The European Single Electronic Format (ESEF) is the new standard for digital financial reporting that all listed companies must comply with. The new format ensures transparency in all listed companies.
What is ESEF?
Since 1 January 2020, ESEF has been the new standard for annual reporting applicable to all listed companies. Its purpose is to ensure transparency in the financial reporting of companies so that anyone can gain insight into their accounts. All listed companies must publish public annual accounts, and gaining access to them has never been easier than it is now.
To produce an annual report that complies with the ESEF standard, a range of requirements need to be met. The ESEF may seem a little heavy-going, but, luckily, we are experts in this field. Let us look at the most important points contained in the standard.
First and foremost, the annual report must be published in the XHTML browser format so that all online readers are able to open and read the document. The ESEF is designed not only to make it possible for everyone to read annual accounts. The standard also makes it easier to analyze and compare financial figures. If the annual accounts have been prepared according to IFRS (International Financial Reporting Standards), this must be ‘tagged’ in XBRL which is a business reporting language for machine-reading which is capable of handling large volumes of data. It is also a system that provides a structured format, but for the digital tags to work, a taxonomy is needed. That is a hierarchy that creates structures and connections between them so that human-readable information becomes machine-readable information.
But what has to be tagged using XBRL? The ESEF is a new standard that was introduced at the beginning of the long year of 2020. That is why the entire standard has not yet come into force. More rules will be added for what needs tagging at a later stage. At the moment, it is just important to say that there are already strict requirements in place for what has to be tagged using XBRL. That is the presentation of profit and loss, balance sheet, cash flow, and equity.
How do you make an annual report ESEF-compliant?
We understand if this may seem difficult, hard, and even scary. It probably is for most people, but, luckily, we are experts in annual reports and are very well-versed in the legislation that is now coming into force. We always strive to design annual reports so that they are as easily accessible, relevant, and interesting as possible. We ensure this by applying an effective structure, simple navigation, and graphic elements that make understanding the report more exciting and easier to understand. Finally, we also want to highlight that an annual report done right can be used for so much more than just reporting figures. The report can be used as an important communication tool to showcase the company, tell stories about successes and challenges, and set out the company’s overall strategy.
Why not take a look at some of the digital annual reports we have designed and developed here?
If you would like to discuss a printed or digital report, we are always on hand for a no-obligation chat: