XBRL: How to produce your reports and map your accounts?

Since January 1st 2020, companies that publish their consolidated financial statements in IFRS format are required to adopt the European Single Electronic Format (ESEF). What are the challenges of iXBRL and what does this publication language consist of? How to prepare for it?

What’s at stake with the iXBRL?

The iXBRL: A regulatory constraint

For the closing of accounts in 2020, international regulations have changed for European companies listed on a regulated market. These companies are now required to report in XBRL format. On 18 December 2017, ESMA – the European Securities and Markets Authority – published the final version of the RTS technical regulatory standard, which requires companies to adopt a single European electronic format (ESEF) for the publication of the consolidated financial statements of groups subject to IFRS. More specifically, this concerns the publication of their annual financial reports for financial years beginning on or after 1 January 2020.

This new publication format ends the PDF format that most groups used to publish their financial reports. From now on, companies will have to publish their consolidated accounts in xHTML and tagged in iXBRL format in accordance with a dedicated and specific taxonomy.

iXBRL: Towards better financial communication

ESMA’s objective is to improve financial communication between investors and analysts. This tool should enable them to easily make comparisons between European Groups in different languages using indicators such as turnover.

iXBRL: Which statements are concerned within the AFR (Annual Financial Report)?

First of all, interim accounts are not affected by the new regulations. Only accounts with primary financial statements and a closing date of 31 December are currently affected. That is to say, the balance sheet, income statement (net income statement and statement of comprehensive income), cash flow statement and statement of changes in equity of companies publishing their consolidated financial statements under IFRS standards will have to be available in the single electronic iXBRL format.

• As of the first fiscal year ending after January 1, 2020 : Only by “identifying” the primary financial statements
• Beginning with the first fiscal year ending after January 1, 2022 by directly “identifying” the notes to the financial statements.

What is the iXBRL language?

The sum of two concepts

The starting point is that the financial statements in the annual report will need to be presented as a web page in xHTML format that can be opened by all browsers. They must also include XBRL tags to make the information structured, labelled and understandable by a computer. To be able to integrate these XBRL tags into the document, it will be necessary to use xHTML technology and more precisely inline XBRL.

XBRL or inline XBRL is a free standard that allows a single document to provide both human and machine comprehensible data. The iXBRL Format is an update of the XBRL specification.

The XBRL tags were previously in a closed taxonomy. It was not possible to modify this official taxonomy. This taxonomy requested by ESEF is now adaptable to the needs of each report. The format will thus make it possible to compare financial statements prepared differently in different languages, but it will also retain the layout of the original document and make it possible to analyse a large amount of financial information without cumbersome and tedious manual processing.

iXBRL: A specific taxonomy

The XBRL repository, also called taxonomy, is the dictionary of data used for the reporting model. This repository organizes information in a hierarchical tree structure.

The ESEF specifies that a set of XBRL tags to be used by issuers is provided by ESMA in the form of an XBRL taxonomy, itself derived from the iFRS taxonomy published by the IASB (International Accounting Standard Board). This taxonomy may be enhanced by a group through extensions. These extensions will have to comply with the inking rules clearly defined by ESMA.

Entities issue their own reports in accordance with relevant accounting standards. Even within groups with comparable activities, the financial statements of one are different from those of another, depending on their communication needs. iXBRL provides a number of different mechanisms to allow for this diversity, reflecting the specificities that have always been present in financial statements.
The basic ESEF taxonomy, contains all the accounting elements and structures of the IFRS taxonomy as well as the Legal Entity Identifier (LEI) taxonomy.
The ESEF taxonomy is documented in the manner in which it is constructed and with numerous examples of its use. Reference should be made to this documentation.

iXBRL: How do you prepare for it?

Implementation of group-specific mapping

First of all, the Groups will have to adopt the ESEF taxonomy, which is based on the IFRS taxonomy.

• The latter is updated annually
• It comprises about 7000 elements, ranging from the abstract to the finest elements
• Each element is associated with characteristics or attributes (label, type of periods…).
• The elements are classified by Roles. There are the “Primary Statement” Roles such as Roles 210000 and 220000 for the Statement of Financial Position but also other more specific Roles such as Role 800100 for the subdivisions of assets, liabilities and equity.

Mastering this taxonomy will allow to realize the most relevant mapping including elements present in the taxonomy, or the creation of extensions if an element specific to the group does not exist by respecting the anchoring rules.
This knowledge will make it easy to analyze the control phase during report generation and to prepare the audit phase.

Discover the new Talentia XBRL module integrated to its CPM Solution. The XBRL module is integrated into the Consolidation offer. It allows to manage financial consolidation in a collaborative way in multi-standard and to respond to the latest regulatory changes.

Find your full webinar : “XBRL: How to produce your reports and map your accounts?”