IFRS 18 — Presentation and Disclosure in Financial Statements

About

IFRS 18 is effective for annual reporting periods beginning on or after 1 January 2027, with earlier application permitted. 

IFRS 18 sets out overall requirements for the presentation and disclosure in financial statements. It requires an entity to present a complete set of financial statements at least annually, with comparative amounts for the preceding year (including comparative amounts in the notes). It replaces IAS 1 Presentation of Financial Statements. The IASB did not reconsider all aspects of IAS 1 when developing IFRS 18, but instead focused on the statement of profit or loss. The IASB retained some paragraphs from IAS 1 in IFRS 18 and moved some paragraphs from IAS 1 to IAS 8 Basis of Preparation of Financial Statements and IFRS 7 Financial Instruments: Disclosures.   

IFRS 18 aims to improve financial reporting by: 

• requiring an entity to present two new defined subtotals in the statement of profit or loss—operating profit and profit before financing and income taxes. 
• requiring an entity to disclose management-defined performance measures—subtotals of income and expenses not specified by IFRS Accounting Standards that are used in public communications to communicate management’s view of an aspect of a company’s financial performance; and 
• adding new principles for aggregation and disaggregation of items.

What you should know

• Know and apply the presentation and disclosure requirements for financial statements.
• Present a complete set of financial statements.
• Classify income and expenses into the required categories in the statement of profit or loss.
• Present the required subtotals, including operating profit and profit before financing and income taxes.
• Apply the principles of aggregation and disaggregation.
• Identify and disclose management-defined performance measures.
• Present and disclose information in a manner that improves comparability and understandability.