Descriptive Evidence on the European Implementation of XBRL agging of the Notes to Financial Statements

Since the financial year 2022, listed companies in the European Union are required to mark up the footnotes to their consolidated financial statements using a selection of tags from the IFRS taxonomy included in the European Single Electronic Format (ESEF). Using descriptive statistics and examples from 2,086 ESEF reports, we note issues in the implementation of the block tagging approach adopted for ESEF. In particular, we highlight the underutilization and heterogeneous use of tags and we document instances of tagging errors. We find limited use of tags not included in the IFRS taxonomy (extension tags). While some tagging issues may disappear as a result of learning and greater effort, other issues result from ambiguities in the taxonomy, in particular the prevalence of common practice elements with insufficient specification. We offer suggestions to both ESMA and the IFRS Foundation in the light of ESMA’s 2024 consultation on expanding footnote tagging to the use of the full IFRS taxonomy.