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There is no exaggeration in saying that digitalization revolutionizes company`s operations and the future of reporting. The pandemic made the connection between the digital technologies and processes in company law more important than ever.

Digital tools and data standards like XBRL and iXBRL are coming together to reshape data reporting, quality and comparability to improve the communication between data filers and data users (business registries, financial sector regulators, investors).

Trusted means competitive

The European Union is on the path of digitising company laws and corporate data flows, pursuing coordinated initiatives to strengthen capital markets’ union. The initiatives are to improve accessibility of data and leverage the value of comparable and standardised data for market participants, including investors seeking investment opportunities and companies seeking growth opportunities across EU borders.

The accessible, transparent and comparable data landscape will translate into benefits in the region’s competitiveness and innovation. The legal environment adapted to the challenges of a digitalized world is crucial to support these goals. Therefore, the European Commission launched its new Company Law Package.

Simply put, the EU company law initiative aims to:

  • improve transparency on EU companies by making more information available on a cross-border basis
  • enable the cross-border use of trustworthy company data
  • further modernize EU company law rules to make them fit for the digital age.
Consequently, digital reporting enters the picture as a key enabler of greater business transparency.

European Commission outlines the positive impacts of the introduction of digital reporting in a range of jurisdictions. These positive impacts are seen among others in lowering the cost of equity capital and stock liquidity, greater access to bank funding, the timeliness of audit reports, and reduced audit fees.

To increase the transparency of information the EU has already made substantial steps in digital reporting by introducing the Inline XBRL-based European Single Electronic Format (ESEF). It started to operate from 2020 and the first experience of countries is shared below.

ESAP is the next game changer. Past year the European Commission adopted a legislative proposal on the European Single Access Point (ESAP) which is set to go live in 2024.

ESAP is likely to extend the application of ESEF to non-financial information. It will offer easy, centralised and digital access to companies’ financial and sustainability-related information about EU companies. No wonder market players have already hailed it as a long waited “one-stop shop” function to EU companies and investors.

If you would like to learn more about our contribution this and similar projects focused on data standardisation and digitisation, get in touch with our experts – contact us.

Meet us also at the CRF Annual Conference which will be held by Corporate Registers Forum in Maldives, from September 21– 24. The transformation of access to corporate data and the future of digital and interoperable business registries will be among the topics presented.

See the agenda to explore what CRF Conference has to offer this year