Accounting Policy Manual Template (IFRS, US GAAP, IFRS 18)

Accounting Policy Manual: [Entity or group name]

The group's accounting policies by area: reporting framework and governance, materiality and capitalisation thresholds, revenue, inventory, property and equipment, intangibles, leases, financial instruments and credit losses, provisions and employee benefits, income taxes, foreign currency, consolidation and business combinations, presentation (including the move to IFRS 18 from 2027-01-01) and an elections register. References cite IFRS Accounting Standards and the FASB Accounting Standards Codification (ASC) by standard, topic and paragraph number only: obtain the standard for the normative text. Replace every [bracketed] value and every row marked Example. This is a document format, not accounting, audit, tax, legal or financial advice.

Document control

Approvals

Revision history

Contents

1. Purpose, framework and governance
2. Materiality and capitalisation thresholds
3. Revenue
4. Inventory and cost of sales
5. Property and equipment, intangibles and leases
6. Financial instruments and credit losses
7. Provisions, contingencies and employee benefits
8. Income taxes
9. Foreign currency
10. Consolidation, business combinations and related parties
11. Presentation and IFRS 18
12. Judgements, estimates and errors
13. Elections register
14. Policy change log and local GAAP bridges
15. Glossary and references

1. Purpose, framework and governance

1.1 Purpose and authority

This manual sets out the accounting policies that [Entity or group name] applies in its consolidated financial statements and, where stated, in the statutory statements of its subsidiaries. It is binding on every group entity, every finance team member who records or reviews transactions, and every system configuration that posts to the general ledger. Where a subsidiary's local statutory framework requires a different treatment, the subsidiary books the group policy in its group reporting ledger and records the local difference through the bridge described in section 14.

The manual records decisions. It does not restate the requirements of any standard. Each policy cites the standard by number so that a reader can open the authoritative text, and each policy states what the group has chosen to do where a choice exists, the judgement it applies where the standard leaves room, and the practical threshold or method it uses.

Example: Corvid Commerce Group plc (CC-HOLD) prepares consolidated financial statements under UK-adopted international accounting standards, as required for a UK company whose securities are admitted to trading on a UK regulated market (Companies Act 2006 and the UK Listing Rules and Disclosure Guidance and Transparency Rules; check the current text). The same statements also comply with IFRS Accounting Standards as issued by the IASB, which the group needs for its annual report on Form 20-F as an SEC foreign private issuer, so Note 1 contains a dual compliance statement. The group therefore adopts a new standard only when it is both issued by the IASB and adopted in the UK, and it tracks any timing gap between the two. The functional and presentation currency of the parent is EUR, and the financial year is the calendar year. Corvid Commerce GmbH (CC-DE, Germany, operating headquarters), Corvid Commerce Ltd (CC-UK), Corvid Commerce Inc (CC-US) and Corvid Commerce Vietnam LLC (CC-VN) report to the group under this manual. An EU-incorporated issuer would instead cite Article 4 of Regulation (EC) No 1606/2002 and IFRS as adopted by the EU.

1.2 Framework and hierarchy

1.3 Governance and change process

Policy ownership sits with the Group Financial Controller. The head of technical accounting drafts every new or changed policy and supports it with a Technical Accounting Memo (finance/technical-accounting-memo) whenever the change involves a judgement or a choice between permitted alternatives. The CFO approves policy changes; the audit committee approves changes in an accounting policy (as opposed to a change in an estimate) before the first reporting period in which they apply, and is informed of every other change at its next meeting.

Each change follows the same steps. The trigger is identified (a new standard, an amendment, a new transaction type, an acquisition, an auditor finding or a regulator comment). The technical team assesses which policies are affected and whether the change is a change in accounting policy, a change in estimate or the correction of an error, because each is treated differently under IAS 8 and ASC 250. The draft is reviewed by the controllers of the affected entities, who confirm that systems can apply it. The approved change is entered in the change log (section 14), communicated to all entity controllers with an effective date, and reflected in the close checklist.

1.4 Standards issued but not yet effective

Keep a watch list of standards and amendments issued but not yet effective, with the planned adoption date and the owner of the impact assessment. Disclosure of known or reasonably estimable effects of new standards not yet applied is itself a requirement under IAS 8, so the watch list feeds the notes directly.

Check each date against the issued standard and against its adoption status in the jurisdiction (UK Endorsement Board for UK-adopted standards, the EU endorsement process for EU reporters) before relying on it.

2. Materiality and capitalisation thresholds

Materiality for financial reporting is a judgement about whether an omission or misstatement could reasonably be expected to influence the decisions of the primary users of the statements. The group applies that judgement to every disclosure and presentation decision; it is not a fixed number. The numbers in this section are operational thresholds that decide how transactions are booked and reviewed. They are set well below any amount that could be material, both individually and in aggregate, and the controller reviews the aggregate effect of applying them each year end.

Example: Corvid's FY2026 revenue is EUR 140,000k. The group capitalisation threshold of EUR 2,000 per item kept EUR 310k of laptop and furniture purchases in operating expense in FY2026, which is 0.2% of revenue and was judged immaterial to the balance sheet and to profit, both alone and with other threshold effects.

Review the thresholds each year end. Raise them only when the aggregate effect of applying them stays immaterial at the higher level, and record the change in section 14 as a change in method (thresholds are practical expedients, so a change in threshold is normally treated prospectively).

3. Revenue

Reference standard: IFRS 15 Revenue from Contracts with Customers; US GAAP ASC 606. Contract costs: IFRS 15 (contract cost section); ASC 340-40. Each stream below has a full five-step analysis in a Revenue Recognition Memo (finance/revenue-recognition-memo); this section records only the resulting policy.

Elections and practical expedients used in revenue are listed in section 13 (for example, the IFRS 15 expedients on significant financing components and on incremental costs of obtaining a contract). Record each one there, with the standard reference by number and the scope the group applies it to, rather than describing it here. Read the conditions for each expedient in the standard before extending it to a new stream.

Example: Corvid capitalises sales commissions paid for new annual subscriptions and amortises them over an expected customer life of 4 years, estimated from five years of churn data and reassessed each year end. Commissions on renewals are paid at a lower rate, which is why the period reflects expected renewals; the analysis is in TAM-2026-009. Write the estimate and its data source in the estimate log (section 12).

Revenue is presented net of sales taxes collected for tax authorities, value added tax, discounts and expected returns. Gift cards and prepaid balances are contract liabilities until redeemed. Example: Corvid's unredeemed gift card balances are about 4% of cards issued; the method for recognising breakage, and the data behind it, are in TAM-2026-006.

4. Inventory and cost of sales

Reference standard: IAS 2 Inventories; US GAAP ASC 330.

Cost of sales for the subscription segment includes cloud hosting, third-party software embedded in the service, payment processing fees and the cost of the customer support team. Cost of sales for commerce includes the carrying amount of inventory sold, write-downs and fulfilment centre costs. Allocate shared costs on the documented driver (hosting by compute usage, support by ticket volume), and review the drivers each year with the budget.

Record each write-down and each reversal by stock-keeping unit in the inventory sub-ledger, with the reason, so the reversal analysis required by IAS 2 can be performed and audited. IAS 2 and ASC 330 treat reversals of write-downs differently; a group that also reports under US GAAP tracks the difference in the bridge in section 14.

5. Property and equipment, intangibles and leases

5.1 Property and equipment

Reference standard: IAS 16 Property, Plant and Equipment; IAS 23 Borrowing Costs; US GAAP ASC 360 and ASC 835-20.

The group uses the cost model for every class. Residual values are assumed to be nil except for vehicles. Useful lives, residual values and methods are reviewed each year end, and changes are accounted for prospectively as changes in estimate. Significant components with different lives are depreciated separately when their cost exceeds EUR 50,000 (Example). Borrowing costs are capitalised on qualifying assets that take more than 12 months (Example) to prepare for use. Details of each asset live in Fixed Asset Register (finance/fixed-asset-register).

5.2 Goodwill and acquired intangibles

Reference standards: IAS 38 Intangible Assets; IAS 36 Impairment of Assets; IFRS 3 Business Combinations; US GAAP ASC 350 and ASC 805.

Impairment tests are documented in Impairment Test Memo (finance/impairment-test-memo), including the cash-generating unit structure, the discount rate and the sensitivity analysis. Example: the FY2026 test (IMP-2026-001) recognised an impairment loss of EUR 2,600k on the Vietnam engineering services CGU, which reduced its goodwill of EUR 2,000k to nil; Marketplace DACH goodwill of EUR 21,000k has headroom of EUR 3,877k (9.1%). The indicator review is repeated at 31 December because the annual test date falls before the year end.

5.3 Internally developed software and cloud arrangements

Reference standards: IAS 38 (internally generated intangible assets; check the development-phase paragraphs); US GAAP ASC 350-40 (internal-use software, as amended by ASU 2025-06, effective for annual periods beginning after 2027-12-15 with early adoption permitted) and ASC 985-20 for software to be sold.

Example: Corvid capitalises directly attributable staff and contractor costs of developing new platform features once a feature has passed the group's architecture review gate and has an approved business case and budget, and stops capitalising when the feature is released to customers. Research, maintenance, bug fixing after release and training costs are expensed. Capitalised development is amortised straight-line over 3 years from release. The judgement behind the starting point is documented in TAM-2026-011, written with Technical Accounting Memo (finance/technical-accounting-memo).

Costs of configuring or customising a supplier's software that the group accesses as a service (and does not control) are expensed when the service is received, unless they create a separate intangible asset that the group controls. Prepay only where the supplier performs the work and the service period has not started.

5.4 Leases

Reference standards: IFRS 16 Leases; US GAAP ASC 842.

Each new lease above EUR 250,000 of total commitment (Example) has a Lease Accounting Memo (finance/lease-accounting-memo). Under US GAAP the lessee also classifies each lease as finance or operating; groups that report under both frameworks record the classification in the lease register even though IFRS 16 uses a single lessee model.

6. Financial instruments and credit losses

Reference standards: IFRS 9 Financial Instruments; IAS 32 Financial Instruments: Presentation; IFRS 7 Financial Instruments: Disclosures; IFRS 13 Fair Value Measurement; US GAAP ASC 326, ASC 815, ASC 820, ASC 825.

Credit losses on trade receivables use a provision matrix based on days past due and customer segment, built from three years of loss history and adjusted for current conditions and forward-looking information that the credit committee documents each quarter. Balances more than 180 days past due (Example) are written off once collection activity has ended, while legal recovery may continue. Banks and treasury counterparties are assessed using external ratings. Lenders and other entities with complex portfolios use ECL Methodology (finance/ecl-methodology) instead of this simplified section.

Hedge accounting is applied only where treasury has documented the hedge relationship at inception in Hedge Designation Documentation (finance/hedge-designation-documentation). Group-wide hedging objectives and limits are set in FX and Interest Rate Hedging Policy (finance/fx-interest-rate-hedging-policy). Fair value hierarchy levels are assigned by treasury and reviewed by the controller; the group holds no level 3 instruments other than the minority equity stake.

7. Provisions, contingencies and employee benefits

Reference standards: IAS 37 Provisions, Contingent Liabilities and Contingent Assets; IAS 19 Employee Benefits; IFRS 2 Share-based Payment; US GAAP ASC 450, ASC 460, ASC 715, ASC 718.

IAS 37 and ASC 450 differ in recognition and measurement for contingencies. A group that reports to a US GAAP investor records the differences per claim in the legal register, not in this manual. Employee benefit plans are listed by country because the accounting depends on plan design: when a new country or plan is added, the payroll controller and the technical team classify it before the first payroll is booked.

8. Income taxes

Reference standards: IAS 12 Income Taxes; IFRIC 23 Uncertainty over Income Tax Treatments; US GAAP ASC 740. Pillar Two: IAS 12 as amended for International Tax Reform (Pillar Two Model Rules), including its mandatory temporary exception for deferred taxes arising from the rules.

The quarterly and annual tax computation follows Income Tax Provision (finance/income-tax-provision). The group's tax risk appetite is set out in Tax Strategy Statement (finance/tax-strategy-statement), and intercompany pricing follows the transfer pricing documentation in Transfer Pricing Master File (finance/transfer-pricing-master-file).

9. Foreign currency

Reference standards: IAS 21 The Effects of Changes in Foreign Exchange Rates (as amended for lack of exchangeability); IAS 29 where an economy is hyperinflationary; US GAAP ASC 830.

Example: Corvid takes daily rates from [the European Central Bank euro reference rates / a named market data provider] at 16:00 CET and loads them into the ERP each morning. Transactions use the rate of the transaction date. The consolidation system uses the closing rate of the last working day and a monthly average of daily rates for the income statement, and the controller tests each quarter whether monthly averages remain a reasonable approximation in volatile months (VND and GBP are watched). Long-term intercompany loans that treasury designates as part of the net investment in a foreign operation are listed by loan number, and the treasury committee confirms the designation each year end with the evidence that settlement is not planned. Record each rate source and cut-off time here so every entity uses the same data.

10. Consolidation, business combinations and related parties

Reference standards: IFRS 10 Consolidated Financial Statements; IFRS 11 Joint Arrangements; IFRS 12 Disclosure of Interests in Other Entities; IAS 28 Investments in Associates and Joint Ventures; IFRS 3 Business Combinations; IAS 24 Related Party Disclosures; US GAAP ASC 810, ASC 323, ASC 805, ASC 850.

The group consolidates every entity it controls from the date control is obtained until the date it ceases. All subsidiaries use the group's accounting policies and a 31 December reporting date. Intercompany balances, transactions and unrealised profits are eliminated in full, and the intercompany matching process runs on working day 2 of each close (Example), with differences above EUR 1,000 resolved before consolidation.

For business combinations, the group's default for non-controlling interests is the proportionate-share option under IFRS 3; the deal team documents any acquisition for which it chooses the other option (the choice is made per transaction, see section 13). Each acquisition has its own Technical Accounting Memo (finance/technical-accounting-memo) covering the acquisition date, the consideration (including any contingent element), the purchase price allocation with the valuation report, and the plan for finalising provisional amounts within the IFRS 3 measurement period. The finance integration steps are in M&A Integration 100-Day Plan (finance/m-and-a-integration-100-day-plan).

Related parties are identified from the board and key management declarations collected each year end and from the shareholder register, and transactions are logged in Related Party Register (finance/related-party-register). Intragroup transactions are eliminated on consolidation but remain disclosable in the subsidiaries' own statements.

11. Presentation and IFRS 18

Reference standards: IAS 1 Presentation of Financial Statements (applies to periods beginning before 2027-01-01); IFRS 18 Presentation and Disclosure in Financial Statements (applies to annual periods beginning on or after 2027-01-01, retrospectively; EU endorsed on 2026-02-13; for the UK, check adoption by the UK Endorsement Board); IAS 7 Statement of Cash Flows (as amended by IFRS 18); IAS 33 Earnings per Share; IAS 34 Interim Financial Reporting; IFRS 8 Operating Segments. US GAAP: ASC 205, ASC 220, ASC 230, ASC 280, and ASU 2024-03 with ASU 2025-01 on disaggregation of income statement expenses (annual periods beginning after 2026-12-15) for US GAAP reporters.

IFRS 18 changes the structure of the statement of profit or loss, introduces disclosure of management-defined performance measures and adds requirements on aggregation and disaggregation. Read the standard for the requirements. This manual records only the group's choices and the mapping that results from them. The full project, including the restated comparatives for FY2026, the systems changes and the communication plan, is run through IFRS 18 Transition Plan (finance/ifrs-18-transition-plan).

Segment reporting follows the information the chief operating decision maker reviews: subscription, commerce and services (Example). Earnings per share is presented on the face of the statement of profit or loss. Interim reports are condensed under IAS 34 and use the same policies as the annual statements, with tax based on the expected annual effective rate.

12. Judgements, estimates and errors

Reference standards: IAS 8 (policy changes, estimate changes and error corrections; also basis of preparation, including going concern, from 2027-01-01 under the version amended by IFRS 18); IAS 1 (judgements and estimation uncertainty disclosures, until superseded by IFRS 18; check where each requirement sits in the amended standards); IAS 10 Events after the Reporting Period; US GAAP ASC 250, ASC 275, ASC 855, and ASC 205-40 for going concern.

Management assesses going concern at each reporting date over the look-forward period that the framework requires, using the method in Going Concern Assessment (finance/going-concern-assessment). Errors in prior periods are corrected retrospectively when material, and the controller records each detected error, its size and the decision in the error log even when it is not material, so the aggregate can be evaluated at year end.

Classify every proposed change before it is approved. The technical memo for a change cites the IAS 8 (or ASC 250) paragraphs that permit it and states the transition method, because the treatment of a policy change, an estimate change and an error correction differ. Where the classification itself is a judgement (for example, a change in depreciation method), record the reasoning in the memo and in the change log.

13. Elections register

The elections register is the index of every place where the group chose between alternatives that the standards permit. It is reviewed each year end by the head of technical accounting, who confirms that each election is still applied consistently, that no new transaction falls into a choice not yet made, and that the disclosure note describes each election that is material.

14. Policy change log and local GAAP bridges

14.1 Change log

14.2 Local GAAP bridges

Each subsidiary keeps a standing bridge between its local statutory accounts and the group reporting package. The entity controller updates it at each year end, and the group controller reviews it as part of the consolidation sign-off. Items in the bridge are reconciling differences, not errors; any item that cannot be explained is investigated as a possible error.

15. Glossary and references

15.1 Glossary

15.2 References

Standards are cited by number and title only. Obtain each standard from its publisher for the normative text.

Standard and licence note

Structure aligned with common practice for group accounting manuals that support the accounting policy disclosures required by IAS 8 and ASC 235. IFRS Accounting Standards (IFRS Foundation) and the FASB Accounting Standards Codification are cited by standard, topic and paragraph number only; no text from them is reproduced or paraphrased, and every policy statement is an original example of an entity choice. Regulation (EC) No 1606/2002 is cited from EUR-Lex, UK legislation from legislation.gov.uk and SEC forms by item number. Corvid Commerce Group and every figure are fictional. This template is original text written for this collection. Check the current official version of each standard, its effective date and its UK or EU adoption status before use. Template licence: MIT.