Ind AS 118 transition: why your FY 2026-27 ledger needs new tags now

Short answer: Ind AS 118 is retrospective. If it applies from 1 April 2027, the FY 2026-27 statements you are preparing right now will be shown again in the new format next year. The cheapest way through is to tag the data while you are closing it, not to rebuild it later.

The timeline most teams underestimate

On the proposed dates:

• FY 2026-27 (now): the year that becomes your restated comparative.
• Q1 FY 2027-28 (June 2027): likely the first quarterly results in the new layout, needing Q1 FY 2026-27 restated alongside.
• FY 2027-28 annual report: first full year, with FY 2026-27 comparatives and a reconciliation from the old to the new presentation.

So the data for your first comparative is being created in your ledgers this quarter.

What to tag

1. Category, for every P&L ledger. Operating, investing, financing, income taxes or discontinued operations. Most ledgers are obviously operating. The work is in the rest.

2. Nature and function. If you present by function, you’ll still need nature-level totals for depreciation, amortisation, employee benefits, impairment and inventory write-downs.

3. Source, for mixed ledgers. These are where the effort sits:

4. Equity-accounted results and related gains. These move into investing.

Where to put the tags

Tagging in the ERP means a project with IT for each system and each company. For multi-ERP groups, the practical place is the mapping layer that turns each company’s trial balance into the group’s reporting lines. One tag on the group line covers every company mapped to it; only genuinely mixed ledgers need splitting at source.

The main-business-activity decision comes first

Tags depend on whether investing or providing finance is a main business activity of the reporting entity. Get that assessment written and agreed for each entity, standalone and consolidated, before tagging. A holding company and the group it heads can reach different answers.

Quarterly comparatives

Listed groups should assume they will need restated comparative quarters. That means tagging at quarterly granularity, not just at year-end, and keeping the tagged data for all four FY 2026-27 quarters.

A dry run is worth more than a memo

Once tags are in place, produce FY 2025-26 in the draft new layout. You will find:

• ledgers that don’t split cleanly;
• judgement calls on classification you hadn’t noticed;
• a new operating profit that differs from the EBITDA-based story you tell investors; and
• captions that need breaking up.

Better to find these on last year’s numbers than on the comparative year.

Where FINAHQ fits

FINAHQ maps each company’s trial balance to the group’s reporting lines once, then produces statements from approved templates every close. Category and nature tags sit on that mapping, so a draft Ind AS 118 layout can run alongside the current Schedule III statements from the same numbers, and the FY 2026-27 comparative is ready when the format is final. See what it would save your close.

This article is general information, not professional advice. Dates and requirements depend on the final notified text.