EBA allows banks to use IAS 1 or IFRS 18 for regulatory profit and loss reporting during 2027 transition

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IFRS 18 transition reporting

Highlights

Institutional filers can choose either IAS 1 or IFRS 18 for regulatory profit and loss reporting from January 2027 until revised technical standards apply.
Significant institutions may use IFRS 18-aligned FINREP templates published in EBA technical package version 4.4, Phase 1, on a voluntary basis during the transition.
National competent authorities will collect data on selected reporting options, supporting ECB's supervisory streamlining agenda until new standards fully take effect in late 2027.

Transition reporting option for 2027

As reported by ECB Banking Supervision, citing the European Banking Authority, institutions will have the option from January 2027 to submit regulatory templates under either IAS 1 or IFRS 18 until the amended implementing technical standards begin to apply. The approach follows the EBA Opinion published on 8 July 2026 and is intended to ease the operational burden of maintaining two separate profit and loss presentation formats during the transition.

The arrangement covers both significant and less significant institutions, although less significant institutions can use the option only if their national competent authorities permit it within their jurisdictions. Significant institutions within the scope of the EBA's ITS will also be able to use IFRS 18-aligned FINREP templates published by the EBA in technical package version 4.4, Phase 1, on a voluntary basis.

Supervisory impact across the banking sector

The same flexibility also applies to significant institutions subject to the ECB FINREP Regulation, which is to be amended to reflect the changes introduced by IFRS 18. Until then, institutions subject to that regulation may use the EBA Opinion together with Annex A or Annex B, as applicable, for further guidance.

For supervisors, the temporary choice is designed to support the broader ECB reform agenda of streamlining supervision while safeguarding resilience. National competent authorities are to collect information from institutions on which reporting option they choose, helping supervisors manage the transition before the revised standards take effect later in 2027.

Our earlier coverage of Bangladesh’s proposed IMF loan programme outlined negotiations for a $4.5 billion to $5 billion package tied to stronger tax collection and financial-sector reforms. We noted the IMF’s focus on lifting revenue mobilisation from a very low 7% revenue-to-GDP ratio, maintaining a contractionary monetary stance to curb inflation, and implementing reforms to stabilise banks and strengthen macroeconomic resilience.

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