ESMA has updated the ESEF Reporting Manual to include clarifications on block tagging.
The European Securities and Markets Authority (ESMA) has published the annual update to its ESEF Reporting Manual, at the end of August.
Block tagging is the new mandatory practice for 2023 which requires reporters to block tag the notes to IFRS consolidated financial statements, as part of the ESEF regulatory technical standards. As such, the notable change this year is the new guidance issued on block tagging.
Section 1.9 of the manual is dedicated to block tagging and provides some specific guidance. Key clarifications in this section are around the level of granularity required, and multi-tagging:
- When a disclosure of the notes corresponds to more than one mandatory block tag of different granularity, preparers should use each of them and multi-tag the disclosure with the tags that correspond with their underlying account meaning. Titles and headers have to be tagged also (section 1.9.1).
- When some disclosures of a table, placed on specific rows or columns, are concerned by a tag that has a narrower level of granularity that the rest of the table, this tag does not have to be applied on the selected rows or columns, but it has to be applied to the entire table (section 1.9.2).
- ESMA confirms that if a disclosure does not correspond to any mandatory tag, such disclosure does not have to be tagged. Nevertheless, it does not limit the issuer to tag such disclosure with a tag that has a higher level of granularity, and the preparer can also apply a tag from the rest of the taxonomy (a tag that is not included in the mandatory tag list) if the underlying accounting meaning fits with it. If no tag seems to correspond in the whole taxonomy, preparers can also create an extension element to block tag such a disclosure.
Issuers are expected to follow the reporting manual guidance when preparing their 2022 annual financial reports (AFR) in ESEF. Software developers are also expected to follow the guidance when creating software to enable the production of AFRs in line with the reporting requirements and Inline XBRL.
XBRL International, Europe and UK are currently discussing the method of block tagging chosen by the ESMA, and hoping to coordinate potential communications with them on the topic. To help preparers understand block tagging best practices, we will provide further information with practice cases during the coming weeks.
You can find more information on what block tagging entails and get your top questions answered, in our block tagging FAQ article.
View the updated reporting manual here.