Block Tagging: Light at the End of the ESEF Tunnel

European hierarchy published as guidance for nested tags

Good news for all preparers of machine-readable annual financial reports: XBRL Europe has published guidance on how to organize and assign the numerous “nested text block tags” within the 2022 ESEF report in a workable hierarchy. Until now, there have been no specific guidelines on this from the European Securities and Markets Authority (ESMA). The European Block Tagging Hierarchy, now made available as a non-binding working aid, is the result of an initiative by XBRL France. The individual hierarchy levels of tags for mandatory disclosures are clearly structured in an Excel document with indentations and facilitate the tagging of nested text blocks. The hierarchy along with explanations can be downloaded from the XBRL Europe website.

“There are only a few weeks left until companies subject to reporting requirements have to implement the additional, technically complex ESEF requirements in reporting for fiscal years starting January 1, 2022. However, a number of interpretation issues have not yet been clarified, particularly with regard to block tagging. This initiative within the European XBRL organization is therefore all the more welcome. Thanks to this guidance, issuers, auditors, users as well as reporting service providers and software vendors are beginning to see light at the end of the tunnel when it comes to block tagging,” said Diana Kaufhold, Managing Director of firesys GmbH and member of the Board of XBRL Deutschland e. V.

On the background to digital reporting
Since January 2020, capital market-oriented companies must also publish their annual financial reports in the uniform electronic and machine-readable reporting format Inline XBRL (“iXBRL”). For this purpose, the European Securities and Markets Authority (ESMA) gradually introduced the “European Single Electronic Format” (ESEF). The aim of XBRL is to facilitate the process of data exchange and analysis as well as the comparison and comparability of information. In the first two reporting years (from January 1, 2020), essentially only the “Primary Financial Statements” (balance sheet, income statement, statement of comprehensive income, statement of cash flows and statement of changes in equity) had to be labeled. For fiscal years starting January 1, 2022, the full reporting requirement will apply, requiring a significant amount of text and text blocks to be tagged in annual financial reports.

About the XBRL organization
The umbrella organization XBRL Europe and its XBRL country organizations are part of the XBRL International consortium. They pursue the goal of promoting the national and international dissemination of XBRL (“eXtensible Business Reporting Language”) in the interest of unifying reporting standards for financial and business information. XBRL is a technical specification that facilitates the publication and subsequent processing of financial and business information.

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