The Introduction of IFRS 18: Presentation and Disclosure in Financial Statements

The International Accounting Standards Board (IASB) has published its new standard IFRS 18 ‘Presentation and Disclosures in Financial Statements' that will replace IAS 1 'Presentation of Financial Statements'.

IFRS 18 is effective for annual reporting periods beginning on or after 1 January 2027. The standard is applied retrospectively, with specific transition provisions, and early adoption is permitted.

IFRS 18 means companies will:

• in the statement of profit or loss—report two new defined subtotals including operating profit, based on a new set of requirements for classifying income and expenses in categories;

• in the notes—disclose information about some performance measures defined by management, which IFRS 18 identify as ‘management‑defined performance measures’ (MPMs); and

• in both the primary financial statements and the notes—group items applying enhanced requirements for aggregation and disaggregation of information.

IFRS 18 also introduces limited changes to the statement of cash flows.

For a one-page summary, see ifrs18-one-page-april2024.pdf.