The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, today publishes an amendment to the European Single Electronic Format (ESEF) Regulatory Technical Standard (RTS) to include the 2025 update of the International Financial Reporting Standards (IFRS) taxonomy.
The updated taxonomy reflects the latest developments in international financial reporting, including the introduction of IFRS 18 ‘Presentation and Disclosure in Financial Statements’ and IFRS 19 ‘Subsidiaries Without Public Accountability’. These standards are currently undergoing the EU endorsement process, expected to be finalised in early 2026.
Preparing for IFRS 18 and IFRS 19
IFRS 18 will replace IAS 1 ‘Presentation of Financial Statements’ and will be effective for annual reporting periods from 1 January 2027, with earlier application allowed. To support a smooth transition, ESMA proposes to include both the existing taxonomy for IAS 1 and the new taxonomy for IFRS 18 in the RTS on ESEF.
Similarly, ESMA is incorporating taxonomy for IFRS 19. While this standard has limited impact on listed companies, it will help digitalise reporting for non-listed subsidiaries, enhancing transparency across the financial reporting landscape.
This approach lets issuers test and learn the new taxonomy before it becomes mandatory, ensuring an easier transition and better preparation for issuers and software vendors.
Implementation timeline
The 2025 taxonomy will become mandatory for annual financial reports covering financial years starting on or after 1 January 2026. Issuers will have the possibility to apply it voluntarily for their 2025 reports if the RTS on ESEF is adopted in time.
Taxonomy elements for IFRS 18 and IFRS 19, contained in the ESEF 2025 taxonomy, may only be used once these standards have been formally endorsed at EU level.
Next steps
The draft RTS has been submitted to the European Commission for approval. As part of its ongoing support for issuers, ESMA will also publish the annual update of the ESEF Reporting Manual in 2025, providing additional guidance on implementation.
