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European Single Electronic Format

From 1 January 2021, issuers on EU regulated markets must prepare their annual financial reports in a single electronic format. The European Single Electronic Format (ESEF) mandate was introduced to facilitate access, analysis and comparison of annual financial reports. Aimed at benefitting investors and other stakeholders through greater transparency, it marks a significant milestone in bringing financial reporting into the digital age. Outlined below is an overview of the requirements and signposts to further resources.

ICAEW Know-How prepared by the Financial Reporting Faculty


The European Union’s (EU) Transparency Directive (the Directive) sets out specific requirements in relation to annual and interim financial reports of issuers whose securities are listed on a regulated market within the EU and establishes minimum requirements. It aims to harmonise the information provided by issuers and to ensure transparency in capital markets for the benefit of investors and other stakeholders.

The Directive was amended in 2013 to include, among other things, a requirement for issuers to prepare their annual financial reports in a single electronic format. The aim is to increase transparency by facilitating accessibility, analysis and comparability of annual financial reports. By enabling the automated analysis of large amounts of financial data, it seeks to benefit investors and other stakeholders. 

The European Securities Markets Authority (ESMA) was assigned responsibility to specify the particulars of the digital format and to develop the associated Regulatory Technical Standard (RTS or the Regulation).

The RTS on ESEF was submitted to the European Commission in December 2018, and following an endorsement process was published in the Official Journal of the European Union in 29 May 2019 thereby coming into EU law 20 days later, on 18 June 2019.

Who does it apply to and when?

The ESEF Regulation applies to issuers who are subject to the EU’s 2013 Transparency Directive ie, issuers whose securities are admitted to trading on a regulated market within a member state of the European Union. 

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

The Regulation was scheduled to apply to annual financial reports containing financial statements for accounting periods beginning on or after 1 January 2020. However, to reduce the burden on issuers in light of the coronavirus crisis, the mandatory effective date has been postponed by one year, to accounting periods beginning on or after 1 January 2021. Issuers will be able to publish and file their financial reports for accounting periods beginning on or after 1 January 2020 in the ESEF voluntarily if they wish to do so. 

In the UK, the Financial Conduct Authority (FCA) are responsible for implementing ESEF and for setting any UK specific rules. The requirements of the ESEF Regulation are implemented through the FCA’s Disclosure Guidance and Transparency Rules (DTR) which are contained within the Listing, Prospectus and Disclosure section of the FCA Handbook.

What are the requirements of ESEF?

All annual financial reports of issuers within scope must be prepared in XHTML, a human-readable digital language that can be readily displayed in standard internet browsers.

Where the annual financial report contains consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRS), these must be labelled with XBRL tags, embedded into the XHTML document using Inline XBRL. XBRL is a well-established format for digital business reporting that allows unique tags to be attributed to financial data.

For the first year, it is mandatory for only the primary financial statements to be marked up with XBRL tags (although additional tagging can be done voluntarily). The mandatory block-tagging of notes to the consolidated financial statements applies to annual financial reports for accounting periods beginning on or after 1 January 2022(as per the original timetable). More detailed tagging of the notes may be done voluntarily. 

Tagging should utilise the ESEF taxonomy, which is based on the IFRS taxonomy published by the IFRS Foundation but with some additions stipulated by ESMA. Embedding XBRL tags within the XHTML document will display as an additional layer of information when clicking on a piece of tagged data. 

Common questions

What effect does ESEF have on directors’ sign-off?
The UK Government has published a paper stating its position on the effect of the ESEF Regulation on directors’ sign-off of accounts of UK-incorporated issuers. This clarifies that the directors’ confirmation that the accounts meet the requirements of the Companies Act, and give a true and fair view of the company’s financial position, does not extend to consideration of the tagging. This is the case even if the company chooses to tag the accounts before submitting them to be signed off by the directors.
What about independent assurance on ESEF?

In December 2020, the UK government announced its decision not to introduce a mandatory auditor reporting requirement into UK law for the auditor to report on whether the electronic formatting of the accounts complies with ESEF requirements. Companies, however, may wish to obtain a report that covers the tagging of the ESEF accounts from their auditors, or other assurance provider, prepared in accordance with the FRC’s newly adopted ISAE 3000 standard.

Longer term, mandatory auditor reporting may be considered in the context of wider recommendations around audit reform.

What about Brexit?

Although the UK formally left the European Union on 31 January 2020, it remained subject to EU law during the transition period, referred to the Implementation Period (IP) in legislation. The transition period came to an end at 11pm GMT on 31 December 2020. 

The FCA made changes to its DTR sourcebook in order to implement ESEF requirements in the scenario of the UK being subject to EU law on 1 January 2020. As such, the UK is currently required to comply with ESEF Regulations. 

With regard to the audit of electronic tagging, the European Commission is of the view that, under EU law, the audit report must contain an opinion on whether the accounts have been prepared in accordance with the ESEF Regulation. The UK government has considered whether, during the transition period, electronic tagging of the accounts must be subject of reporting by the auditor. There is currently no requirement in UK law for the auditor to report on this. The UK government believes the auditor reporting requirement in the Companies Act 2006 does not need to amended and that mandatory auditor reporting should not be introduced in the UK at this stage.

Where can I find out more?

ESMA’s website has a range of resources available to support implementation. As well as the ESEF Reporting Manual, aimed at providing guidance on commonly encountered issues, it has published an example annual financial report prepared in accordance with the Regulation and also video tutorials to summarise the key requirements.

The Financial Reporting Faculty has produced the following resources to support its members and those of the Audit and Assurance Faculty:

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UK regulations

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