ECB

Medium Impact

ECB confirms transitional FINREP option to report profit and loss under IAS 1 or IFRS 18

Published

Oct 15, 2026

Effective

Jan 1, 2027

Topics

FINREP, IFRS 18, IAS 1, Regulatory reporting, Profit and loss presentation, EBA ITS, ECB FINREP Regulation

Executive Summary

The ECB has confirmed a transitional reporting option for profit and loss regulatory reporting as IFRS 18 replaces IAS 1 for presentation of financial statements. IFRS 18 takes effect on 1 January 2027, while amended EBA implementing technical standards incorporating IFRS 18 are expected to apply only from the September 2027 reference period. During the gap, significant institutions within the EBA ITS scope may voluntarily use IFRS 18-aligned FINREP templates from the EBA technical package version 4.4, Phase 1, instead of continuing with IAS 1-based templates. The same flexibility will apply to significant institutions subject to the ECB FINREP Regulation, which the ECB says will be amended. Less significant institutions may use the option only where their national competent authority permits it. NCAs will collect information on each institution’s chosen option. The change is operationally important for reporting, finance, data lineage and controls teams because firms must select, document and consistently apply a reporting basis during the transition.

What Changed

newTransitional choice between IAS 1 and IFRS 18

Without this ECB statement, institutions faced potential operational pressure to maintain both IAS 1 and IFRS 18 profit and loss formats before amended ITS application.

New

From January 2027 until amended EBA ITS begin to apply, significant institutions may choose either IAS 1 or IFRS 18 for the relevant regulatory templates.

modifiedUse of EBA technical package version 4.4, Phase 1

FINREP reporting templates reflected the prior IAS 1 presentation structure for profit and loss.

New

IFRS 18-aligned interim FINREP templates may be used voluntarily during the transition.

modifiedECB FINREP Regulation institutions included

Institutions subject to the ECB FINREP Regulation followed the existing ECB FINREP framework.

New

Pending amendment, those institutions may refer to the EBA Opinion and the ECB press release annexes for applicable interim guidance.

modifiedNCA discretion for less significant institutions

The ECB announcement does not state a uniform direct option for all less significant institutions.

New

Application to less significant institutions depends on NCA permission in the relevant jurisdiction.

newCollection of chosen reporting option

No collection mechanism is described in the announcement for a chosen IAS 1 or IFRS 18 reporting basis before this transition.

New

Institutions should expect to inform or be asked by their NCA which option they have chosen.

Business Impact

Who is affected

Directly affected

significant institutions within the scope of the EBA ITS, significant institutions subject to the ECB FINREP Regulation, and less significant institutions where the relevant NCA permits use of the option.

Indirectly affected

group regulatory reporting teams, finance/accounting policy teams, data management teams, internal controls, external reporting vendors and software providers supporting FINREP production.

Jurisdictions

Euro area banking union jurisdictions supervised through the Single Supervisory Mechanism, EU jurisdictions applying EBA FINREP ITS, subject to the scope of the relevant reporting framework, National jurisdictions of less significant institutions where NCA permission is required

Business processes

FINREP production and submission governance, Profit and loss template mapping, IFRS 18 accounting policy implementation, Regulatory reporting change control, NCA communication and evidence retention, Data quality controls and reconciliations

Estimated effort

Medium

Compliance risk

Medium

Affected Reports

FINREP template F02 / equivalent interim template F02.01ECB FINREP template F16.01 / equivalent interim template F16.01.1ECB FINREP template F16.03 / equivalent interim template F16.03.1ECB FINREP template F16.04 / equivalent interim template F16.04.2Annex IV and Annex V ECB FINREP data-point lists for template F02

Field	Validation rule
F02 data points in Annex IV of the ECB FINREP framework	Replaced by data points listed in worksheet “2.1 (Annex IV) DP 2027” in the templates file where the IFRS 18 option is used.
F02 data points in Annex V of the ECB FINREP framework	Replaced by data points listed in worksheet “2.1 (Annex V) DP 2027” in the templates file where the IFRS 18 option is used.
F02	For simplified and oversimplified ECB FINREP frameworks, the equivalent interim IFRS 18-aligned template is F02.01.
F16.01	For the ECB FINREP framework, the equivalent interim IFRS 18-aligned template is F16.01.1.
F16.03 and F16.04	For the ECB FINREP framework, the equivalent interim IFRS 18-aligned templates are F16.03.1 and F16.04.2 respectively.

Recommended Actions

7 suggested next steps· derived from source analysis

1
AI generatedStep 1 of 7
Decide whether to use IAS 1 or IFRS 18-aligned FINREP reporting for the transition period, and document the rationale, governance approval and expected operational impact.
2
AI generatedStep 2 of 7
Confirm with the relevant NCA how and when the chosen option must be communicated, especially for less significant institutions where NCA permission is required.
3
AI generatedStep 3 of 7
Map affected FINREP templates and data points to the EBA technical package version 4.4, Phase 1, focusing on F02, F16.01, F16.03, F16.04 and Annex IV/V F02 data points.
4
AI generatedStep 4 of 7
Update regulatory reporting change logs, data lineage, reconciliations and control documentation to evidence the selected reporting basis.
5
AI generatedStep 5 of 7
Coordinate accounting policy, finance systems and regulatory reporting teams so IFRS 18 implementation and FINREP reporting changes use consistent profit and loss classifications.
6
AI generatedStep 6 of 7
Engage FINREP software or managed service providers to confirm support for both IAS 1-based reporting and IFRS 18-aligned interim templates during the transition.
7
AI generatedStep 7 of 7
Monitor the final amended EBA ITS and the ECB amendment to the ECB FINREP Regulation before the September 2027 reference period.

Timeline

publication

Jul 8, 2026

EBA Opinion published, which the ECB cites as the basis for allowing institutions to choose IAS 1 or IFRS 18 during the transition.

publication

Oct 15, 2026

ECB published press release confirming the transitional reporting option for profit and loss regulatory reporting.

effective date

Jan 1, 2027

IFRS 18 takes effect.

implementation

Jan 2027

Transitional option to report relevant regulatory templates under IAS 1 or IFRS 18 begins from January 2027.

implementation

Sep 2027

Amended EBA ITS incorporating IFRS 18 are expected to apply from the September 2027 reference period.

Sources

AI-generated analysis is based on the following primary sources. Always verify against the official publication.

Press releaseEuropean Central Bank Banking SupervisionOct 15, 2026
Regulatory reporting on profit and loss: institutions will have option to report under IAS 1 or IFRS 18 ↗
https://www.bankingsupervision.europa.eu/press/pr/date/2026/html/ssm.pr261015~9c7bd1ee8e.en.html
Accounting standard information pageIFRS FoundationDate not specified
IFRS 18 Presentation and Disclosure in Financial Statements ↗
https://www.ifrs.org/issued-standards/list-of-standards/ifrs-18-presentation-and-disclosure-in-financial-statements/

Related Evidence

Verified source support for this analysis

The evidence agent checks whether the drafted finding is supported by official publications and relevant public source material.

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