EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.
Recent Searches
IFRS 18 marks a significant evolution in how entities present and disclose information in their financial statements, replacing IAS 1 and responding to investor demand for greater transparency and comparability.
What’s new in IFRS 18?
New required subtotals:
- Operating profit or loss
- Profit or loss before financing and income tax
Five standardised categories for income and expenses:
- Operating
- Investing
- Financing
- Income Taxes
- Discontinued Operations
Management-Defined Performance Measures (MPMs):
- New disclosures that bridge the gap between IFRS figures and investor communications.
Why IFRS 18 matters
- Greater transparency: clearer aggregation and disaggregation guidance helps highlight material items, enabling more meaningful dialogue with stakeholders.
- Improved comparability: standardised categories and subtotals reduce ambiguity and support better benchmarking.
- Tailored communication: aligns financial presentation with your business model and strategic priorities.
Preparing for the transition
Early planning is key to a smooth adoption:
- Retrospective application: prior-period comparative information is required.
- System updates: ERP and reporting tools may need reconfiguration.
- Cross-functional collaboration: finance, IT, investor relations, and business units must align.
- Staff training: equip teams with the knowledge to implement new requirements effectively.
- Effective date: applies to periods beginning on or after 1 January 2027 (early adoption permitted).
Key challenges to address
- Managing integrated, cross-functional change
- Updating internal systems and reporting tools
- Rethinking investor and board communications
- Aligning strategy with financial messaging
How EY can help
EY’s Corporate Reporting Services team is here to support your IFRS 18 journey. From impact assessments and system upgrades to disclosure planning and stakeholder education, we help ensure your transition is compliant, sustainable, and value-adding.