Digital Financial Reporting

Today, the European Securities and Markets Authority (ESMA) published the final Regulatory Technical Standards (RTS) setting out the new European Single Electronic Format (ESEF).

Beginning in 2020, this format will be used by listed companies to represent their annual financial reports which are submitted to the ESMA.  ESMA has also published the ESEF Reporting Manual, Preparation of Annual Financial Reports inInline XBRL which provide detailed instructions for creating such XBRL-based digital financial reports.  For more information, see the ESEF web site.

A draft version of the ESMA taxonomy can be downloaded here.

I will provide additional information later; but my initial review of the documentation indicates that the ESEF which will be used by ESMA is very similar to how XBRL-based financial reporting has been implemented by the US Securities and Exchange Commission in terms of architecture if Inline XBRL is embraced by the SEC.  There are a few rather minor technical implementation differences and enhancements.

In my view, this increases the probability that the US SEC will be moving to the use of Inline XBRL.  What that means is that there is one global standard approach emerging to create XBRL-based digital financial reports which is a very good thing.