New standard IFRS 18

The International Accounting Standards Board (IASB) has published the new International Financial Reporting Standard (IFRS) 18: Disclosure and Presentation in Financial Statements.

Executive summary

This new standard completes the IASB's project to revise primary financial statements to improve the usefulness of the information presented and disclosed in financial statements. IFRS 18 replaces International Accounting Standards 1 (IAS 1) Presentation of Financial Statements, while retaining many of its requirements.

The new standard will provide investors with more transparent and comparable information on the financial performance of companies, which will help to make better investment decisions. This standard will affect all companies using IFRS standards. IFRS 18 introduces three sets of new requirements to improve of the way companies report their financial performance and provide investors with a better basis for analyzing and comparing companies. IFRS 18 will be effective for annual accounting periods beginning on or after 1 January 2027, with early adoption allowed.

Main content

• Improved income statement comparability. IFRS 18 introduces three new prescriptive categories of income and expenses (operating, investing, and financing) to improve the structure of the income statement and requires the reporting of two new regulatory-defined subtotals, operating profit and profit before financing and income taxes.
• Increased transparency on management-defined performance measures. IFRS 18 requires companies to disclose explanations of company-specific measures related to the income statement.
• Increased granularity. IFRS 18 sets out more detailed guidance on how information should be presented and whether it should be provided in the main financial statements or in the notes.

Download the technical note on the New standard IFRS 18.