Original content provided by BDO Global
IFRS 18 Presentation and Disclosure in Financial Statements, which supersedes IAS 1 Presentation of Financial Statements, is effective for annual reporting periods beginning on or after 1 January 2027. IFRS 18 will significantly affect how entities present and explain financial performance, even though it does not change recognition and measurement requirements.
BDO’s IFRB 2026/03 uses practical scenarios to illustrate how the new requirements may affect operating profit, classification of income and expenses, aggregation and disaggregation, cash flow presentation, management-defined performance measures and related disclosures. The publication highlights the necessity of early assessment of effects of IFRS 18, as its implementation may require changes to systems, processes, performance metrics, covenants and external communications.
Entities should begin assessing the effects of IFRS 18 as soon as possible. This assessment should not be limited to the finance reporting team, as the adoption of IFRS 18 may require input from treasury, tax, investor relations, legal, remuneration, systems and operational teams. Early analysis will help entities identify areas of judgement, determine whether data is available at the required level of granularity, assess whether systems and processes require changes, and develop a communication plan for explaining changes to users of the financial statements.
