Cognos 8.3 BI (and later versions) provides capability to format prompt display

When the prompt page appears, press OK to run the report:

Note the format of the pDate parameter is in ISO standard timestamp format.
2008-10-14T00:00:00.000

We can use the string2timestamp( ) function to cast it to a proper timestamp.

Return to Report Studio and Edit the existing Layout Calculation as so:
string2timestamp(ParamValue(‘pDate’))

Run the report:

The timestamp is displayed with the default date formatting.
Oct 14, 2008 12:00:00 AM

Return to Report Studio.
Select the Layout Calculation item.
Right click and select Style … Data Format.
Set the data format as so whatever you want.