IFRS and banks: what applies since January 2026, and what is decided before November

Three sets of IFRS amendments endorsed by the European Union have applied to credit institutions’ accounts since 1 January 2026. At the same time, IFRS 18 has already entered its comparative year, and the IASB has pushed back to 30 November 2026 the consultation that will settle the fate of IAS 39 hedge accounting. For a bank finance function, these three workstreams share one timetable.

What already applies to annual periods beginning on or after 1 January 2026

Three texts became applicable in the European Union for annual periods beginning on or after 1 January 2026.

The amendments to IFRS 9 and IFRS 7 on the classification and measurement of financial instruments, issued by the IASB on 30 May 2024, were endorsed by the Commission on 27 May 2025 and published in the Official Journal on 28 May 2025. They cover three matters banks meet daily: how to assess the contractual cash flows of a loan carrying ESG-linked features against the solely-payments-of-principal-and-interest condition; the derecognition date of a financial asset or liability settled through an electronic payment system, together with an accounting policy option to derecognise a liability before the settlement date under specified criteria; and the analysis of non-recourse instruments. In practice, sustainability-linked margin loans absorb most of the analytical effort, since their classification can move from amortised cost to fair value.

The Contracts Referencing Nature-dependent Electricity amendments, issued on 18 December 2024 and endorsed on 30 June 2025, apply from the same date. They deal with physical and virtual renewable electricity contracts: own-use assessment, hedge accounting and disclosures. Banks encounter them mainly as counterparties to corporate power purchase agreements.

Annual Improvements Volume 11, endorsed on 9 July 2025, completes the package for the same effective date.

IFRS 18: 2026 is already the comparative year

IFRS 18, issued by the IASB on 9 April 2024, was endorsed by the European Union on 13 February 2026 and published in the Official Journal on 16 February 2026. It applies to annual periods beginning on or after 1 January 2027, retrospectively, with comparatives restated.

The consequence is a calendar one before it is a technical one: the current year is the one that will be presented as the comparative period in the first IFRS 18 financial statements. Classification choices across the new income statement categories, the treatment of interest income and expense for an entity whose main business activity is providing financing, and the definition of management-defined performance measures are therefore being settled now, not in 2027.

Risk Mitigation Accounting: the consultation that decides what follows IAS 39

In December 2025 the IASB published the Exposure Draft Risk Mitigation Accounting — Proposed amendments to IFRS 9 and IFRS 7. The project answers a familiar problem: banks manage banking-book interest rate risk on a net, dynamic basis, hedging repricing mismatches between assets and funding, whereas the IFRS 9 hedge accounting model works relationship by relationship. Many institutions have kept the IAS 39 hedge accounting requirements for that reason.

Two points deserve the attention of finance and risk functions. First, the Exposure Draft proposes to withdraw IAS 39, so institutions that do not expect to apply the future model are affected just as much as those that do. Second, on 19 May 2026 the IASB extended the comment period to 30 November 2026, aligning it with the deadline for submitting fieldwork results. Institutions managing repricing risk on a net basis are invited to carry out that fieldwork during the consultation. Fewer than four months remain to test the model on real portfolios and to base a response on results rather than on a desk review.

Regulatory watch

• EFRAG, 17 July 2026: updated endorsement status report, confirming the Accounting Regulatory Committee’s favourable vote of 5 June 2026 on IFRS 19 and of 10 July 2026 on the amendments to IAS 21.
• ESMA: consultation open until 12 August 2026 on simplifying selected KPIs under the Taxonomy Disclosures Delegated Act, run in parallel with the consultations of the other European Supervisory Authorities.
• ESMA and EBA: joint consultation on guidelines for assessing the suitability of members of the management body and key function holders under Directive 2013/36/EU and Directive 2014/65/EU.

What this changes for you

1. Map your ESG-linked exposures before the year-end close. The contractual cash flow assessment must be documented by loan family, with the classification conclusion and its supporting rationale. This is the first point auditors will look at for the 2026 financial year.
2. Treat 2026 as the IFRS 18 comparative year. Settle the target income statement layout, the list of management-defined performance measures and their reconciliations now. A retrospective restatement decided in 2027 costs considerably more than data collection organised in 2026.
3. Decide who owns the response to the Risk Mitigation Accounting Exposure Draft. Accounting, ALM and risk need a common position before 30 November 2026, supported by fieldwork. The proposed withdrawal of IAS 39 also concerns institutions that will not apply the new model.

These topics sit where accounting standards, ALM steering and internal control meet. Helios Advisory designs training paths for banking and insurance professionals; details are available on the training page.

Sources

• IASB — Amendments to the Classification and Measurement of Financial Instruments (IFRS 9 and IFRS 7), 30 May 2024
• EFRAG — EU Endorsement Status Report, 17 July 2026
• IASB — IASB extends comment period for its proposed Risk Mitigation Accounting model consultation, 19 May 2026
• IASB — IASB proposes new accounting model to reflect how financial institutions manage interest rate risk, December 2025
• IASB — IFRS 18 Presentation and Disclosure in Financial Statements
• ESMA — ESMA consults on simplifying EU Taxonomy disclosure framework