IFRS Consolidated Accounts in 2026: Scope, Methods and Timeline

Updated 12 May 2026. Regulation (EC) No. 1606/2002 mandates IFRS for the consolidated accounts of companies listed on a regulated market in the European Union. Unlisted groups have a choice: French standards — ANC Regulation No. 2020-01 — or IFRS. For a group CFO in Paris, consolidation is not simply a matter of adding up subsidiary balance sheets. It articulates eight successive steps — scope identification, harmonisation, IAS 21 currency translation, intra-group elimination, share elimination, calculation of non-controlling interests, IFRS 3 goodwill treatment, and IAS 1 presentation. In 2026, this process is supplemented by a new obligation: the CSRD sustainability report published simultaneously with consolidated accounts for large undertakings.

Regulation (EC) 1606/2002 and application to EU-listed companies#

Regulation (EC) No. 1606/2002 of 19 July 2002 imposed the use of IFRS, as endorsed by the European Union through a process led by EFRAG (European Financial Reporting Advisory Group), on all companies listed on a regulated market of a Member State. The effective date — 1 January 2005 — marked a turning point for listed French groups, which until then had prepared consolidated accounts under French GAAP. The scope covers consolidated accounts; standalone accounts remain governed by the French general accounting plan (PCG) and ANC Regulation No. 2014-03. This duality — IFRS for the group, PCG for the French subsidiary — requires systematic reconciliation at each closing, addressed below under the harmonisation step.

Article L233-17 CC — exemptions for small groups#

Article L233-17 of the French Commercial Code exempts French groups from the obligation to prepare consolidated accounts when, over two consecutive financial years, the combined parent and subsidiaries do not exceed two of the three following thresholds — to be confirmed for 2026: €48 million total balance sheet, €96 million turnover excluding VAT, 250 employees on average. These thresholds were raised in 2024 through transposition of the amended European Accounting Directive 2013/34/EU. A patrimonial holding controlling two operating companies and staying below the thresholds therefore has no obligation of its own, except in case of listing, banking or insurance status, or statutory requirement. The logic of this exemption mirrors that of the PACTE thresholds for statutory audit, with distinct ranges but an articulation worth mapping.

Voluntary IFRS option for unlisted companies#

The European regulation authorises Member States to extend the IFRS obligation to unlisted companies, which France has not done. French unlisted groups may, however, voluntarily opt for IFRS in their consolidated accounts, through an irrevocable decision. This option is frequent among Series B+ startups targeting a listing or international sale, among French subsidiaries of foreign IFRS groups, and among mid-caps benefiting from an international banking pool. The trade-off rests on three criteria: readability by international investors or lenders, additional cost (15 to 50% of annual audit budget), and the horizon for IPO or M&A. For a cross-cutting overview of accounting principles under PCG vs IFRS, we refer to our dedicated analysis.

Exclusive control and full consolidation (IFRS 10)#

IFRS 10 — endorsed by the EU through Regulation 1254/2012 — defines exclusive control through three cumulative criteria: power over the investee, exposure to variable returns, and the ability to use that power to influence those returns. Article L233-16 of the Commercial Code adopts the same logic under French law. The indicative threshold remains holding more than 50% of voting rights, but this criterion is not sufficient: a shareholders' agreement granting a minority shareholder veto rights over operational policies can rule out exclusive control despite a capital majority. The applicable method is full consolidation (IG): a 100% pick-up of the subsidiary's assets, liabilities, expenses and income, with separate identification of the minority share as non-controlling interests on the liability side and as minority result in the income statement.

Joint control and equity method (IFRS 11)#

IFRS 11 — applicable since 2014 in the EU — eliminated proportionate consolidation for jointly controlled partnerships. Joint control supposes a contractual sharing of power between two or more parties who must act jointly on operational and financial policies. The standard distinguishes two structures: the joint venture and the joint operation. The joint venture is accounted for by the equity method; the joint operation by direct recognition of the share of assets, liabilities, expenses and income. For joint ventures established before 2014, this elimination triggered a retroactive restatement often significant on the consolidated balance sheet.

Significant influence and IAS 28#

IAS 28 governs investments in associates over which the investor exercises significant influence. The presumption threshold is holding 20% to 50% of voting rights, but the analysis rests on qualitative indicators: representation on the board, participation in policy decisions, significant transactions between the two entities, exchange of key management personnel. The method is the equity method (MEE): replacement of the historical carrying value of the shares in the consolidated balance sheet by the share of the associate's equity, increased each year by the net result of the year — also pro rata — reduced by dividends received.

Scope identification and harmonisation#

Step 1 consists of drawing up the group's organisational chart through the lens of control: for each entity, determining whether it is under exclusive control (IG), joint control (MEE joint venture) or significant influence (MEE associate). Step 2 is harmonisation: restating each set of standalone accounts to align with the group's consolidation manual. A French subsidiary under PCG belonging to an IFRS group must be restated under IFRS for leases (IFRS 16), employee benefits (IAS 19), financial instruments (IFRS 9), deferred taxes and goodwill. This work is carried out through the consolidation reporting package, populated by each subsidiary at the same closing date.

Currency translation and intra-group elimination#

Step 3 — currency translation under IAS 21 — concerns subsidiaries whose functional currency differs from the group's presentation currency. The rule: the balance sheet is translated at the closing rate, the income statement at the average rate of the period, and the resulting translation difference is recorded in Other Comprehensive Income (OCI) within equity. Upon disposal of the subsidiary, this accumulated translation difference is recycled to profit or loss. Step 4 is the elimination of intra-group transactions: internal sales between subsidiaries, reciprocal loans and receivables, dividends paid within the group, internal capital gains on inventories and fixed assets. The objective: to present the group as a single economic entity, without artificial inflation of revenue or results.

Goodwill, non-controlling interests, IAS 1 presentation#

Steps 5 to 8 finalise the process. Step 5 — elimination of shares — cancels the carrying amount of investment shares held by the parent in the subsidiary, against a reduction of the subsidiary's equity. The difference between acquisition price and fair value of identifiable net assets generates goodwill (step 7, treated under IFRS 3 — see dedicated section). Step 6 — calculation of non-controlling interests — isolates the share of minority shareholders in the equity and result of subsidiaries under full consolidation. Step 8 — IAS 1 presentation — assembles the consolidated statements: balance sheet, income statement, statement of comprehensive income (OCI), cash flow statement, statement of changes in equity, and notes. The consolidated work articulates closely with the accounting financial year and its closing cycle at standalone level.

Acquisition-date calculation and fair value of identifiable assets#

IFRS 3 — Business Combinations — mandates the acquisition method: at the date of taking control, the acquirer measures all identifiable assets acquired and liabilities assumed at their fair value. This fair value is often subject to a purchase price allocation (PPA) entrusted to an independent valuator: recognition of intangible assets not previously recorded (brands, patents, customer relationships, internally developed technologies of the target), revaluation of tangible fixed assets, recognition of contingent liabilities measured at fair value. Goodwill corresponds to the positive difference between the acquisition price (at fair value, net debt included) and the fair value of identifiable net assets. A negative goodwill — badwill — is recognised immediately in profit or loss after verification.

Annual impairment test and CGUs (Cash-Generating Units)#

IFRS 3 combined with IAS 36 mandates an annual impairment test of goodwill, plus a one-off test in case of any indicator of impairment. Goodwill is allocated to Cash-Generating Units (CGUs) or groups of CGUs, defined at the lowest level at which goodwill is monitored by management. The recoverable amount of the CGU — the higher of fair value less costs of disposal and value in use — is compared with the carrying amount of the CGU (including goodwill). If the recoverable amount is lower, an impairment is recognised, allocated first to goodwill and never reversed in subsequent periods. The discipline of the test rests on the consistency of projected cash flows with the approved budget, and on the justification of the discount rate (WACC). Our detailed analysis of the IAS 36 impairment test covers the mechanics.

Difference with amortisation under ANC Regulation 2020-01#

ANC Regulation No. 2020-01 on consolidated accounts under French standards imposes, contrary to IFRS, the mandatory amortisation of goodwill over its useful life. When this useful life cannot be reliably estimated, the general rule sets a default duration of 10 years. Practical consequence: an unlisted group choosing the French framework will see its goodwill decrease linearly each year through amortisation charges, whereas an IFRS group will see its goodwill maintained on the balance sheet as long as no impairment is recognised. Over five to ten years, the difference on consolidated equity can reach several tens of percentage points for a group with active external growth.

IFRS 16 — right of use for lease contracts#

IFRS 16 — applicable since 1 January 2019 — abolished the distinction between operating and finance leases for the lessee. Any lease contract longer than 12 months — commercial lease, company vehicle leases, long-term IT contract — gives rise to the recognition of a right-of-use asset and a corresponding discounted lease liability. The rental charge is replaced by amortisation of the right-of-use asset and an interest charge on the liability. The effect: inflation of assets and liabilities on the balance sheet (several million euros for a Paris-based group leasing several office buildings), reduction of operating result (EBITDA increased, EBIT slightly decreased), modification of the net debt ratio. The PCG, without an equivalent standard, treats operating leases as expenses and finance leases off-balance-sheet with amortisation and interest only as expenses. This gap is one of the most structuring to explain to bankers and investors when switching to IFRS.

IFRS 9 — classification and expected credit losses (ECL)#

IFRS 9 — Financial Instruments — replaced IAS 39 in 2018. It classifies financial assets into three categories according to the business model and contractual cash flow characteristics: amortised cost, fair value through OCI, fair value through P&L. The major innovation for an industrial group is the expected credit loss (ECL) model: provisioning trade receivables to the extent of expected losses over their lifetime, no longer only when a loss is incurred. A CFO must calibrate a provisioning matrix by receivable aging, customer segment and geographic area. Concretely, this leads to an earlier and often higher provision than under PCG, with a direct impact on consolidated profit and EBITDA.

IAS 19 — actuarially calculated retirement obligations#

IAS 19 mandates the actuarial calculation of retirement obligations and other long-term employee benefits — notably end-of-career indemnities in France. The projected unit credit (PUC) method projects the end-of-career salary, applies a discount rate consistent with AA corporate bonds, and accounts for mortality, turnover and salary progression. The balance sheet liability reflects the discounted obligation net of any plan assets. Actuarial differences — assumption revisions, experience differences — are recorded in OCI without recycling. The PCG leaves this obligation off-balance-sheet at the company's option, with disclosure in the notes; for a French industrial group with high seniority, the IFRS transition reveals an obligation often of several million euros not displayed in individual accounts.

Balance sheet, income statement, OCI#

IAS 1 — Presentation of Financial Statements — structures the five mandatory consolidated statements. The balance sheet classifies assets and liabilities as current/non-current or by order of liquidity; non-controlling interests appear separately in equity. The income statement isolates recurring operating result, profit before tax and net profit, with allocation between group share and minority share. The statement of comprehensive income (OCI) adds to net profit items recognised directly in equity: IAS 19 actuarial differences, IAS 21 translation differences, fair value variations on IFRS 9 financial assets classified at fair value through OCI, hedging instruments.

Cash flow statement and statement of changes in equity#

The consolidated cash flow statement — direct or indirect method under IAS 7 — distinguishes operating, investing and financing flows. The indirect method, more frequent, starts from net profit, adds non-cash charges (amortisation, provisions) and adjusts for changes in working capital. The statement of changes in equity reconciles opening equity with closing equity, isolating: result of the period (group share and minority share), OCI items, dividend distributions, capital increases, share-based payment plans, scope variations.

Notes — the essential of the information#

The notes are disproportionately more extensive in IFRS than in PCG. They include: the detailed scope with control and interest percentages by subsidiary (IFRS 12 requirement), accounting policies for each sensitive topic, breakdown of main balance sheet and income statement items, assumptions of the goodwill impairment test with sensitivity analysis, off-balance-sheet commitments, related-party transactions (IAS 24), events after the reporting period. For a CAC Mid 60 listed group, the annual consolidated reference document frequently reaches 250 to 400 pages.

6 months after closing for publication#

Article L232-1 of the Commercial Code requires the publication of consolidated accounts within six months of the closing of the financial year. For a 31 December closing, the deadline is therefore set at 30 June. This deadline requires a rigorous production cascade: finalisation of standalone accounts subsidiary by subsidiary by D+45, upload of the consolidation reporting package by D+60, first consolidated set by D+90, review by the statutory auditor by D+120, approval by the board by D+150, approval by the general meeting by D+180. Listed groups publish an anticipated results press release in March, before the full reference document.

First-time adoption under IFRS 1 — 6 to 12-month project#

First-time adoption of IFRS is governed by IFRS 1. It involves the reconstitution of an IFRS opening balance sheet at the transition date — the year prior to the first reporting year, to allow comparative presentation. The project lasts 6 to 12 months for a mid-cap: mapping of divergences, choice of first-time adoption options (fixed asset revaluation, freezing of past actuarial differences, etc.), restatement of accounts by reported year, team training, consolidation tool parametrisation (SAP BPC, Oracle HFM, BlackLine, Wdesk, Lucanet). The overall budget ranges between €100K and €500K depending on complexity, excluding subsequent maintenance.

Annual maintenance and audit#

The annual maintenance of an IFRS consolidated framework represents €30K to €150K for a mid-cap, including tool licenses, consolidation manual updates, ongoing training, and regulatory monitoring. The audit cost in IFRS is typically 1.5 to 2 times higher than that of an audit under French standards alone, due to additional controls on goodwill, IFRS 16, ECL and currency translation. For a consolidated group with €50M revenue, expect €35,000 to €80,000 excluding VAT per year. Our firm intervenes as outsourced CFO on the consolidation process for growth groups that have not yet internalised a full-time consolidation team.

Sustainability report published with consolidated accounts#

The CSRD directive (Corporate Sustainability Reporting Directive — EU Directive 2022/2464) requires, for financial years opened on or after 1 January 2024, the publication of a sustainability report integrated into the consolidated management report. The scope progressively concerns large undertakings (> 250 employees and > €50M revenue or > €25M balance sheet — two criteria out of three), then listed SMEs from 2026, and finally European subsidiaries of non-European groups from 2028. The report is published simultaneously with the consolidated accounts, in a single electronic format (XHTML tagged in XBRL) within the annual financial report.

ESRS standards and IFRS S1/S2 harmonisation#

The ESRS (European Sustainability Reporting Standards) published by EFRAG in July 2023 — ESRS 1 and 2 cross-cutting, plus 10 thematic standards on environment, social and governance — define the content of the report. In parallel, the IFRS Foundation published the IFRS S1 and S2 standards through its International Sustainability Standards Board (ISSB) in June 2023. Interoperability work is in progress between EFRAG and ISSB to allow groups applying both frameworks to produce a single report, particularly on climate risk identification and materiality. For French groups listed on US markets, this dual requirement is structuring. Our analysis of RSE indicators and CSRD addresses this aspect in depth.

Limited assurance by statutory auditor or OTI#

The CSRD report is subject to limited assurance by the statutory auditor or by an independent third-party body (OTI) accredited by COFRAC. The evolution towards reasonable assurance is planned by 2028-2030 by the European Commission. This engagement differs from the financial audit — it does not opine on fairness, but concludes that nothing has come to the practitioner's attention that suggests the information is materially misstated. The additional cost is 15 to 30% of the financial audit budget.

The trade-off — voluntary IFRS for unlisted groups#

For the unlisted groups we support in Paris, the IFRS option is only relevant in three concrete cases: preparation of a listing within 18-36 months, integration into a foreign IFRS group requiring homogeneous consolidated reporting, or Series B+ fundraising with international investors requiring standards comparable to the global benchmark. Outside these situations, the additional compliance cost of IFRS (€100K-€500K in first-time application, €30K-€150K/year in maintenance) is not absorbed by an external readability benefit. The French framework — ANC Regulation 2020-01 — then remains the rational choice. The trade-off must be documented in writing at the time of the choice, as the IFRS option is irrevocable.

The underestimated risk — goodwill not tested and poorly calibrated CGUs#