On Friday 6 November, the European Commission published an interpretative communication to clarify certain aspects of application of the European Single Electronic Format (ESEF) that all companies listed on a regulated market in the EU will have to use from 2021 onwards in order to prepare their annual financial reports (see EUROPE 12266/26).
Companies will be required to finalise their annual financial reports using the XHTML(‘eXtensible HyperText Markup Language’) format. Where annual financial reports contain consolidated financial statements in IFRS, they must be marked up in accordance with XBRL (‘eXtensible Business Reporting Language’), in accordance with the IFRS taxonomy. Having data labelled in this way will make companies’ financial documents more readable and accessible, according to the Commission.
At the request of a number of stakeholders, the Commission has adopted this document in order to clarify a number of provisions, particularly regarding the auditing of annual financial statements, the use of electronic signatures and the responsibilities and liabilities of issuers.
The communication also clarifies that EU law requires statutory auditors to provide an audit opinion on whether the financial statements included in annual financial reports comply with the relevant legal requirements set out in the ESEF regulation.
In addition, according to the document, EU law does not prevent issuers or statutory auditors from using an electronic signature to sign annual financial reports, accompanying documents or audit reports.
In the absence of specific rules applying at national or regulated market level, issuers or auditors may apply their preferred option, i.e. a handwritten or electronic signature, says the Commission.
The interpretative communication can be found at: https://bit.ly/3685XTz (Original version in French by Marion Fontana)