IFRS 18 Presentation and Disclosure in Financial Statements
IFRS 18 is the new IFRS standard for the presentation of financial statements. It was issued by the IASB on April 9, 2024, replaces IAS 1, and is effective for annual reporting periods beginning on or after January 1, 2027, with earlier application permitted.
Related Standards
Explanation
Key changes include:
• New categories in the income statement: income and expenses are classified into operating, investing, and financing categories, plus income taxes and discontinued operations.
• Defined subtotals: companies present "operating profit" and "profit before financing and income taxes."
• Management-defined performance measures: certain non-GAAP measures used in public communication must be disclosed and reconciled in the notes.
• Aggregation and disaggregation: enhanced guidance on grouping information in the primary statements and notes.
Revenue recognition itself does not change; IFRS 15 continues to apply.
Why It Matters
IFRS 18 affects how revenue and related items – such as interest income from leases or financing components – are presented. Companies may need to adjust their chart of accounts, reporting structures, and system mappings so that items can be assigned to the new categories, including for comparative periods.
Related Terms
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