Q&A on the RTS on European Single Electronic Format (ESEF)

1) What is the ESEF?

ESEF (European Single Electronic Format) is the new single electronic reporting format for the preparation of annual financial reports to be published by listed companies in the European Union from 2021 onwards.

This format provides for one single file (1) that will include the financial statements, the management report and the responsibility statements of the persons responsible within the company. This file is human-readable, just like a normal webpage. As an additional obligation, companies who prepare consolidated financial statements, on the basis of International Financial Reporting Standards (IFRS), will also have to tag certain information in their financial statements in accordance with the IFRS Taxonomy using inline specifications (iXBRL). Ultimately, this will make the financial statements machine-readable.

2) Why is the European Commission introducing ESEF and what are the benefits?

ESEF is being introduced pursuant to Article 4(7) of the Transparency Directive to reflect the will of the European Parliament and the Council to establish a single structured electronic format for EU annual financial reports.

ESEF will enhance the comparability and usability of financial information. In particular, better and more comprehensive use of company data by investors and analysts is expected when using the inline specifications (iXBRL). This will, in turn, enhance the transparency of EU capital markets.

3) Which companies will have to prepare their annual financial reports in ESEF?

  1. a) All natural and legal persons – regardless of whether their registered office is in the EU or in a third country – with securities (including both shares and bonds) listed on an EU regulated market will have to prepare their annual financial reports in XHTML;
  2. b) EU issuers who prepare IFRS consolidated financial statements will have to tag them using the elements of the IFRS Taxonomy that correspond to the EU-endorsed IFRS. The tagging of individual financial statements by EU issuers is allowed provided that they use iXBRL and that a taxonomy is provided by the Member State in which they are incorporated;
  3. c) Third-country issuers will tag in accordance with the elements that correspond to the IFRS as issued by the International Accounting Standard Board (IASB). Third-country issuers using third-country GAAPs are not yet allowed to tag their financial statements.

(1)The file is formatted using eXtensible Hyper-Text Markup Language (XHTML).

4) When will the preparation of annual financial reports in compliance with ESEF become mandatory?

The use of ESEF for the preparation of annual financial reports will become mandatory for financial years starting on or after 1 January 2020. Depending on the length of the financial year, most companies’ reports in ESEF will be published for the first time in 2021 in relation to annual financial reports of fiscal year 2020.

5) Will preparation costs increase for companies?

The implementation of this new structured reporting format – especially as regards the iXBRL marking up of IFRS consolidated financial statements – might involve limited costs for companies in the initial stage. Costs will significantly depend on whether a company decides to prepare its annual financial reports using iXBRL internally or by outsourcing it to a third party, as follows:

  • In the case of preparation in-house, it is estimated (2) that the implementation costs for each company would amount on average to around EUR 8,200 for the first filing, and around EUR 2,400 for each subsequent filing;
  • In the case of outsourcing, the costs for each company would be on average around EUR 13,000 for the first filing, and around EUR 4,600 for each subsequent filing.

In any case, initial costs will decrease significantly after the first year of filing(3). The development of dedicated software is expected to assist companies in standardising and automatizing the preparation of ESEF-compliant annual financial reports.

6) Does ESEF bring any other benefits?

A number of academic studies have documented positive impacts of the introduction of iXBRL-based tagging of financial reports in a range of jurisdictions, including some EU Member States, on the cost of equity capital and stock liquidity,(4) access to bank funding,(5) the timeliness of audit reports,(6) and reduced audit fees.(7)

(2) ESMA – Feedback Statement on the Consultation Paper on the Regulatory Technical Standard on the European Single Electronic Format (ESEF), 21 December 2016.

(3) As stated by ESMA, but also as shown by a study by an AICPA study on XBRL filing costs

(4) Li, Oliver Zhen and Ni, Chenkai and Lin, Yupeng, Does XBRL Adoption Reduce the Cost of Equity Capital? (August 17, 2012). Available at SSRN: https://ssrn.com/abstract=2131001 or http://dx.doi.org/10.2139/ssrn.2131001

(5) Kaya, Devrimi and Pronobis, Paul, The Benefits of Structured Data across the Information Supply Chain: Initial Evidence on XBRL Adoption and Loan Contracting of Private Firms (April 29, 2016). Journal of Accounting and Public Policy, Vol. 35, No. 4, 2016. Available at SSRN: https://ssrn.com/abstract=2450858 or http://dx.doi.org/10.2139/ssrn.2450858. SyouChing Lai, Yuh-Shin Lin, Yi-Hung Lin, Hua-Wei Huang, (2015) “XBRL adoption and cost of debt”, International Journal of Accounting & Information Management, Vol. 23 Issue: 2, pp.199-216, https://doi.org/10.1108/IJAIM-04-2014-0031

(6) Keval Amin, John Daniel Eshleman, and Cecilia (Qian) Feng (2018) The Effect of the SEC’s XBRL Mandate on Audit Report Lags. Accounting Horizons: March 2018, Vol. 32, No. 1, pp. 1-27. https://doi.org/10.2308/acch-51823

(7) Yuan George Shan & Indrit Troshani (2014) Does Xbrl Benefit Financial Statement Auditing?, Journal of Computer Information Systems, 54:4, 11- 21, DOI: 10.1080/08874417.2014.11645718

7) What kind of assurance will be provided for financial statements prepared in compliance with ESEF? Will auditors check ESEF-compliant reports?

Considering that the ESEF Regulation is a binding legal instrument, the Commission services are of the view that the provisions included therein shall be considered as “statutory requirements” within the meaning of Article 28(2)(c)(ii) of the Audit Directive.

8) What is the Commission doing to facilitate the audit of ESEF and to clarify the practical implications?

The Commission asked the Committee of European Auditing Oversight Bodies (CEAOB) to explore how the audit of ESEF could be carried out in practice, with a view to possibly provide guidance to the market. In the context of the ongoing Fitness Check on public reporting by companies, the Commission is exploring whether the audit of ESEF could warrant possible modifications in the existing transparency rules.

9) Do the human-readable and the machine-readable rendering of ESEF constitute two different versions of the ESEF file?

No. Thanks to ESEF, the XHTML file that contains the annual financial reports will always be human-readable and, when marked-up with iXBRL, machinereadable as well.

10) Is there a reporting manual to help companies preparing their ESEFcompliant annual financial reports?

Yes, ESMA makes available on its website the ESEF Reporting Manual. It provides guidance to companies for the preparation of annual financial reports in compliance with the ESEF Regulation. This Reporting Manual will be updated if need be for clarification purposes and in the case of technical amendments to the ESEF Regulation.

11) Are there taxonomy files available in all EU languages to facilitate the preparation of ESEF-compliant annual financial reports?

Yes, the ESEF taxonomy files are available on ESMA’s website in all EU languages and can be downloaded for free. These taxonomy files will be updated at least annually so that preparers always get the latest up-to-date version.

12) Will Business Registers accept ESEF filing for listed companies that are limited liability companies?

Limited liability companies have to disclose their annual accounts to their national Business Register, in compliance with both the Accounting Directive and the Company Law Directive. 4 Listed companies have to disclose their annual financial reports to the national competent authorities and the national storage appointed mechanisms. In order to avoid that listed limited liability companies have to file the same documents in different formats, the Commission encourages Business Registers to accept ESEF filing as well (i.e. XHTML files with iXBRL tagging embedded).

13) Will the delegated act on ESEF have to be periodically updated?

Yes, this delegated act will have to be amended on a yearly basis to reflect possible updates made by the International Accounting Standards Board (IASB) in the IFRS Taxonomy.

14) Is XBRL tagging already mandatory at national level in Member States or Third-countries?

There are a number of stock exchanges requiring XBRL-based reporting or well advanced on XBRL programmes. The U.S. is the most well-known with the EDGAR system of the Securities and Exchange Commission. Other jurisdictions include Japan, Canada, South Korea or China. XBRL mark-ups usually reflect local taxonomies and, depending on the circumstances, the IFRS taxonomy to a varying extent.

15) What else is the Commission doing to further support the digitalisation of corporate reporting?

ESEF is only the first step in the digitalisation of public corporate financial information. Other initiatives – such as the activation of a European Electronic Access Point (EEAP) – are meant to complement ESEF in the digitalisation of public corporate reporting. In the context of both the Fitness Check on public reporting by companies and a Pilot project called the European Financial Transparency Gateway, the Commission is exploring the role of digitalisation in making information more accessible and more usable for users/investors.





The European Single Electronic Format is the electronic reporting format in which issuers on EU regulated markets shall prepare their annual financial reports from 1 January 2020.


In 2013 the Transparency Directive, which sets rules on harmonisation of transparency requirements of issuers, was amended to include, amongst others, a requirement for issuers to prepare their annual financial reports (AFRs) in a single electronic reporting format. ESMA was assigned the responsibility to develop regulatory technical standards (RTS) to specify this electronic reporting format. 

The objectives of the provision are to make reporting easier for issuers and to facilitate accessibility, analysis and comparability of annual financial reports.


The RTS on ESEFwill apply to all issuers subject to the requirements contained in the Transparency Directive to make public AFRs.

The ESEF requires that:

  • All AFRs shall be prepared in XHMTL, which is human readable and can be opened with any standard web browsers;
  • Where AFRs contains IFRS consolidated financial statements, these shall be labelled the XBRL ‘tags’, which make the labelled disclosures structured and machine-readable;
  • The XBRL ‘tags’ shall be embedded in the XHTML document using the Inline XBRLtechnology, which allows the benefits of XBRL tagged data to be combined with the human readable presentation of AFRs;
  • A taxonomy provides the hierarchical structure used to classify financial information and is essential for structured electronic reporting using XBRL. The taxonomy to be used for ESEF is an extension of the IFRS taxonomy. The schema of the core taxonomy is included in Annex to the RTS. Furthermore, XBRL technical taxonomy files compliant with all relevant technical and legal requirements are published on ESMA’s website to provide guidance to issuers’ in creating their own entity-specific taxonomy;
  • Preparers shall mark-up disclosures using the taxonomy element having the closest accounting meaning to the marked up disclosure; if the closest taxonomy element misrepresents the accounting meaning of the disclosure, issuers shall create a so-called extensiontaxonomy element and anchor such extension to the core taxonomy element that has the closest accounting meaning.
  • Primary financial statements (income statement, balance sheet, statement of cash flows and statement of changes in equity) shall be marked up in detail; the Notes instead will need to be marked up by applying mark-ups for whole sections of the notes (block tagging). 

The detailed provisions of the ESEF are contained in the RTS on ESEF  included in the Final Report on the RTS on ESEF.




ESEF Reporting Manual

ESMA prepared an ESEF reporting manual to provide guidance on common issues encountered when generating Inline XBRL instance documents.

The purpose of this document is to promote a harmonised and consistent approach for the preparation of annual financial reports in the format specified in the RTS on ESEF.

ESEF Video tutorials

In order to inform all relevant market participants of the new requirements set out by the ESEF regulation, ESMA has published video tutorials summarising the key requirements of the ESEF regulation and providing support in their implementation:

First video tutorial on ESEF : An introduction to the RTS on ESEF


Second video tutorial on ESEF: Implementation support for preparers: how to prepare an Inline XBRL report


– Third video tutorial on ESEF: Further implementation support for preparers. This video tutorial answers ten questions which are frequently asked by market participants to ESMA and National Competent Authorities on the ESEF Regulation. 


ESEF XBRL Taxonomy files

The taxonomy to be used for ESEF is based on the IFRS Taxonomy, prepared and annually updated by the IFRS Foundation, and provides issuers with a hierarchical structure to be used to classify financial information.

The human-readable labels of the core ESEF taxonomy, listing and defining the specific elements that preparers can use to identify (‘tag’) the information disclosed within IFRS consolidated financial statements, are included in Annex VI of the RTS on ESEF. The ESEF XBRL taxonomy files are a set of electronic files providing a structured representation of the elements that substantively constitute the core taxonomy. These can be accessed on ESMA’s website in the form of a taxonomy package prepared in accordance with the XBRL Taxonomy Packages 1.0 specification . The package includes entry points in all EU language. All files within the taxonomy package are also available at their canonical locations, hosted on the ESMA website.


The ESEF Conformance Suite is aimed primarily at a technical audience (i.e. XBRL software developers), as a way to test and provide assurance on whether software tools are able to create and / or consume filings which are in line with all ESEF requirements. In particular, the Conformance Suite permits to determine if a software is able to detect and flag infringements to the ESEF requirements contained in a filing.

The Conformance Suite builds on the rules and guidance set out by the ESEF Regulation and the ESEF Reporting Manual. It consists of 157 XBRL report packages, grouped into 60 tests, packaged in a zip file. It is accompanied by an Excel file which describes the rules and guidelines and the test cases, together with the expected error codes in case of incompliance. For each identified rule and guideline there is at least one valid and one invalid test case.


Subject to the completion of the legislative process by the European co-legislators, the ESEF will enter into force on the twentieth day following that of its Publication in the Official Journal of the European Union and will apply to AFRs containing consolidated financial statements for financial years beginning on or after 1 January 2020.


Field Tests

To assess whether the proposed specifications for ESEF were practicable and to determine if and to what extent they had to be improved, ESMA carried out field tests in summer 2017.

In these field tests, ESMA supported 25 volunteer issuers to transform their IFRS consolidated financial statements to Inline XBRL. ESMA published a number of the reports created in the course of the field tests to allow market participants to familiarise themselves with the Inline XBRL technology. These reports and more information on the field tests can be found on the field tests webpage.

A report on the field tests is included in the Final Report on the RTS on ESEF.


In the course of the development of the RTS, ESMA carried out a public consultation. The Consultation Paper was published in September 2015. The Feedback Statement on the consultation published in December 2016 summarises the feedback received and ESMA’s response to it. Furthermore, it contains a cost-benefit analysis for ESEF.





ESMA announced a new ESEF iXBRL mandate in the EU, requiring issuers to file their Annual Financial Reports (AFR) in iXBRL format. The mandate will come into effect on January 1, 2020. IRIS is a global leader in the XBRL and iXBRL space, and is working with issuers in the EU to help them meet the ESEF mandate in the smoothest possible manner. In this  article we’ve addressed some basic yet important questions that issuers have been asking about the upcoming ESEF mandate.

Who needs to comply with the ESEF iXBRL mandate?

All public listed companies in the EU who have securities or bonds listed on capital markets and who prepare financials using IFRS have to comply with the ESEF iXBRL mandate. Issuers are required to prepare their AFR based on IFRS standards in iXBRL format.

How is iXBRL different from XBRL?

XBRL and iXBRL are two different reporting formats. XBRL is an XML based format, and is only machine readable. iXBRL or inline XBRL, is an xHTML based format, and is both machine and human readable. Read more about the difference between XBRL and iXBRL here.

What is the relation between iXBRL and xHTML?

While iXBRL and xHTML are used interchangeably by many people in the context of ESMA ESEF reporting, they are not the same. A document in an xHTML format becomes an XBRL file if it has iXBRL tags embedded in the document. It should be noted that not all xHTML files are iXBRL.

What happens to a public company following local GAAP?

If you are a public listed company in the EU and you publish your standalone results in local GAAP, your AFR needs to be submitted in xHTML format, but the XBRL tagging requirements do not apply to you.

What is the scope of iXBRL tagging?

Issuers are required to submit their full AFR in iXBRL format with the tagging obligation covering the following:

– Detailed tagging of Financial Statements (from 2020)

All numbers in the Primary Financial Statements (balance sheet, income statement, stockholder’s equity, cash flow statement, etc.) need to be iXBRL tagged in the first Phase (Annual reports with financial years beginning on or after January 1, 2020)

– Block tagging for notes (from 2022)

All notes will need to block tagged (Annual reports with financial years beginning on or after January 1, 2022)

– Detailed tagging of notes (voluntary)

All numbers within the notes can be tagged voluntary at any time.

Do issuers need to submit only the XBRL tagged portion, or the entire Annual Report?

Issuers are required to submit the entire AFR in xHTML format. Within the report, XBRL tagging needs to be applied specific numbers and text, as per the directive of the ESEF mandate.

Can all XBRL softwares handle iXBRL?

The iXBRL output should look like the original AFR in terms of layout, formatting, and style. iXBRL requires tagging to be done on the face of the AFR. The only difference is that the iXBRL report will be in xHTML (and not Word or PDF or InDesign), and will have XBRL tags embedded in the xHTML document. Since XBRL is not a human-readable format, most XBRL solutions can’t handle the layout, formatting, and style of the original AFR.




ESEF – European Single Electronic Format:

What you need to know now about the new reporting obligation

From 1 January 2020, all issuers of EU and EEA regulated markets will be obliged to prepare and publish their annual financial reports in accordance with the ESEF Regulation. We have summarised for you, what this means in detail.

Background: regulation of European financial markets

The European Union is continuing to implement the Transparency Directive / EU Directive 2013-50-EU of 22 October 2013 on the regulation of European financial markets.

On 18 December 2017, the European Securities and Markets Authority (ESMA) published the final draft for the development of technical regulatory standards (RTS), laying the foundation for a new reporting format that is uniform across the EU: the European Single Electronic Format (ESEF).

The aim is to

  • increase transparency in EU and EEA regulated markets,
  • make financial reports comparable regardless of language, structure and format,
  • to enable investors, public authorities and issuers to carry out automated analysis of financial information.

On 20 September 2019, the Federal Ministry of Justice and Consumer Protection, together with the Federal Ministry of Finance, prepared a draft bill (RefE) to implement the amendments to the EU Directive 2013/50/EU with regard to ESEF and sent it to the participating associations for information and comments. The main content of the RefE is amendments to the commercial law requirements for reporting by capital market-oriented companies. In addition, the draft of the bill contains proposals for regulations to also make electronic documents the subject of disclosure, auditing and balance sheet control.

Objective of the ESEF Regulation: Comparability and Transparency

The aim of the ESEF Regulation is Europe-wide comparability and increased transparency. The taxonomy specifies the scope of a financial report down to the last line. Turnover and profit are thus in the same place for a company from Germany as for issuers from Austria or Italy – regardless of the reporting language or industry of the company. This is intended to considerably simplify the work for analysts, investors and auditors. Since the line contents are clearly defined, they no longer have to deal with different definitions of certain key figures. For example, analysis software can be used to quickly analyze and compare a large amount of financial information.

It can be critically questioned to what extent it makes sense to compare companies with each other across industries.

The most important questions & answers on ESEF


Across Europe, this affects approx. 7,500 companies. Approximately 5,300 of these have to tag their IFRS consolidated financial statements as part of the annual financial report.

Further financial reports (e.g. annual financial statements according to HGB) can be labelled with XBRL tags if a corresponding taxonomy is provided in the respective member state. For Germany, XBRL Deutschland e.V. provides an e-balance sheet taxonomy that can be used for this purpose.


Yes, if the components are already disclosed (Section 114 (2) Securities Trading Act) in accordance with commercial law, there is no obligation to publish an annual financial report.



All annual financial reports for financial years beginning on or after 1 January 2020 must be published in Extensible Hypertext Markup Language (xhtml) format. Both annual financial statements and consolidated financial statements are affected.




No. However, for financial years beginning on or after 1 January 2020, only the “main financial statements” such as balance sheet, income statement, cash flow and statement of changes in equity need to be labelled. In addition, 10 disclosures from the notes must be labelled. These include key information on the company such as name, registered office, legal form, etc. According to Art. 4 No. 3 of the ESMA draft, the use of additional tags is optional.

For fiscal years beginning on or after January 1, 2022, the scope of the disclosure requirement is extended to include notes to the consolidated financial statements (234 additional information to be tagged).



As of January 1, 2020, companies will be required to report in an XML language and the inline eXtensible Business Reporting Language (iXBRL). All figures and information in the financial statements will be provided with a standardised label (tag). These tags follow a clearly defined IFRS taxonomy, presented in the iXBRL language. It enables IT systems to read out annual financial statements/consolidated financial statements semi-automatically and process information further. A comprehensive ESEF taxonomy is provided for this purpose. In addition, this format can be opened and displayed in any standard browser just like a website. Thus, an XHTML financial report can be designed and graphically prepared like a print PDF file according to the issuers’ wishes.

Companies that are included in the IFRS consolidated financial statements of a capital market-oriented company should check at an early stage whether and to what extent financial statements or accounting systems are provided with XBRL tags. In this context, extensions of the taxonomy by the parent company are of interest.


The ESEF taxonomy is based on the IFRS taxonomy of the IFRS foundation. However, it is based on the legal status approved by the European Commission. In view of the experience with the IFRS taxonomy, frequent changes and additions to the ESEF taxonomy are to be expected. Issuers are therefore well advised to implement processes that ensure that taxonomy and technical standards are always up to date and that innovations at all levels are incorporated into the accounting system. When linking with other systems (e.g. e-balance sheet), attention should also be paid to interdependencies. In this context, higher running costs are to be expected.



The IFRS taxonomy is available on the website of the International Accounting Standards Board (IASB). The corresponding taxonomy for ESEF is available on the ESMA website.



A direct transmission of the financial statements to ESMA is not planned. The national business registers will remain in place. There will also be a central European register with reference to the national registers (European Electronic Access Point).


According to the wording of Art. 4 para. 1, the object of the Transparency Directive is the publication of annual financial reports. The preparation of the report and the preparation of the individual components are not addressed. However, the audited (consolidated) financial statements and (consolidated) management report are declared components. The ESEF-RefE resolves this ambiguity by moving the requirements of the ESEF obligation forward to the statement. Thus, the mere transfer of audited financial information into electronic form, but also the control of content by a third party, is ruled out. The legislator follows the assumption that the EU Commission is obliged to audit financial statements. However, this is not to be found in the ESEF Regulation itself, but only in the accompanying Q&As. Since digital reporting will in future be tied to the preparation of the financial statements, the auditors and the supervisory board must assess the accuracy of the tagging.


The ESEF Regulation involves considerable expense for issuers. The costs for the conversion should therefore not be underestimated. The cost depends very much on whether issuers implement the tagging etc, themselves or commission a service provider to do so.

The in-house solution is associated with high initial costs for the purchase of the corresponding software, but also for the expansion of personnel in accounting/investor relations. With the external solution, the initial costs are significantly lower, but there are fees for the transfer to the ESEF format for each transaction.


With the decision to implement the ESEF obligation in-house, companies are pushing ahead with digitization in-house. This initially requires a high initial investment in appropriate software and system adaptations. In addition, running costs will rise due to the increase in personnel in accounting/investor relations. However, once everything has been implemented, ESEF’s requirements can be implemented semi-automatically, significantly reducing manual effort and error sources. It is also important to make this decision in the context of the group!

To commission a service provider means to initially keep the effort in your own company low. Experience with the IFRS taxonomy shows that frequent changes and additions to the ESEF taxonomy are to be expected. Issuers must ensure that the taxonomy and technical standards are always up to date and that innovations at all levels are incorporated into the accounting system. This effort is considerable and probably not affordable without additional manpower in accounting/investor relations. By commissioning a service provider, this risk is outsourced. In addition, the initial investments and additional burdens for accounting, IT and investor relations are significantly lower. However, the issuer has less control over the creation process. Here, too, the decision must be coordinated with that of the parent/subsidiary if the issuer belongs to a group.


The step towards greater transparency and comparability is generally met with approval. Nevertheless, there is plenty of criticism of the implementation:

Representatives of small and medium-sized issuers fear that they will reach their limits with their limited financial and human resources. This raises the question as to whether the information gain for the addressees actually justifies the additional effort.

The German Accounting Standards Committee e.V. (DRSC) criticizes the susceptibility to errors in the implementation of XBRL tags in XHTML files with regard to the machine-readability of information. If no automated checking mechanisms were implemented to eliminate decimal and sign errors, the benefits of the new reporting format would be questioned.

The criticism of the Institut der Wirtschaftsprüfer (IDW) is directed above all, against the planned adaptation of the German right and here above all of the HGB to the ESEF obligation. The implementation of the draft would interfere with fundamental obligations under commercial and company law and would give rise to a large number of open questions both for the companies concerned and their executive bodies themselves and for the respective auditors. The IDW considers a positioning of the format specifications from ESEF within the HGB regulations for the preparation of the components of the annual and consolidated financial statements to be systematically inappropriate. In its statement of 15 October 2019, it justified this by stating that this was a matter of capital market law. The requirements should therefore be anchored in securities trading law. There, the auditor should also be obliged to give a separate opinion on the regularity of the ESEF formatting as part of the process of publishing the annual financial report following the preparation, adoption and approval of the financial statements.

In the IDW’s view, defining the formatting as part of the preparation and not the disclosure process of the annual financial reports also raises many questions. Proven processes for the preparation, audit, adoption and approval of financial statements would have to be changed. This could impair the reliability and timeliness of capital market communication.