IFRS 18: more than compliance, a catalyst for transformation

Discover how IFRS 18 can enhance financial performance and strategic decision-making beyond mere compliance.

In brief:

• IFRS 18 offers organizations a chance to enhance financial performance, not just meet compliance.
• Timely decisions on classifications and KPIs are crucial to future-proof the finance function.
• A strategic approach to IFRS 18 can optimize processes and strengthen ownership of performance metrics.

With the introduction of IFRS 18 (Presentation and Disclosure in Financial Statements) as of 1 January 2027, financial reporting is facing a fundamental shift. This standard is far more than a new compliance requirement; it offers organizations a real opportunity to improve how financial performance is defined, measured, and communicated. Those who treat IFRS 18 as a box-ticking exercise risk missing out on value. Used strategically, the standard can help strengthen the finance function across key pillars: strategy, data, systems and processes, and people.

Data: a solid foundation

IFRS 18 raises the bar for detail, classification, and traceability of financial information. Relying on manual adjustments and workarounds increases the risk of errors and slows down reporting.

By harmonizing general ledger structures, streamlining reporting hierarchies, and clearly defining key concepts, organizations can build a robust and future-ready data foundation. This enables finance teams to move beyond reporting and use data as a strategic tool for control, predictability, and transparency.

A structured data foundation also allows organizations to respond more quickly to information requests from management, investors, regulators, and other stakeholders. This makes the finance function not only more efficient, but also more proactive and relevant in strategic discussions.

Processes and systems: simplicity and speed

IFRS 18 has a direct impact on closing and reporting processes. If new requirements are simply layered onto existing processes, workload increases and dependence on manual corrections grows.

Embedding IFRS 18 directly into processes and systems creates an opportunity to simplify and accelerate operations. Automating classifications, reconciliations, and disclosures, combined with a standardized closing process, can shorten the financial close cycle and reduce errors. As a result, less time is spent explaining figures and more time can be devoted to analysis, forward-looking insights, and strategic advice.

The role of finance then shifts from reactive to proactive, from reporting what happened to helping steer what comes next. This makes the function more value-adding and better prepared for the future.

People: ownership and collaboration

Every transformation depends on people. IFRS 18 requires clear ownership of performance indicators and a solid understanding of the new reporting requirements. This calls for targeted training, new capabilities, and strong collaboration between finance and other parts of the organization.

When responsibilities are clearly defined and teams are actively involved, IFRS 18 becomes more than a technical accounting change. It evolves into a shared framework that connects strategy, data, and processes. Finance plays a central role in bringing these elements together, ensuring that the change is sustainably embedded and continues to deliver value after implementation.

From compliance to transformation

IFRS 18 is much more than a new reporting standard. Organizations that approach it strategically can achieve compliance while at the same time strengthening their finance function. Rather than treating compliance and improvement as separate efforts, IFRS 18 offers a unique opportunity to optimize processes, systems, and data while reinforcing ownership of performance.

Concrete next steps

To move from compliance preparation to meaningful transformation:

1. Analyze the current situation: assess where existing reporting, KPIs, and systems differ from the requirements of IFRS 18.
   
   
2. Define focus areas: identify improvements that support both compliance and value creation.
   
   
3. Form a cross-functional team: involve finance, IT, investor relations, and other key stakeholders to ensure shared ownership.
   
   
4. Design a roadmap: combine compliance milestones with initiatives that deliver immediate benefits.
   
   
5. Embed the change: invest in training, communicate clearly, and link responsibilities to incentives where appropriate to ensure sustainable adoption.

By implementing IFRS 18 in this way, organizations can build a more efficient, agile, and strategically stronger finance function, ready for what lies ahead.