ESEF (European Single Electronic Format) is a new requirement regarding the form in which annual financial statements of companies listed on regulated markets of the European Union are created. The requirement applies to all entities, issuers from the European Union, whose securities have been admitted to trading on a regulated market in the EU. In Poland, these are companies on the main market of the Warsaw Stock Exchange.
As of 1 January 2020, entities that are issuers of securities admitted to trading on a regulated market in the European Union in accordance with the Regulation of the European Commission are obliged to prepare annual reports in the uniform European Reporting Format (ESEF). In Poland, due to the COVID-19 pandemic, the Ministry of Finance and the Polish Financial Supervision Authority have decided to postpone the obligation to apply ESEF by one year i.e. the introduction of new regulations from 1 January 2021.
According to the new requirements, all annual reports of issuers are to be prepared in XHTML format, thanks to which they can be opened and viewed using a standard web browser. The new guidelines also require that all consolidated annual financial statements be prepared in accordance with International Financial Reporting Standards (IFRS) and tagged (tagged) using the XBRL markup language. You want XBRL tags to be placed in a unified XHTML document using the Inline XBRL specification (iXBRL), which allows reports to be displayed correctly in XBRL in a web browser.
The taxonomy to be used – a kind of dictionary for marking data in XBRL statements, which contains information, definitions defining and classifying all concepts appearing in financial statements – is to be an extension of the IFRS taxonomy developed by the IFRS Foundation.
Financial reporting in ESEF makes reporting more accurate and efficient. Companies publishing reports are sure that the information contained in the reports is detailed and reliable (this is guaranteed by m.in audit by a statutory auditor), and entities using the information contained in the reports are sure of the compliance and reliability of individual precisely defined elements of the reports.
At first, all this sounds quite complicated, but currently many different tools are being developed to support companies in the implementation of this venture.
