The Department of Business, Energy and Industrial Strategy (BEIS) has published a policy paper outlining its position on the directors’ sign-off of accounts for companies that are subject to the requirements of the Transparency Directive and the EU Delegated Regulation on the use of the European single electronic format (ESEF).
Under the Transparency Rules (DTR 4.1.14R) issuers must, for financial years beginning on or after 1 January 2020, publish their accounts in ESEF. Under the ESEF requirements, companies will have to issue their annual reports in Extensible Hypertext Mark-up Language (XHTML), and IFRS consolidated financial statements contained in annual reports will have to be marked up using extensible business reporting language (XBRL). XBRL is an electronic language that enables both machine and human readability in one document. The format, and tagging, is designed to allow for software analysis.
BEIS is of the view that:
- ESEF tagging is not relevant when the directors consider whether company accounts have been prepared in accordance with the Companies Act 2006 and are “true and fair”. The tagging can be applied to a later version of the accounts; and
- companies may choose to create a single filing, or create a tagged document once the annual report has been completed in paper format. In each case, the directors’ confirmation relates to the human-readable version of the annual report and not the iXBRL tagged data.