European Commission issues new rules to support digitalization of companies’ financial reports

At the end of May 2019 the European Commission issued a new regulation (EU 2018/815) to support digitalization and transparency of companies’ financial statements. The European Commission put forward the new rules with a view to supporting the digitalisation of corporate reporting and to achieving greater transparency of the yearly information disclosed by companies listed in the EU capital markets. The new European Single Electronic Format (ESEF)  is intended to make companies’ financial records more readable and accessible. Under the new rules, from January 2020, all listed companies in the European Union will need to finalise their annual financial reports using up-to-date digitalised business reporting systems (XHTML and iXBRL) which improve accessibility, and make the information much more user-friendly. 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.

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