The European Central Bank (ECB) has confirmed a temporary reporting choice for institutions ahead of the introduction of IFRS 18.
The accounting standard, which changes the presentation of profit and loss items, takes effect on 1 January 2027.
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However, the European Banking Authority’s (EBA) amended implementing technical standards, incorporating IFRS 18, are expected to apply only from the September 2027 reference period.
Institutions may therefore submit regulatory templates under either the existing IAS 1 framework or IFRS 18 from January 2027 until the amended standards apply.
The ECB said the arrangement follows an EBA opinion published on 8 July 2026. It is intended to avoid requiring institutions to maintain two separate profit and loss reporting formats during the interim period.
Significant institutions within the scope of the EBA’s technical standards may voluntarily use IFRS 18-aligned financial reporting (FINREP) templates issued in the EBA’s version 4.4 technical package, Phase 1.
The option also covers significant institutions that are subject to the ECB FINREP Regulation, which will be amended to reflect IFRS 18.
Less significant institutions can use the flexibility only where their national competent authorities (NCAs) allow it.
NCAs will collect information on the reporting option chosen by each institution.
In February this year, the UK’s Financial Reporting Council approved changes to FRS 102, updating the rules that govern how companies may reshape the layout of their balance sheets and profit and loss accounts in their annual reports.
The updated standard aims to let entities use presentation options under company law while keeping the reporting framework relevant and informative for users.
The update has been drafted to keep presentation requirements broadly aligned with International Financial Reporting Standards (IFRS), following the issue of IFRS 18, Presentation and Disclosure in Financial Statements.
