FINANCIAL STATEMENT EXAMPLES AND USER GUIDE UPDATED UNDER TFRS 18
Under the Decision of the Public Oversight, Accounting and Auditing Standards Board dated 30 October 2026 and numbered 75935942-050.01.04-[01/47201], published in the Turkish Official Gazette dated 4 November 2026 and numbered 33420, the Financial Statement Examples and User Guide has been republished to reflect amendments to the Turkish Financial Reporting Standards arising from TFRS 18 Presentation and Disclosure in Financial Statements. The updated Guide aims to improve consistency, comparability and understandability in financial statement presentation.
Scope and Mandatory Application
Entities subject to independent audit under Article 397/4 of the Turkish Commercial Code that apply TFRS either mandatorily or voluntarily will prepare their financial statements in accordance with the examples in the new Guide. Entities submitting financial statements to the Public Disclosure Platform (KAP) will additionally use the financial statement formats specified in the TFRS Taxonomy for such filings. Entities not subject to independent audit but applying TFRS may also use the examples. For entities regulated by the CMB, BRSA or Insurance and Private Pension Regulation and Supervision Agency, sector-specific formats will continue to prevail; where no sector-specific example exists, the examples in the Guide will be used.
Key Changes Introduced by TFRS 18
TFRS 18 will replace TAS 1 Presentation of Financial Statements for annual reporting periods beginning on or after 1 January 2027. Income and expenses in the statement of profit or loss will be classified into five categories: operating, investing, financing, income taxes and discontinued operations. As a general rule, the standard also requires presentation of the subtotals “Operating Profit or Loss” and “Profit or Loss before Financing and Income Taxes”.
For management-defined performance measures, an entity will be required to provide disclosures in a single note for certain subtotals of income and expenses used in public communications outside the financial statements that communicate management’s view of financial performance. For example, an “adjusted EBITDA” measure may fall within this scope if it meets the definition in TFRS 18. The entity must explain how each measure is calculated and reconcile it to the most directly comparable total or subtotal specified by TFRS, including the income tax effect and the effect on non-controlling interests of the reconciling items.
TFRS 18 also introduces more disciplined requirements for aggregation and disaggregation to prevent material information from being obscured within overly broad line items. Accordingly, significant amounts with dissimilar characteristics may need to be disaggregated rather than accumulated under generic captions such as “other expenses”. In addition, under the consequential amendments to TAS 7, entities using the indirect method in the statement of cash flows will start the reconciliation of cash flows from operating activities from “operating profit or loss”.
Effective Date and Transition
The updated Financial Statement Examples and User Guide will apply to reporting periods beginning on or after 1 January 2027. Entities choosing to early-apply TFRS 18 may also early-apply the Guide and must disclose such early application in the notes. The financial statement examples in the Guide are to be applied retrospectively in accordance with TAS 8. Upon effectiveness of the new Guide, the previous Financial Statement Examples and User Guide, adopted by Board Decision No. 01/146 dated 30 May 2019, will be repealed.
Points to Consider in Practice
TFRS-reporting companies should compare their current reporting packages, account mappings and reporting systems with the new formats ahead of the 2027 reporting period. Particular attention should be given to allocating profit or loss items to the new activity categories, producing the new subtotals, restating comparative information where required and preparing the related note disclosures. Finance, accounting and audit teams should therefore plan the transition before the 2026 year-end closing process is completed.
Subject to the exceptions applicable to entities governed by sector-specific regulations, the new Guide will become the principal presentation framework for TFRS-reporting entities within its scope from the 2027 reporting period. Companies should therefore incorporate the revised financial statement formats and TFRS 18-related reporting changes into their implementation plans in advance.
