ESEF made easy

 

ESEF compliance is already one of the main priorities in early-planning for next year's annual report, needing input and checks from a number of your reporting project stakeholders including your auditors and finance team. Friend Studio offers cost-effective, ESEF-compliant solutions that provide the best of fully designed reporting in XBRL format.

Written by
Robert Riche

 

ESEF compliance is already one of the main priorities in early-planning for next year's annual report, needing input and checks from a number of your reporting project stakeholders including your auditors and finance team. Friend Studio offers cost-effective, ESEF-compliant solutions that provide the best of fully designed reporting in XBRL format.

 

ESEF is a new filing requirement in iXBRL format, required for reports on accounting years beginning on or after 1st January 2020. It will affect reports publishing from February 2021 onwards.

As an integral part of the report design and production process, our range of cost-effective services are fully-tested and are compatible with our reporting software and workflows. Our three solutions offer post-production tagging, semi-integrated parallel tagging with report creation, and fully integrated, digital-first report creation and tagging.

And our solutions can deliver this new ESEF filing with minimal impact on your established processes.

What can you do now?

We are starting ESEF preparations with our clients as early as possible in the 2020 reporting cycle, with many tests already completed – this will help ensure all of our clients have the most suitable approach and process in place in good time for next year’s filings. Over the past three years, our team has fully tested a range of options available and solutions have been improving significantly in the past few months.

UK regulation clarifications

The UK announced recently that the board will not be expected to sign off the iXBRL tagging as part of the Companies Act, which is a helpful clarification. However, there may still be a requirement under the Transparency Directive for boards to approve the ESEF version. Alongside this, when the UK’s national filing mechanism details are confirmed, we hope there will also be further clarity on the audit expectations and process guidance from the regulators, as this is a key part of processes that may affect the report creation process.

Possible delay to UK ESEF

Through summer 2020, the FCA has consulted stakeholders on a proposal to defer the UK implementation of ESEF by one year – effectively meaning the first iXBRL reports required in the UK will be for years on or after 1 Jan 2021 (instead of 2020), and to be filed from early 2022, not 2021. Friend Studio supports this proposal because it will allow companies longer to prepare fully, and enable regulators to provide clarification on any filing variations needed for the UK, and crucially if audit of the tagging is required.

Because the UK currently remains under EU law, we understand that the FCA’s proposal to defer ESEF cannot be mandated in the UK until after the Brexit transition period ends on 31 December 2020. There is also a possibility that the FCA proposal is not mandated – by the time this can be confirmed in January 2021 it may be too late to complete all the the preparations, checks and tagging that would be needed for reports on the 2020 trading year.

Despite the potential delay, we are advising companies to continue their ESEF tests and pilots with us now. Even if there is a delay to the requirement, the extra time allows more thorough preparations.

If you haven’t already started your ESEF preparations and would like to learn more, please get in touch.