UK’s FCA provides guidance on submitting XBRL reports
The Financial Conduct Authority (FCA) has recently released two key pieces of updated guidance on structured reporting for issuers in the UK using the Inline XBRL-based European Single Electronic Format (ESEF). This will be mandatory from 1 January 2022 for some companies (using either ESEF taxonomies or the UK’s UKSEF equivalent).
The ‘Submitter User Guide for the National Storage Mechanism (NSM)’ deals with how to upload information to the NSM, the FCA’s new repository to which filers are required to submit their annual financial reports (AFRs). It might appear to be rather dry – if useful – reading, but it contains some important details. In addition to final reports, the NSM also permits test submissions allowing users to validate their tagged digital data and receive any errors or warnings.
This ability to check and correct data quality is particularly useful for issuers that are relatively new to XBRL. However, the guidance specifically prohibits the submission of anything that might be considered insider information. This suggests that companies currently working on their reporting processes and wanting to get ahead in testing their outputs for quality and ESEF compliance can and should do so as soon as possible – and that the best path to take is a dry run using last year’s AFR rather than any current data.
And just how should issuers go about preparing their submissions? That’s covered in the ‘Technical Guidelines for the Preparation and Submission of Structured Annual Financial Reports to the FCA.’ This contains essential information on the structure and format of report files, of which software vendors in particular will need to take careful note.
In November, the FCA and the Financial Reporting Council (FRC) wrote to CEOs reminding them of their obligations in terms of structured reporting and setting out expectations on quality – providing, in our opinion, useful clarity on what needs to be done. This latest guidance is part of making the how equally clear.
