{"id":78713,"date":"2021-04-27T08:26:51","date_gmt":"2021-04-27T08:26:51","guid":{"rendered":"https:\/\/fin-xsolutions.com\/?p=78713"},"modified":"2022-08-19T12:10:34","modified_gmt":"2022-08-19T12:10:34","slug":"esef-reporting-lessons-to-learn-from-early-filing-experiences","status":"publish","type":"post","link":"https:\/\/fin-xsolutions.com\/esef-reporting-lessons-to-learn-from-early-filing-experiences\/","title":{"rendered":"ESEF Reporting &#8211; Lessons From Early Filing Experiences"},"content":{"rendered":"<div class=\"wpb-content-wrapper\"><p>[vc_row row_height_percent=&#8221;0&#8243; override_padding=&#8221;yes&#8221; h_padding=&#8221;2&#8243; top_padding=&#8221;2&#8243; bottom_padding=&#8221;1&#8243; overlay_alpha=&#8221;50&#8243; gutter_size=&#8221;3&#8243; column_width_percent=&#8221;100&#8243; shift_y=&#8221;0&#8243; z_index=&#8221;0&#8243;][vc_column column_width_percent=&#8221;100&#8243; gutter_size=&#8221;3&#8243; overlay_alpha=&#8221;50&#8243; shift_x=&#8221;0&#8243; shift_y=&#8221;0&#8243; shift_y_down=&#8221;0&#8243; z_index=&#8221;0&#8243; medium_width=&#8221;0&#8243; mobile_width=&#8221;0&#8243;][vc_column_text text_lead=&#8221;yes&#8221;]<\/p>\n<h3>\u201cWhere do we start?\u201d<\/h3>\n<p>You may be a lighthouse customer who has already filed their first ESEF report or a non-participant who has decided to wait and watch; there\u2019s a good chance you\u2019ve already posed this question to your finance team at some point. Deciding how to proceed with FCA-ESEF compliance finally comes down to a choice between two alternatives \u2013 an in-house or outsourced solution.<\/p>\n<p>Choosing an in-house solution requires personnel who are equipped with substantial accounting know-how as well as proficiency in XBRL. You would also need a product or service for the subsequent xHTML conversion of your annual report.<\/p>\n<p>The effort to bring this process in-house is usually only observed in organizations looking to develop long-term in-house XBRL competency. It entails detailed planning \u2014 in terms of the time and money that the organization needs to devote to training its resources.<\/p>\n<p>As XBRL evangelists who have worked with the standard for more than 15 years and in over 40 countries, we have seen that while companies initially prefer to outsource their XBRL\/iXBRL creation to a XBRL software\/service provider, they only begin to move these processes in-house when they start gaining familiarity with them.<\/p>\n<h3>Picking the right FCA-ESEF reporting solution<\/h3>\n<p>There is a surplus of\u00a0<a href=\"https:\/\/www.xbrleurope.org\/?page_id=1243\">tools<\/a>\u00a0that aid with all the parts of ESEF reporting. What then, should you consider, when\u00a0<a href=\"https:\/\/fin-xsolutions.com\/a-5-point-checklist-for-choosing-the-right-esef-software\/\" target=\"_blank\" rel=\"noopener\">choosing the best tool<\/a>\u00a0for your ESEF reporting needs?<\/p>\n<p>A product that can precisely tag numbers in your financial statements, as well as transform your stylized annual report into xHTML effortlessly and without loss in detail, is necessary.<\/p>\n<p>If your chosen product can also align with narrative reporting, i.e. tagging notes, then that\u2019s just the cherry on the cake. For you are then prepared for future revisions to the ESEF mandate and those related to broader phase 2 ESEF reporting.<\/p>\n<p>Other elements that may affect your final decision with respect to the choice of product or service might include budgeting, report complexity, corporate governance, and testimonies of reference customers.<\/p>\n<h3>Knowing the taxonomy and tagging requirements<\/h3>\n<p>Taxonomies can be quite complicated and perplexing for first-time filers. If a concept doesn\u2019t exist for a data item in your report, a custom tag or\u00a0<em>extension<\/em>\u00a0needs to be generated. These extensions should be used sparingly as they influence ESEF reporting by decreasing the comparability of your report against others.<\/p>\n<p>In addition to choosing the right tools, it\u2019s imperative to have the right experts by your side to assist you with regard to <a href=\"https:\/\/www.gov.uk\/government\/publications\/xbrl-guide-for-uk-businesses\/xbrl-guide-for-uk-businesses#tagging\">tagging, extensions, and anchoring<\/a>. Since these tools are not 100% automated, they require human intervention every now and then.<\/p>\n<h3>\u00a0XBRL tagging is not as big a deal as xHTML conversion<\/h3>\n<p>There has been an extraordinary emphasis on getting XBRL tagging right. However, the time and effort involved in creating an xHTML file that is identical to a company\u2019s stylized PDF annual report are underrepresented.<\/p>\n<p>After examining some of the early ESEF filings, we found that the biggest challenge issuers are facing is to have an\u00a0<a href=\"https:\/\/iriscarbon.com\/eu\/blog\/dont-let-your-esef-filings-run-aground-due-to-style-issues\/\">xHTML file that is indistinguishable from its PDF counterpart<\/a>. It is therefore important to pick a service provider and software that can accomplish this adequately. Carrying out a test run with an ESEF vendor can help you assess the results for yourself. As a good starting point, ask the vendor you are evaluating to convert a short section of your stylized report into xHTML.<\/p>\n<h3>Passing three levels of validations<\/h3>\n<p>There are three levels of validations that need passing to complete a successful ESEF filing. These are tool validations at the level of the ESEF service provider, the auditor, and finally the local regulator (FCA in this instance).<\/p>\n<p>Issuers may pass one level but fail another. Therefore, it is wise to do a dry run with an older annual report, (perhaps from the year prior) ahead of the live ESEF filing. It is imperative to make sure your ESEF iXBRL package passes all 3 levels of validation. The FCA will accept structured and tagged AFRs using non-reference taxonomies during the voluntary filing period.<\/p>\n<h3>The audit process and tackling last-minute changes<\/h3>\n<p>In some countries, there are official recommendations for the audit of annual reports published in the ESEF iXBRL format. This means that every version of the annual report that is sent to an auditor needs to be audited for ESEF as well. Therefore, it is essential to make sure your annual report publication schedule is allied with that of your auditor, leaving some buffer for contingencies.<\/p>\n<p>Last-second alterations brought about by the auditors and the Board can result in an increased to and fro, and more pressure to file on time. The design agency needs to track and incorporate these last-minute changes. The ESEF vendor also needs to deliver an updated ESEF reporting package on time, which will then be signed off by the auditor.<\/p>\n<p>Crafting a calendar where all participants, both in the organization and outside of it (design agency, ESEF vendor, auditor) are in sync, is fundamental to the success of your ESEF filing. Dry runs and testimonies from your vendor\u2019s reference customers are indispensable in tackling the issues.<\/p>\n<p>The key to successful ESEF reporting lies as much in attentiveness as it does in time management. Though submissions may seem convoluted at first, with the right set of utilities and personal guidance, your ESEF filing can be completed with minimal effort.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column width=&#8221;1\/3&#8243;][\/vc_column][vc_column width=&#8221;1\/3&#8243;]\r<!-- rt-button2 -->\r<div class=\"rt-button2 element-two hover-style-four ex1c4d2e51715dd47  font-bold z-index-button\"  data-button-direction=\"center\" data-button-fullwidth=\"false\"  data-button-icon-position=\"left\"><a style=\" color: #ffffff; line-height: 20px; font-size: 12px;\" class=\"rt-button2-main  vc_custom_1659509979195\" href=\"https:\/\/www.marketingdemo.irisbusiness.com\/contact\/\"  title=\"Contact Us\" target=\"_self\"><div class=\"overlay\"><\/div><div class=\"placeholder\"><i class=\"\"><\/i>Contact Us Now<\/div><\/a><\/div>\r<!-- rt-button2 -->\r[\/vc_column][vc_column width=&#8221;1\/3&#8243;][\/vc_column][\/vc_row]<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>[vc_row row_height_percent=&#8221;0&#8243; override_padding=&#8221;yes&#8221; h_padding=&#8221;2&#8243; top_padding=&#8221;2&#8243; bottom_padding=&#8221;1&#8243; overlay_alpha=&#8221;50&#8243; gutter_size=&#8221;3&#8243; column_width_percent=&#8221;100&#8243; shift_y=&#8221;0&#8243; z_index=&#8221;0&#8243;][vc_column column_width_percent=&#8221;100&#8243; gutter_size=&#8221;3&#8243; overlay_alpha=&#8221;50&#8243; shift_x=&#8221;0&#8243; shift_y=&#8221;0&#8243; shift_y_down=&#8221;0&#8243; z_index=&#8221;0&#8243; medium_width=&#8221;0&#8243; mobile_width=&#8221;0&#8243;][vc_column_text text_lead=&#8221;yes&#8221;] \u201cWhere do we start?\u201d You may be a lighthouse customer who has already filed their first ESEF report or a non-participant who has decided to wait and watch; there\u2019s a good chance you\u2019ve already [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":79824,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[97],"tags":[94,96,95,81,93,88],"class_list":["post-78713","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-esef-reporting","tag-esef","tag-esef-filing","tag-esef-reporting","tag-ixbrl","tag-xbrl","tag-xhtml"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>ESEF Reporting \u2013 Lessons From Early Filing Experiences<\/title>\n<meta name=\"description\" content=\"A blog post introducing some of the best lessons from the early filing experiences for ESEF Reporting. 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