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Could you spot the error in an ESEF filing?

In our first blog post, we discussed the fundamentals of Digital Reporting and their significance.

In this second blog, we will explore the practical aspects of ESEF reporting and using an error we have encountered in multiple filings, illustrate how errors can arise in an ESEF filing.

An ESEF electronic format filing is a zip file containing the XBRL-tagged annual financial report which has both human-readable and machine-readable layers. At the risk of stating the obvious, the human-readable layer is prepared to be read by humans and the machine-readable layer is made available to be processed by computers. Human users will eventually consume the machine-readable layer, but they will use their choice of specialist software or XBRL viewer to present it in the format of their choice. The overarching principle of the reporting mandate is that the machine-readable and human-readable data layers should be equivalent.

But how could the human-readable and machine-readable be different? Let's examine an example for the tagging of earnings per share (EPS). Below are extracts from both the machine-readable and human-readable information. Can you identify the error in the XBRL data?

Picture 1: machine readable format (select the image to see the illustration)

Picture 2: human readable format

The below extract presents the error in the machine-readable information by comparing this to the original human-readable format above:

Picture 3: analogised human readable format

In case you are unable to spot the error, the reported values in the machine-readable information are incorrect as they have units of GBP/share, not pence/share i.e., the first row should be 0.1 instead of 10. As this is a standard tag from ESEF taxonomy, the unit cannot be changed, hence EPS in the machine-readable information must be presented in GBP/share regardless of what units are presented in the human-readable information.

Picture 4: errors in the machine-readable version (select the image to see the illustration)

Most of us would like to think we wouldn’t miss something this obvious in the human-readable version. However, when dealing with substantial amount of data in the machine-readable version, even the most diligent eyes can miss critical details. This error is not an isolated incident: we've witnessed it in multiple filings and, if left uncorrected, can lead to a misstatement by a factor of 100 or more.

In our next blog we will explore the different elements of the tagging requirements in more depth and provide our view on these.

How can we help?

We have expertise in Digital Reporting having provided public assurance for a number of UK filers over the past two years. For issuers with listings on UK regulated markets, we can provide entities with assurance over their ESEF filings using ISAE 3000, including the provision of a public report, equivalent to that provided on mandatory basis in the EU.

To learn more about this topic, please read our first blog on the fundamentals of Digital Reporting and their significance.

For further insights, visit our website.