ESEF iXBRL Block Tagging Unleashed: Understanding the Shift in Reporting Dynamics

November 29, 2023by Team IRIS CARBON0

The incorporation of ESEF text block tagging stands out as a significant addition to the filing obligations for the forthcoming 2024 reporting cycle within the European Union. Beyond the initial phase, which mandated issuers to tag only the primary financial statements, the second phase of the ESMA ESEF mandate now extends the requirement to encompass tagging all notes to financial statements using block tagging.

This blog post aims to examine the complexities of ESEF iXBRL Block Tagging, shedding light on its importance and offering guidance on adapting to this transformation in the financial reporting landscape.

Understanding Block Tagging

ESMA mandates that all issuers employ XBRL tags for each Notes to account in accordance with the ESEF taxonomy. The   (RTS) on ESEF specify various elements categorized under “TextBlockItemType,” which are used to tag substantial information within the IFRS Consolidated Financial Statements. Each individual note in the financial statements is treated as a distinct fact and is assigned a tag from the taxonomy.

ESEF tagging entails organizing financial information based on the ESEF taxonomy, an extension of the International Financial Reporting Standards (IFRS) for information tagging. This standardized structuring enhances the comprehensibility, accessibility, and comparability of reports. In cases where disclosures pertain to multiple elements with varying granularity, issuers are required to apply multiple tags to align with the underlying accounting significance of the information.

Moreover, the ESEF mandate necessitates issuers to employ “block tagging” for their Notes to account, wherein the entire content of a reported note is tagged to the corresponding ESEF taxonomy element.

ESEF Phase 2 Mandate: The Arrival of Block Tagging Requirements

The directive applies to fiscal years commencing on or after January 1, 2022. The requirement to tag text blocks during the second year of ESEF reporting aimed to streamline the introduction of financial reporting in a machine-readable format. This approach provided issuers with a phased adaptation period to familiarize themselves with iXBRL technology.

Companies Affected by the Shift

ESEF text block tagging is only required for EU-listed companies that prepare IFRS consolidated financial statements.  Companies subject to ESEF requirements must use the mandatory elements listed in Annex II, Table 2 of the ESEF RTS to tag their consolidated IFRS financial statements.

  • Tagging Elements in Annex II – The RTS on ESEF mandates issuers to annotate disclosures corresponding to elements found in Table 1 and Table 2 of Annex II only when these disclosures appear in their financial statements. If these disclosures are absent from the issuer’s financial statements, tagging is unnecessary. Additionally, issuers are not compelled to incorporate these disclosures in their financial statements or indicate their absence solely for the purpose of tagging using elements listed in the tables of Annex II.
  • Granularity of Block Tagging – In specific instances of block tagging for notes, tables may contain various rows and columns. ESMA advises applying the relevant elements to the lowest level of granularity, which is the entire table, rather than selectively tagging specific rows and columns. If a disclosure presents numerical values in tabular format, there is no obligation to tag such data with ‘Monetary Concept’ XBRL tags.

Demystifying Block Tagging

Deciding whether to employ in-line tagging for primary financial statements or opt for text block tagging is a delicate balancing act. While the former generally offers a clear distinction between right and wrong choices, the latter introduces a subjective dimension.

For issuers, navigating this decision involves a collaborative process with auditors and service providers, requiring consensus on the appropriate content for each text block tag. This collaborative effort often entails extensive discussions, underscoring the importance of a deep understanding of both the tags and the financials—an aspect we will explore further.

Now, let’s address validation. Adding another layer of complexity, validating in-line tagging of primary financial statements and numerical elements differs significantly from validating text block tagging. Without delving into technical details, the key point is that validating the content of a text block tag poses a challenging task for validation software. Unlike its numerical counterpart, ensuring the suitability of text block content is a human-driven process. Initially, the responsibility lies with the preparers, followed by the auditors.

It is crucial to highlight that relying solely on software for validation, or being swayed by vendors claiming seamless task handling, may result in unpleasant surprises. In the realm of financial reporting, the human touch remains indispensable for ensuring the accuracy and appropriateness of text block content.

 IRIS CARBON® for ESEF Reporting

To thrive in the era of ESEF iXBRL Block Tagging, organizations can adopt proactive strategies. This may include investing in software tools that simplify tagging processes, staying abreast of regulatory updates, and fostering a culture of continuous improvement in financial reporting practices. Software solutions like IRIS CARBON®’s ESEF iXBRL reporting solution is tailored to alleviate these pressures. From creating annual reports with updated narratives to expert XBRL tagging that retains your report’s stylization, every step is streamlined for precision.

The platform ensures ESEF compliance and enhances data quality and presentation. With built-in validation tools, an inclusive review process, and end-to-end submission assistance, IRIS CARBON® prioritizes accuracy, quality, and ease. Dive deeper into our complete ESEF reporting guide to unlock the full benefits of partnering with us.


Remaining well-informed about the latest developments in ESEF is essential within the dynamic financial reporting landscape of Europe. Recent modifications by ESMA highlight the significance of adaptability and readiness for issuers. By incorporating insights and updates from the ESEF Reporting Manual, companies can not only ensure compliance but also improve the clarity of their financial narratives.

As we approach 2024, staying attuned to these significant changes becomes crucial for businesses aspiring to achieve transparent, accurate, and seamless reporting within the European framework.

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