{"id":78831,"date":"2021-05-13T07:21:48","date_gmt":"2021-05-13T07:21:48","guid":{"rendered":"https:\/\/fin-xsolutions.com\/?p=78831"},"modified":"2022-08-19T12:09:21","modified_gmt":"2022-08-19T12:09:21","slug":"esef-ixbrl-mandate-how-to-prepare-a-quality-instance-document","status":"publish","type":"post","link":"https:\/\/fin-xsolutions.com\/esef-ixbrl-mandate-how-to-prepare-a-quality-instance-document\/","title":{"rendered":"ESEF iXBRL Mandate: How To Prepare A Quality Instance Document?"},"content":{"rendered":"

[vc_row row_height_percent=”0″ override_padding=”yes” h_padding=”2″ top_padding=”2″ bottom_padding=”1″ overlay_alpha=”50″ gutter_size=”3″ column_width_percent=”100″ shift_y=”0″ z_index=”0″][vc_column][vc_column_text text_lead=”yes”]UK-based companies that must comply with the ESEF mandate must submit their annual financial report in a digital format to the\u00a0Financial Conduct Authority<\/a>. To be specific, the ESEF iXBRL format has two components \u2014 an instance document and a company taxonomy. What must you know about the two components?<\/p>\n

Instance document<\/h3>\n

Your instance document would be your annual report in a digital or iXBRL format. What does the digital format facilitate?<\/p>\n

Answer<\/strong>: Your annual report can be read by a human as well as a machine (computer). That\u2019s because your iXBRL annual report will have machine-readable tags embedded against a human-readable layer. Simply put, your iXBRL annual report will look just like a PDF document<\/a>, but your data will have machine-readable tags embedded so that the data can be read or recognized by a machine.<\/p>\n

Therefore, when you prepare an instance document in compliance with the ESEF iXBRL mandate, you not only ensure that your data gets shared with your stakeholders, but they are also able to analyze it better by running peer or sector comparisons at a click.<\/p>\n

Company taxonomy<\/h3>\n

A company taxonomy is a combination of the elements you adopt out of the ESEF taxonomy to present your data or disclosures. In other words, your disclosures and customized concepts and the inter-relationships between them make up the company taxonomy. The company taxonomy comprises four linkbases \u2014 Presentation linkbase, Calculation linkbase, Definition linkbase, and Label linkbase \u2014 that define the structure of an iXBRL document.<\/p>\n

In this write-up, we focus more upon the instance document and one of the aspects contributing to its quality \u2014 tagging.<\/p>\n

For a quality instance document<\/h4>\n

Your instance document creation involves linking each line item or disclosure in your annual report to a relevant ESEF taxonomy concept. If you fail to find appropriate taxonomy concepts to link some of your disclosures with, you will have to create custom tags or extensions. These custom tags will also have to be \u2018anchored\u2019 to taxonomy concepts with the nearest accounting meanings.<\/p>\n

Adding quality to your tags<\/h4>\n

Tags help impart machine-readability to your instance document. It will help you to have a good grasp of the ESEF taxonomy as well as your own report so that you pick appropriate tags.<\/p>\n

To understand how machine-readable tags look, here\u2019s an example.<\/p>\n

\u2018ifrs-full_Revenue\u2019 is the IFRS tag for revenue and \u2018ifrs-full_CurrentAssets\u2019 is the tag for current assets. Every tag has three attributes: data type, balance type, and period type.<\/p>\n

Data type<\/strong>: It helps denote whether the reported fact or element is monetary, depicts shares, or a percentage. For instance, the data type for the tag \u2018ifrs-full_Revenue\u2019 would be \u2018monetaryItemtype\u2019<\/p>\n

Balance type<\/strong>: The classification of a monetary concept as \u2018debit\u2019 or \u2018credit\u2019 is denoted by the balance type. In the above example, the balance type for revenue is \u2018credit\u2019.<\/p>\n

Period type<\/strong>: The attribute of an element that demonstrates whether it is measured as on a particular date or over a period is represented by Period type. Income statement concepts are an example of a \u2018duration\u2019 period type, since items reported on an income statement are measured annually. Similarly, since a balance sheet is reported on a particular date, balance sheet concepts will have the \u2018instant\u2019 period type.<\/p>\n

Starting points to assure quality in your ESEF iXBRL instance document creation process<\/h4>\n