New EU Requirements For IFRS Financial Statements From 2020

by Ulrika Lomas, Tax-News.com, Brussels

13 June 2019

The European Commission has announced that listed companies that prepare consolidated financial statements using IFRS Standards will be required to tag their primary financial statements using the IFRS Taxonomy for financial years starting on or after January 1, 2020.

The requirement is part of the European Commission's move to the European Single Electronic Format, an electronic format for EU annual financial reports introduced to support accessibility and transparency of financial information.

The new European Single Electronic Format (ESEF), proposed on May 29, 2019, is intended to make companies' financial records more readable and accessible.

Under the new rules, from January 2020 all listed companies will need to finalize their annual financial reports using up-to-date digitalized business reporting systems (XHTML and iXBRL).

According to the European Commission, the move will also facilitate the availability of key financial information in all EU official languages.

In support of these new rules, the European Securities and Markets Authority (ESMA) has prepared an ESEF Reporting Manual and ESEF taxonomy files to help companies in their preparation.

The new provisions build on financial transparency rules already agreed by the European Parliament and member states. They will be updated on a yearly basis to reflect possible updates to the International Financial Reporting Standards (IFRS) taxonomy, which aims to improve communication between preparers and users of financial statements.

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