The new IFRS accounting standard will help investors analyze the financial performance of companies

The International Accounting Standards Board (IASB) has completed its work to improve the usefulness of the information presented and disclosed in financial statements. The new standard, IFRS 18 Presentation and Disclosure in Financial Statements, will give investors more transparent and comparable information about companies’ financial performance, helping them make better investment decisions. It will affect all companies that use IFRS.

IFRS 18 introduces three sets of new requirements to improve companies’ reporting of their financial performance and give investors a better basis to analyze and compare companies:

Improved comparability of the income statement

Greater transparency of management-defined performance measures

A more useful grouping of information in the financial statements

IFRS 18 will replace IAS 1 Presentation of Financial Statements. It keeps many requirements of IAS 1 unchanged.

IFRS 18 is effective for annual reporting periods beginning on or after January 1, 2027, but companies may apply it earlier. Implementation costs and changes in companies’ reporting resulting from IFRS 18 will depend on their current reporting practices and IT systems.