Within the UK, the London Stock Exchange’s Main Market falls within scope but not the Alternative Investment Market (AIM).

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An issuer must make public its annual financial report at the latest four months after the end of each financial year. In the UK this applies to account periods beginning from January 2021. Originally it was set to be implemented for accounting periods beginning January 2020, but because of covid, it was delayed by 12 months. Companies can elect to make a voluntary submission for their 2020 accounts. Although this is not necessary, it is good practice to ensure you understand the new filing regulations when they are mandatory.

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In the profit and loss section we can see the line item “Development management losses”. By searching the ESEF taxonomy we know there isn’t a prescribed tag matching this. With this in mind, we need to create an extension. To do this we copy and paste the name of the line item to create the new tag name and apply the basic properties of instant /duration, in this case duration as it is a profit and loss item, and as a debit as it is an expense item. The next step is to anchor it to the relevant wider tag of, ” Operating Expense”. By doing this, we have successfully created the extension and this extension can now be used as a normal tag.

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iXBRL or inline xbrl is simply a common technical specification which is used by many authorities  including HMRC and the Irish revenue but it is also used in Denmark, Singapore and South Africa.  The difference between all these jurisdictions lies in the rules and standards they specifically mandate.  ESEF also uses iXBRL, but the rules and provisions are specified by ESMA, the European Securities and Markets Authority .

Each regulatory authority specify their own taxonomy – a dictionary of terms which are tagged against relevant items in financial accounts.  ESEF work on the IFRS accounting standard taxonomy and is filed by the client, in the UK for example, through the FCA Electronic Submission System.   HMRC and the Irish Revenue have their own portals or gateways.

There is one specific area to highlight, in which the ESEF mandate has matured the tagging process and this is to do with extending the taxonomy.  With normal iXBRl, if there is a line item which doesn’t have a tag associated with it, we simply skip that item and do nothing with it.  With ESEF, we have to create a new tag to reflect that particular item in the accounts.

For example.  In the profit and loss section we can see the line item “Development management losses”. By searching the ESEF taxonomy we know there isn’t a prescribed tag matching this.  With this in mind, we need to create an extension.  To do this we copy and paste the name of the line item to create the new tag name and apply the basic properties of instant /duration, in this case duration as it is a profit and loss item, and as a debit as it is an expense item. The next step is to anchor it to the relevant wider tag of, ” Operating Expense”. By doing this, we have successfully created the extension and this extension can now be used as a normal tag.

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Do auditors need to sign off on the tagging of ESEF iXBRL?

There was an audit requirement under what’s called “the Audit Directive in EU law” for ESEF to have an audit report which would have an opinion on whether the accounts have been prepared in accordance with the statutory requirements. The European Commission’s view that ESEF compliance should be considered a statutory requirement.

However, in December 2020 the UK government announced its decision not to introduce this mandatory auditor requirement.

So in the UK , there is no requirement for auditors to audit the ESEF tagging. 

A company may choose to do this voluntarily, but there is no requirement for them to do so.

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For over 25 years 1STOPXBRL’s CEO has been providing financial compliance solutions to clients across the globe. From international corporations to independent financial and legal firms, service is steeped in quality, professionalism and an in-depth understanding of financial matters.

To find out more about 1STOPXBRL and how the group is helping businesses get ESEF ready, contact:

info@1stopxbrl.com
+44 (0) 20 77577470

About

Located in the heart of London’s financial centre, 1STOPXBRL is a quality focussed firm that specialises in providing global financial compliance solutions. Clients are offered tailor made services, backed with ISO 9001 and ISO 14001 Certification, as well as HMRC Accreditation for Accounts & Tax Computation iXBRL services. The group boasts a wide portfolio of international clients, including both large and small companies.

The post Do auditors need to sign off on the tagging of ESEF iXBRL? appeared first on 1stopXBRL Limited.

What is ESEF?

ESEF stands for the European Single Electronic Format.  It is a common reporting standard for all EU countries and the UK.  In the EU, it is regulated by The European Securities and Markets Authority (ESMA), and in the UK, by the FCA.

Who does it apply to?

Within the UK, the London Stock Exchange’s Main Market falls within scope but not the Alternative Investment Market (AIM).

When do I need to file it?

An issuer must make public its annual financial report at the latest four months after the end of each financial year.  In the UK this applies to account periods beginning from January 2021.  Originally it was set to be implemented for accounting periods beginning January 2020, but because of covid, it was delayed by 12 months.  Companies could elect to make a voluntary submission for their 2020 accounts but this is not mandatory. Companies can elect to make a voluntary submission for their 2020 accounts. Although this is not necessary, it is good practice to ensure you understand the new filing regulations when they are mandatory.

For over 25 years 1STOPXBRL’s CEO has been providing financial compliance solutions to clients across the globe. From international corporations to independent financial and legal firms, service is steeped in quality, professionalism and an in-depth understanding of financial matters.

To find out more about 1STOPXBRL and how the group is helping businesses get ESEF ready, contact:

info@1stopxbrl.com
+44 (0) 20 77577470

About

Located in the heart of London’s financial centre, 1STOPXBRL is a quality focussed firm that specialises in providing global financial compliance solutions. Clients are offered tailor made services, backed with ISO 9001 and ISO 14001 Certification, as well as HMRC Accreditation for Accounts & Tax Computation iXBRL services. The group boasts a wide portfolio of international clients, including both large and small companies.

The post What is ESEF? appeared first on 1stopXBRL Limited.