In the UK, mandatory compliance with ESEF requirements will begin with LSE-listed companies submitting their Annual Financial Reports for the financial year from January 1, 2021, to the FCA in the xHTML format.
The companies will have to place XBRL tags only against the basic financial information in their AFRs for the financial year just mentioned. From the financial year that follows (beginning January 1, 2022), the companies will also have to tag the notes to the financial statements.
While there are multiple ESEF software solutions in the market to choose from, it would help to consider a few points before narrowing down upon the one solution that would best serve your company’s purpose.
Here’s a five-point checklist to help you:
The right credentials and certification
Make sure you research the background and credentials of the ESEF software or service provider. Check the years of experience the XBRL professionals on their team have, the countries they have worked in, and the number of iXBRL filings they have handled in the past. A software with the right credentials would help you fit the bill perfectly in terms of ESEF requirements.
Ask for references from current customers of the ESEF software. Look for references from other countries where issuers are required to comply with ESEF requirements as well — requiring familiarity with the IFRS taxonomy, needing to submit documents in the iXBRL format, dealing with aspects such as extensions and anchoring, and handling stylized documents, among others.
Ability to handle stylized documents
Ensure that the ESEF software vendor handles tagging on the face of a human-readable financial statement and not on an MS Excel template. If you are presented with an Excel template, beware. It isn’t the iXBRL format. An Excel document cannot accommodate the customized styling and design of the AFR. Ensure that you do not fall short of the ESEF requirements when it comes to the appearance of your ESEF documents.
Flexible working models
Does the ESEF software under consideration offer you the flexibility to choose between in-house and outsourcing conversion options or a blend of both approaches? Also, does the iXBRL solution have any additional disclosure management modules to help streamline your overall annual report preparation process? Take care to choose just the right mix to help you perfectly comply with ESEF requirements.
Support anytime you need it
A new regulation often needs careful attention and implementation in line with the ESEF requirements. The ESEF software provider under your consideration should offer adequate support and expert assistance whenever you need it. Check if the provider works in your time zone and make sure that you are adequately covered whenever you need help. Find out what is the best way to access support — email, phone, or online chat. Also, check if you are going to be charged extra for any additional support hours.