Electronic Reporting; What do I need to know about ESEF/UKSEF?

ESEF (European Single Electronic Format) and UKSEF (UK Single Electronic Format) are electronic reporting formats required by all public companies listed on EU or UK stock exchanges when submitting their annual reports. From the fiscal year 2020, the European Securities and Markets Association (ESMA) has mandated using ESEF for filing annual reports with EU regulators (e.g., the AFM in The Netherlands). UKSEF is a similar regulation made mandatory for listed companies in the UK to file with the Financial Conduct Authority (FCA). To meet these regulatory reporting requirements, companies must convert their annual report to the ESEF/ UKSEF format, tag the numbers in the primary financial statements, and 'block tag' the notes.

The ESEF format requires companies to tag their financial information using the inline XBRL (iXBRL) format. UKSEF is similar to the ESEF format regarding its requirements and tagging structure. But UKSEF also requires companies to tag information using the Streamlined Energy and Carbon Reporting (SECR) taxonomy.

Moving to ESEF/UKSEF

Traditionally, companies create annual reports in PDF format for print and on-screen reading. ESEF integrates human-readable XHTML with machine-readable iXBRL, allowing software applications to extract and analyze the tagged information.

Tagging numbers in the primary statements

Tagging refers to adding standardized labels or "tags" to information in different sections of an annual report. These labels come from the International Financial Reporting Standards (IFRS) taxonomy. The tags allow consumers to identify specific information such as revenue, expenses, and assets. With iXBRL, the XBRL tags are embedded directly into the human-readable format rather than being stored separately in a different file.

Block tagging notes to the financial statements

In 2022 ESMA updated the ESEF Reporting Manual with additional requirements to tag the notes that accompany the financial statements using 'block tagging.' 'Block tag' refers to adding a label to a full disclosure or part as a single block. The content, such as text, numerical values, tables, and other data, is tagged as a single fact in a block tag.

These regulations aim to make financial information more accessible and comparable across different companies in the EU and UK regions, which can facilitate investment decisions and boost transparency in financial markets. Although the benefits are widely understood, the execution of converting to an electronic format and (block) tagging numbers and notes has proven to be a difficult transition. Read more about these ESEF/UKSEF challenges in our next blog.

Webinar 'ESEF-Compliant Reporting with Tangelo - [On Demand]

Watch our on demand webinar where we demonstrate the key features of Tangelo that help you with your ESEF report, followed by a Q&A session. Learn more about the webinar >>