No Match Found
Structured reporting is a hot topic for anyone working on annual reports. New FCA rules require listed companies to publish their annual reports in a machine-readable format. The rules are complex and proving challenging to implement. We can help.
Listed companies need to prepare their annual report in XHTML format, tagged as machine-readable data. Investors and other stakeholders will be able to search the consolidated financial statements using computers as well as the human eye.
The rules we’re talking about are the FCA’s Disclosure Guidance and Transparency Rules (DTR 4.1) which stem from the amended Transparency Directive.
Before making any updates or changes to the way you prepare your annual reports, the first step is to become familiar with the new rules and consider how the shift to structured reporting might affect your company.
Unfortunately not. Tagging consolidated financial statements is different. There are new rules and taxonomies that require new software. You must publish your report four months after the year end (a much tighter deadline than for HMRC). And any errors will be open to public scrutiny rather than a private matter with HMRC.
In time, we expect there will be a mandatory role for the auditor. Already, the FRC has indicated that assurance required by law or regulation would be a permissible service to provide to audit clients. But we haven’t worked out the details yet.
Companies are learning about the requirement and speaking to service providers and their advisers. They might be looking to shorten and simplify their annual reports in readiness for the new requirement. Others are already taking practical steps—like preparing a mapping report to guide their tagging choices, or doing a dry run based on their prior year annual report. Software vendors are speaking with clients about how they can implement new systems and processes to work with iXBRL.
The FCA implemented the requirement in the UK and has added it to DTR 4.1 in the Handbook. In November 2021, the FRC and FCA issued a joint letter to CEOs, reminding issuers of their obligations and highlighting expectations on quality. The Department for Business, Energy & Industrial Strategy (BEIS) has published The UK government’s position on the effect of the ESEF Regulation. The digitisation of financial statements is a global trend and we are not surprised at the level of interest structured reporting is generating in the UK.
For entities with a listing in the UK on the London Stock Exchange, we offer private assurance, using ISAE 3000 as the applicable standard, to audit clients who have already filed their annual financial report in accordance with ESEF and wish to have independent assurance over that filing. This can help you show you have strong processes and controls in place when it comes to the quality of your annual ESEF compliance.
We’ll check the quality of your tagging with our review and recommend service. We’ll detail the appropriate tagging for your disclosures, then compare our tags with yours (including any custom tags) and explain what should change. We’ll suggest which tags will convey the clearest accounting meaning, and take you through the report we produce.
We’ve created three eLearning modules on the ESEF requirements. We explain the rules with examples, addressing areas where experience shows that troublespots can arise. Module 3 covers block tagging and nesting in detail. Common errors and problems that can arise with sign, scale & decimals, and calculations are brought to life using illustrations and knowledge checks. And once you’ve had some practice online, we can run follow-up workshops for the full blended-learning experience.
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Our accountants can map the relevant parts of your consolidated financial statements to tags in the ESEF or UKSEF taxonomy. We’ll produce a tailored mapping report for you. This is your blueprint showing you which tags to choose and where they go, as well as which extensions you need and how to anchor them to the taxonomy. It will help guide your tagging decisions no matter which software you choose.