Dear reader,

you might know the saying "After the closing is before the closing". Whenever I ask my colleagues in the consolidation and reporting department "How are you doing?" they tend to reply:

"We just completed the year-end closing, and the next quarter is already around the corner. After the closing is before the closing."

This phrase perfectly depicts the cyclical, never-ending nature of financial reporting.

While annual financial statements represent a large, well-defined package, semi-annual or quarterly statements, can raise a number of questions:

• Who must prepare them?
• How often?
• How soon after the year-end reporting?

IAS 34 Interim Financial Reporting will not provide you with those answers. Interim reporting requirements are driven by local regulations and, in many cases, stock‑exchange‑specific rules.

What IAS 34 does prescribe is:

the minimum content of an interim financial report, and the principles for recognition and measurement for complete or condensed interim financial statements.

Under IAS 34, preparers of interim financial statements may choose between:

i) a complete set of financial statements as described in IFRS 18, or ii) condensed financial statements as described in IAS 34.

In recent months, U.S. SEC Chair Paul Atkins stirred debate by proposing the cancellation of quarterly reporting in Form 10‑Q. This suggestion has triggered mixed reactions among preparers, regulators, and market participants.

What’s new at the standard setter?

Narrow scope amendments to IAS 28 Investments in Associates and Joint Ventures in connection with IFRS 18 are about:

• Permitting entities to measure an investment in an associate or a joint venture at fair value through profit or loss in accordance with IFRS 9 Financial Instruments.

• The prerequisite for this option is that these entities have a main business activity of investing in particular types of assets (as set out in paragraph 49(a) of IFRS 18).

Currently, this option is only available for a venture capital organization, or a mutual fund, unit trust and similar entities including investment-linked insurance funds (paragraphs 18-19 of IAS 28).

On February 13th, 2026 EFRAG endorsed IFRS 18, confirming the effective date for EU preparers as of January 1st, 2027.

IFRS for SMEs have been updated (3rd edition), here are the main points:

Section 11: Financial Instruments:

• Basic and other financial instruments in one section.
• Entities have no more the option to apply IAS 39 but must apply IFRS 9 Financial Instruments for recognition and measurement.
• Issued financial guarantee contract + supplementary principles to classify debt instruments.
• Added disclosure requirements for financial assets (age) and financial liabilities (maturity analysis).

Section 7: Statement of Cash Flows:

• An SME shall disclose a reconciliation between the opening and closing balances in the statement of financial position for liabilities arising from financing activities.
• Specification and disclosure for supplier finance arrangements.
• Revised section 23 Revenue from Contracts with Customers:
• 5-step model and contract costs.
• Disclosures of revenue, contracts and significant judgements.
• Application guidance for: i) contract modifications; ii) customer warranties and options for additional goods and services; iii) principal vs agents; iv) non-cash consideration andv) licensing.

How companies avoid loading up the debt when investing into asset-heavy projects?

• An entity sets up a special vehicle (SV), being a separate legal entity, which is not controlled by the entity. Typically SV will need a third party, which can provide know-how and/ or financing and/ or management for the SV.
• SV will enter a lease contract as a lessee - for example in a lease of data center assets.
• As the establishing entity has significant influence over the SV, it can avoid consolidating the SV in their books, including the leased assets, which, in accordance with IFRS 16 are in the SV's books.

This model recently became the subject of an article published by The Wall Street Journal titled “Meta Auditor Raises Red Flag on Accounting for $27 Billion Investment in Data Center.”

Apparently, the article has also stirred discussion across social media.

My take on the topic: this model is operating on a very thin line and attracting significant scrutiny, turning the debate into more of a battle of opinions.

It starts with the concept of a SV that is "not controlled" by the establishing entity. The SV is structured to be significantly influenced yet it effectively serves the purpose of the establishing entity.

As the lessee, the SV is presented as the primary user of the leased assets “on paper,” even though, in substance, the ultimate beneficiary is the establishing entity.

This example also illustrates how IAS 28—particularly the equity method of accounting—can be used in structuring arrangements to achieve a specific accounting outcome.

Have a great accounting week, regardless of the closing phase.

Best,

Barbora