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FRC’s Response to IFRS Taxonomy Update 2025 - Proposed Update 1 General Improvements
Financial Reporting Council
Linda Mezon-Hutter IASB Acting Chair IFRS Foundation Columbus Building 7 Westferry Circus Canary Wharf London, E14 4HD
24 August 2026
FRC Consultation response to IFRS Taxonomy Update 2025-Proposed Update 1 General Improvements
Dear Linda,
I am writing on behalf of the UK's Financial Reporting Council (FRC) in response to the above consultation.
As the UK regulator responsible for corporate reporting, we play a central role in both the development and maintenance of UK digital reporting taxonomies and the promotion of high-quality digital reporting through the Digital Reporting Quality Reviews and broader corporate reporting oversight activities. Through our responsibility for maintaining the UK taxonomies used by ESEF and UKSEF filers, engagement with preparers, software providers and other stakeholders, and our review of listed company annual reports and accounts, the FRC has developed significant insight into taxonomy design, tagging behaviours, implementation challenges and the practical use of structured financial data by regulators, investors and other users.
The views expressed in this response are informed by this experience, including observations arising from taxonomy development and maintenance activities, digital reporting quality reviews, and the FRC's assessment of corporate reporting practices. As such, the response focuses on the likely practical implications of the proposals for taxonomy usability, implementation, data quality, comparability and digital consumption. We have not performed formal field testing of the proposed changes, nor on structured testing by preparers, software vendors or end users.
The FRC broadly supports the IFRS Foundation's proposed changes to the IFRS Accounting Taxonomy 2027, considering them a positive step towards improving the clarity, consistency, usability and machine-readability of structured digital reporting. We welcome the introduction of clearer text block categorisation, the rationalisation of narrative elements, and a range of structural taxonomy enhancements that should simplify taxonomy navigation, reduce tagging complexity and promote more consistent reporting outcomes.
We would like to emphasise the importance of maintaining data continuity, comparability and traceability through comprehensive mapping between deprecated and replacement elements, detailed implementation guidance and practical transition support for preparers, regulators and software providers. We also encourage further alignment between the IFRS Accounting Taxonomy and IFRS Sustainability Disclosure Taxonomy, continued consideration of the needs of automated analytics and AI-driven data consumption, and post-implementation review of the proposed changes to ensure they deliver their intended benefits in practice.
We welcome the opportunity to continue to work with the Board and staff in developing the taxonomy. If you would like to discuss these comments in more detail, please contact Phil Fitz-Gerald ([email protected]).
Yours sincerely,
Mark Babington Executive Director, Regulatory Standards DDI: 020 7492 2323 Email: [email protected]
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Question 1 - Categorising text block elements
- Do you agree with the Foundation’s proposals to categorise text block elements into four distinct types—namely ‘note’, ‘policy’, ‘table’ and detailed text block elements—and to amend the element labels of ‘note’, ‘policy’ and ‘table’ text block elements to reflect those categories (paragraphs 9–19)?
- Do you agree with the Foundation’s proposals to:
If not, please specify what changes you suggest instead and why.
- amend the documentation labels for all ‘note’, ‘policy’ and ‘table’ text block elements by adding a prefix, and to introduce guidance labels for all ‘note’ and ‘policy’ text block elements (paragraph 20); and
- introduce parent-child relationships between closely related ‘note’ text block elements and ‘policy’ text block elements in their respective presentation groups (paragraphs 21–27)?
The FRC supports the IFRS Foundation’s objective of improving the clarity, consistency and usability of text block elements within the IFRS Accounting Taxonomy. We welcome the proposal to categorise text block elements into four distinct categories: [note text block], [policy text block], [table text block] and [text block]. We hope this approach has the potential to improve the identification and selection of appropriate elements for specific disclosures, thereby supporting more consistent application of the Taxonomy. The proposed distinction between complete note disclosures, accounting policy disclosures, tabular or dimensional disclosures and more detailed narrative disclosures may provide a more intuitive framework that aligns more closely with how information is typically structured, presented and consumed in financial reporting. In particular, the introduction of dedicated [table text block] elements may help clarify the treatment of structured disclosures and their relationship to detailed tagging requirements, reducing potential ambiguity where similar labels may currently serve different purposes.
To further enhance the proposal, the FRC suggests consideration of a structured metadata attribute such as key-value property, that explicitly identifies the category of these elements. Such a programmatic indicator would enable software applications, data providers and analysts to distinguish between categories without relying on text parsing of label suffixes, thereby improving filtering, querying, automation and data processing efficiency.
We also support the Foundation’s proposals to amend documentation labels, introduce guidance labels and establish clearer parent-child relationships between related note and accounting policy text block elements. These enhancements should improve the overall structure and navigability of the IFRS Accounting Taxonomy and help preparers identify the most appropriate taxonomy elements for their disclosures. For example, the proposed hierarchy between broader disclosures and more specific child elements should provide greater clarity regarding the intended scope of individual tags while enabling users to locate relevant information more efficiently. While we support the proposed parent-child relationships within note and policy presentation groups, we encourage the Foundation to consider whether additional associations between notes, policies and tables could be represented where such relationships are clear and commonly understood.
Similarly, enhanced documentation and guidance labels, together with the use of “Contrast” references, should assist preparers in distinguishing between similar elements and further promote consistent tagging outcomes.
We note that the proposed deletion of a significant number of narrative and explanatory concepts may create practical transition challenges for UKSEF and ESEF filers. Existing tagging templates, software mappings and review processes often rely on these concepts, and the impact may be particularly significant in areas such as fair value measurement, credit and risk disclosures, IFRS 17, defined benefit pension disclosures, business combinations, leases and revenue disclosures where more judgement may be required. To support implementation, we recommend that the Foundation provides a comprehensive deletion-to-replacement mapping, filer-focused examples and clear guidance on the treatment of comparative information. This would help preparers, software vendors, regulators and users distinguish between changes in taxonomy architecture and changes in the underlying reported information.
We also encourage the Foundation to consider the implications of the proposed changes for data continuity, comparability and machine-based analysis. If one of the objectives of the revised taxonomy structure is to enhance the ability of analytical and machine learning tools to process disclosures, preserving traceability between deprecated and replacement concepts will be important.
Finally, we encourage the Foundation to provide dedicated implementation guidance for preparers, regulators and others responsible for developing entity-specific or jurisdiction-specific taxonomy extensions. Such guidance should clearly explain how the four categories should be applied when creating extension elements to promote consistency across reporting environments. A common and disciplined approach to categorisation will be important to ensure that extension elements remain interoperable and comparable with the core taxonomy. Without such guidance, inconsistent categorisation practices could diminish the benefits of the proposed changes and undermine the ability of users, analysts and automated systems to consume and compare data effectively across entities and jurisdictions.
Question 2 - Applying the revised narrative element policy to narrative elements created under the previous approach
In developing the IFRS Sustainability Disclosure Taxonomy, the Foundation revised its policy for creating narrative elements. Under the revised policy, separate narrative elements are created only for disclosures that are expected to be separately understandable to users without any additional information and readily identifiable in general purpose financial reports. Under the previous approach, a separate narrative element was created for each distinguishable piece of narrative information.
- Do you agree with the Foundation’s proposal to apply the revised policy on narrative elements to existing narrative elements created under the previous approach, and with how the Foundation has proposed to apply that policy, including the identification of elements to be deprecated or retained and the creation of narrative elements that represent a broader concept (paragraphs 28–42)? If not, please specify what changes you suggest instead and why.
- Do you agree with the Foundation’s proposed consequential approaches that would result from applying the revised policy on narrative elements, such as:
If not, please specify what changes you suggest instead and why.
- adding paragraph references from elements proposed to be deprecated applying the revised policy to the broader narrative element that is either retained or newly created (paragraphs 43–46); and
- retaining non-narrative elements—currently included beneath the elements proposed to be deprecated—as children of those broader narrative elements (paragraphs 47–48)?
- Do you have any views on the Foundation’s rejected alternative approach of retaining deprecated narrative elements as non-taggable, abstract ‘context marker’ elements (paragraphs 49–53)? If yes, please specify why you would recommend retaining the deprecated elements as abstract elements or, alternatively, why you would advise against using this approach.
The FRC broadly agrees with the Foundation’s proposal to apply the revised narrative element policy to narrative elements created under the previous approach. We support the principle that separate narrative elements should be created only where disclosures are expected to be both separately understandable and readily identifiable. This approach is more closely aligned with how narrative information is disclosed in practice and consumed by users and establishes greater consistency between the IFRS Accounting Taxonomy and the IFRS Sustainability Disclosure Taxonomy. We agree that a significant proportion of the existing narrative elements are highly granular and provide limited incremental value relative to the complexity they introduce. The proposed use of broader narrative elements should simplify taxonomy navigation, reduce the burden on preparers and support more consistent tagging outcomes.
We also agree with the Foundation’s proposed consequential approaches arising from this policy shift. In particular, we support the consolidation of paragraph references from deprecated narrative elements into broader retained or newly created narrative parent elements. This approach should help maintain the link between taxonomy elements and the underlying disclosure requirements while simplifying the overall taxonomy structure. As a technical enhancement to this referencing approach, we suggest that where references are consolidated under broader parent elements, the taxonomy should utilise more precise sub-paragraph citations where possible. For example, references to specific requirements such as IFRS 18.34(a-b) would provide greater clarity than a generic reference to IFRS 18.34. More granular referencing will improve transparency regarding the scope of broader narrative elements and strengthen traceability between deprecated and replacement concepts.
We support the Foundation’s proposal to retain non-narrative elements beneath broader narrative elements. Retaining nested monetary, numerical, date, percentage, categorical and other structured elements as children of broader narrative concepts is important to preserve the utility of detailed tagging and ensure that key quantitative information remains available for analysis. This approach appropriately balances simplification of the narrative taxonomy with the need to maintain the richness, comparability and analytical usefulness of structured data. We consider the retention of these non-narrative elements to be essential to supporting investors, regulators and other users who rely on detailed tagged information for automated processing and analysis.
To further support implementation, we recommend that the Foundation provide comprehensive mapping documentation between deprecated and replacement elements. Such guidance would assist preparers, regulators, software vendors and data users in understanding the relationship between previous and revised taxonomy structures, facilitate transition activities and support continuity in historical data analysis. We also encourage the Foundation to continue evaluating the impact of reducing narrative granularity to ensure that potentially useful information is not lost for users who rely on detailed disclosures. Consideration could be given to post-implementation reviews, user feedback exercises or targeted field testing to assess the practical effectiveness of the revised approach.
The FRC also strongly supports the Foundation’s decision to reject the alternative approach of retaining deprecated narrative elements as non-taggable abstract “context marker” elements. While such an approach could provide some additional navigational support and assist in identifying disclosure requirements, we agree that the associated disadvantages outweigh the potential benefits. Consistent with views previously expressed in ITCG discussions, we consider the retention of abstract elements in this manner to be counterproductive. Introducing non-taggable abstract elements would create significant visual and operational clutter within XBRL preparation software, complicating element selection and increasing complexity for preparers without providing any corresponding downstream data utility. Furthermore, because such abstract elements are not used in the modelling adopted for IFRS 18, introducing them in this context would create unnecessary inconsistency within the taxonomy. We therefore consider the Foundation’s proposed approach to be simpler, more coherent and easier for preparers and users to understand and implement, while also maintaining consistency with the IFRS Sustainability Disclosure Taxonomy.
Question 3 - Other general improvements
Do you agree with the Foundation’s other proposed changes to the IFRS Accounting Taxonomy, including:
- introducing categorical elements under some narrative elements (paragraphs 55–56);
- amending the documentation labels of some narrative elements (paragraph 57);
- creating one text element (paragraph 58); and
- changing the element type of some elements (paragraphs 59–61)?
If not, please specify why
The FRC supports the Foundation’s proposed taxonomy improvements and agrees with the introduction of categorical elements in the limited circumstances identified. Structured elements, such as Boolean and extensible enumeration elements, can improve consistency, comparability and machine-readability where disclosures can naturally be represented through a defined choice or set of choices. We agree that such elements should continue to be introduced selectively and only where the underlying disclosure requirement lends itself to a structured representation.
We also support the proposed enhancements to documentation labels and the increased use of “Contrast” references where these help preparers distinguish between similar or potentially confusing elements. These improvements should improve taxonomy navigation, provide greater clarity regarding the intended application of taxonomy elements and reduce the risk of tagging errors. However, we believe the Foundation could further strengthen preparer support by introducing dedicated guidance elements within the IFRS Accounting Taxonomy, rather than relying solely on documentation labels.
A useful precedent exists within the Financial Reporting Council (FRC) taxonomy, which includes dedicated guidance elements identified by the [guidance] suffix and assigned the custom data type types:guidanceltemType. These elements are modelled as abstract items and therefore cannot be used to tag disclosures in an iXBRL report. Instead, they are positioned at relevant locations within the presentation tree to provide contextual guidance to preparers and reviewers. In practice, they are used to highlight important tagging considerations, provide reminders regarding the use of dimensions, and explain whether and how specific elements should be applied. Introducing a similar mechanism within the IFRS Accounting Taxonomy could provide practical, point-of-use assistance in areas that are commonly misunderstood, improve consistency of application and reduce the likelihood of tagging errors, while maintaining a clear distinction between reportable data and supporting guidance.
Furthermore, we support the proposed changes to element types, including the conversion of Date of grant of share-based payment arrangement from a text element to a date element and the replacement of selected text elements with text block elements where disclosures are frequently more detailed or complex than can be effectively captured through a simple text field. These changes improve alignment between the nature of the information being reported and the underlying taxonomy design, thereby enhancing data quality, consistency and analytical usability. More broadly, ensuring that element types accurately reflect the characteristics of the disclosures they represent will support more reliable tagging by preparers and more effective consumption of digital financial reports by investors, regulators and other stakeholders.
Question 4 - Further changes
Do you have any other comments or suggestions on the proposals to be included in the IFRS Accounting Taxonomy 2027, or any general comments on the IFRS Accounting Taxonomy as a whole that we should consider in future Taxonomy releases?
The FRC encourages the Foundation to continue pursuing alignment between the IFRS Accounting Taxonomy and the IFRS Sustainability Disclosure Taxonomy wherever appropriate. Greater consistency across the Foundation’s digital taxonomies will benefit preparers, regulators, software providers and data users by supporting a more coherent and integrated approach to digital reporting.
To support successful implementation of the proposed changes, we encourage the Foundation to publish comprehensive transition support materials, including detailed mappings between deprecated and replacement elements, implementation guidance and illustrative examples. Such resources would help preparers, regulators, software vendors and data users distinguish between changes in taxonomy architecture and changes in underlying reported information, thereby supporting continuity and comparability throughout the transition period.
We also recommend that the Foundation undertake a comprehensive post-implementation review approximately one year after the initial implementation of the proposed changes. This review should assess the practical application of the revised taxonomy in real-world reporting environments, including the quality and consistency of tagged data, the prevalence of common tagging errors, and the effectiveness of the new taxonomy structures in supporting preparer workflows. Consideration should also be given to how reporting software, validation tools and data consumption platforms have adapted to the changes, particularly in relation to the revised narrative element approach, new text block classifications and other structural enhancements. Transition support and gathering direct feedback from preparers, regulators, software providers, investors and other data consumers after a period of live adoption would provide valuable evidence on whether the proposals are delivering their intended benefits and would help identify areas for further refinement in future taxonomy releases.
Looking ahead, we encourage the Foundation to continue evaluating how the IFRS Accounting Taxonomy supports increasingly sophisticated methods of digital consumption, including automated analytics, artificial intelligence and machine-learning based analysis.
Finally, we encourage ongoing engagement with regulators, preparers, software providers and data users throughout the implementation process. Early identification and resolution of practical challenges will help promote consistent application across jurisdictions and support the effective adoption of the revised taxonomy.