) of ESEF only concern the primary components of the Corporate Financial Statements: Income Statement, Balance Sheet, Statement of Comprehensive Income, Cash Flow Statement, Statement of Changes in Equity.
After the first two years, also the notes to the entire Consolidated Financial Statements according to IFRS must be marked with so-called XBRL block tags.
For current updates on the introduction of ESEF, we recommend regular visits to the official ESMA website: http://www.esma.europa.eu/
The electronically readable file format iXBRL enables the digital analysis and interpretation of financial data – at just one mouse click! In the future, this will revolutionize the way analysts and investors conduct their company and industry analyses. Simultaneously, regulators will be able to check reports at the push of a button – leading to greater transparency and optimized investor protection. Machine-readable data are also a prerequisite for another future benefit: the use of Artificial Intelligence (AI) which will improve the analysis options very efficiently.
As early as 2017, individual software companies were invited to participate in ESMA field tests. These also regarded the transition of the Annual Financial Statements to iXBRL. Without going into the results in detail: The tests can also be seen as an indicator for a significant improvement in the quality of corporate reports.
XBRL will completely change the way how work with financial data is carried out in business and government organizations.