ESEF Uncertainty: Get Ahead Regardless of the Outcome
The impact of COVID-19 on the EU capital markets has prompted the European Council to consider a possible postponement of the ESEF. So what does this mean for all those issuers across the European Union?
As it stands at the moment, you may have more time to file your ESEF annual report—although on the other hand, you may not! What do you do in these times of ongoing uncertainty?
Here are six steps you can take now to help you cope. And, keep an eye out for part two of this blog—when we see some of that uncertainty come into focus.
1. Control your environment
In times of uncertainty, you need to control your environment, and control usually goes hand in hand with preparation. So, take a little time to look at your controls. Do they work? Look inwardly at your workflow and outwardly at your solution suppliers. Are both sides of the coin ready for any circumstances?
2. Review your process
Have a look at the impact on your process. Is it efficient? What are the stress points when there is uncertainty as to the required outputs? Can your process and software cope if there are late changes? With a better understanding of where the inefficiencies or areas of concern lie, you will be in a better position—whatever the outcome.
3. Review benefits of different platforms
Regardless of regulation, ESEF has made everyone think differently—by thinking electronically. Annual reports are primarily created in publishing software developed for print and saved to a format that is also developed for print. Ironically, print numbers are rapidly dwindling! Instead, use this time to look at the benefits of multi-authoring platforms, which allow you to generate content in different formats from the same source.
4. Prepare for additional requirements
The iXBRL® tagging requirement of the initial ESEF mandate is just the start. Block tagging is close on the horizon, but other taxonomies will quickly follow. Take time now to make sure your process can adapt to additional requirements without added workflow adjustments. If you future proof now, tomorrow will be so much easier.
5. Take a step back
If you rushed to make a decision for the ESEF, then this might be time to take a step back. Did you make the right decision for your business, or did you make it due to time restraints needed for research or implementation? You might be able to turn back time, which would provide you with the opportunity to review your decision and make sure that you selected the best option to produce a result your company will be proud of.
6. Think about your investors
Finally, have you thought about how your investors may be reacting? How will you make sure they are prepared and able to work with XBRL® data—or be ready for a delay? Most regulators have emphasised communication with investors as essential, especially if there are any uncertainties around filings!
By following these steps, you will be ready for any period of uncertainty. But what should you do if there is a delay announced for your jurisdiction? The first step is to scroll down to subscribe to this blog and make sure you don't miss the next article in this series.
iXBRL® and XBRL® are trademarks of XBRL International, Inc. All rights reserved. The XBRL® standards are open and freely licensed by way of the XBRL International License Agreement.
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