EBA offers IFRS 18 reporting option for interim period
The European Banking Authority has issued an Opinion providing guidance on the implementation of IFRS 18 in supervisory financial reporting. It offers institutions an option for reporting during the interim period from January to September 2027.
Bridging the reporting gap
The International Accounting Standards Board (IASB) issued IFRS 18 in April 2024, aiming to enhance comparability in public financial statements.
This standard was endorsed in the EU in February 2026 and becomes applicable for institutions' public financial statements from January 1, 2027.
However, the EBA's updated Implementing Technical Standards (ITS) for supervisory reporting (FINREP), which incorporate IFRS 18, are not expected to apply until the end of September 2027.
This creates an interim period where institutions must use IFRS 18 for public reporting but the existing FINREP templates for supervisory reporting, potentially leading to inconsistencies and operational burdens.
The EBA's Opinion addresses this gap, providing guidance to competent authorities and institutions to ensure a smooth transition and avoid discrepancies.
An optional reporting path
To mitigate potential operational costs and inconsistencies, the EBA has developed revised FINREP templates and supporting IT solutions, integrated into version 4.4 (Phase 1) of the supervisory reporting framework.
These updated templates incorporate all necessary IFRS 18-adjusted profit or loss data points.
The Opinion advises competent authorities to allow institutions the *option* to use these revised, IFRS 18-compliant templates for reporting profit or loss data during the interim period.
This provides flexibility, enabling institutions to report either under the current IAS 1 framework or the new IFRS 18 standard, thus avoiding the need for parallel reporting systems.
All other reporting requirements of Regulation (EU) 2024/3117 remain in force.
Pragmatic relief for banks
This Opinion represents a pragmatic and necessary step by the EBA to ease the transition to IFRS 18 for financial institutions.
By offering a clear reporting option, it prevents unnecessary operational burdens and ensures data consistency during a complex interim period.
While seemingly technical, this guidance is crucial for maintaining reporting quality and reducing compliance costs across the banking sector.