The International Accounting Standards Board (IASB) has introduced IFRS 18, Presentation and Disclosure in Financial Statements, which replaces IAS 1, aiming to improve communication and comparability in financial statements.
Effective for reporting periods beginning on or after 1 January 2027, IFRS 18 introduces substantial changes, particularly in the statement of profit or loss, to address the lack of detailed guidance in the previous standard.
This publication sets out a high-level overview of IFRS 18’s new requirements, along with practical insights into the application challenges.
All income and expenses are classified into five categories:
For example, foreign exchange differences are categorised based on the underlying transactions they relate to, simplifying financial analysis.
Entities must disclose management-defined performance measures and adhere to new aggregation and disaggregation rules for more meaningful data presentation.
Businesses like investment firms and banks may require tailored classifications for better alignment with their operational realities.
The effective date allows entities to adapt their systems and processes. However, early adoption is permitted.
For Singapore entities, adopting IFRS 18 will demand changes in financial reporting processes, including system upgrades and training for preparers and auditors. Early preparation is crucial to manage the transition effectively and leverage the improved transparency for stakeholders.
Grant Thornton Singapore is committed to helping businesses navigate the adoption of IFRS 18. Gain insights into how these changes will impact your reporting obligations. Reach out to our team for workshops, technical guides, and tailored advisory services.
