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The European Single Electronic Format #ESEF | ESMA has decided to postpone its amendment to 2024

The European Securities and Markets Authority (ESMA), the regulatory and supervisory body for financial markets in the EU, has decided to postpone the amendment of the European Single Electronic Format (ESEF) Regulatory Technical Standard (RTS) until 2024. This decision is primarily influenced by the limited changes in the 2023 update of the International Financial Reporting Standards (IFRS) Taxonomy. Throughout 2023, ESMA will monitor the implementation of the ESEF requirements, assess ways to improve digital reporting, and develop the ESEF sustainability taxonomy and associated requirements.

ESMA has made this postponement decision based on the following factors:

  • Limited changes in the 2023 IFRS Taxonomy.
  • The value of increased monitoring of ESEF implementation.
  • The potential impact on preparers and software vendors due to a system update.

During 2023, ESMA will intensify monitoring of ESEF implementation and explore opportunities for enhancing the electronic reporting process. Additionally, ESMA will undertake preparatory work to develop the ESEF sustainability reporting taxonomy and related requirements based on the European Sustainability Reporting Standards Taxonomy, being developed by EFRAG.

According to the ESEF RTS, issuers will still be able to fulfill their regulatory obligations by tagging their 2023 IFRS consolidated financial statements using the 2022 ESEF Taxonomy, which is mandatory for financial years starting on or after 1 January , 2023. Foreign listed issuers are permitted by the US Securities and Exchange Commission (SEC) to prepare their 2023 financial statements in line with both the 2023 and 2022 IFRS Taxonomies.

The ESEF Taxonomy, used for the electronic reporting format of IFRS consolidated financial statements, is based on and extends from the IFRS Taxonomy. The IFRS Taxonomy is updated annually by the IFRS Foundation to incorporate new IFRSs, amendments to existing IFRSs, analysis of common reporting practices, and improvements to its content and technology. ESMA, accordingly, amends the ESEF RTS to reflect the annual update of the IFRS Taxonomy.The 2023 IFRS Taxonomy update includes limited changes related to narrow-scope amendments to two standards (IFRS 16 and IAS 1), which are not mandatory in 2023, as well as general improvements and common reporting practices not directly stemming from the standards.

Next steps:

ESMA will continue engaging with the IFRS Foundation for the 2024 update of the IFRS Taxonomy. The 2023 and 2024 IFRS Taxonomy updates will be combined in ESMA's proposals to update the ESEF RTS in 2024.

In 2023, ESMA will publish the annual update of the ESEF Reporting Manual to provide additional guidance on implementing the ESEF requirements. The manual will also cover voluntary usage of elements from the 2023 IFRS Taxonomy update through other mechanisms, such as extensions.

For inquiries please contact:

RBI Regulatory Advisory

Raiffeisen Bank International AG | Member of RBI Group | Am Stadtpark 9, 1030 Vienna, Austria  | Tel: +43 1 71707 - 5923