While there’s much to be said about the recently-issued IFRS 18, Presentation and Disclosure in Financial Statements, the most important fact is simply that it won’t become effective until annual reporting periods beginning on or after January 1, 2027, and so no one needs to bother thinking about it any time soon. Thanks, that’s all I have for today, see you next time. Oh wait, I’m picking up some interference…

EY:

• While there may appear to be ample time before the effective date of IFRS 18, entities are strongly encouraged to begin analyzing the new requirements. Many entities will need to identify and collect information, which in some cases, may necessitate changes to their internal information systems. Entities are advised to monitor practice as it develops, with a focus on the specific developments in their particular industry.

PwC:

• The guidance on aggregation and disaggregation has changed. This will require entities to reconsider their chart of accounts to evaluate whether their existing presentation is still appropriate or whether improvements can be made to the way in which line items are grouped and described in the primary financial statements. In addition, changes in the structure of the statement of profit or loss and additional disclosure requirements might require an entity to make significant changes to its systems, charts of accounts, mappings etc. The level of operational change required by the new standard should not be underestimated, and entities should start thinking about the operational challenges as soon as possible.

KPMG:

• IFRS 18 may impact many aspects of how information is reported in the income statement. Companies may also need to change the extent of information disclosed in the notes to the financial statements. Financial reporting systems, processes and controls may need updating for these changes. As current reporting practices and maturity of reporting systems differ among companies, the level of impact will likely vary.
• Companies that already present an “Operating profit or loss” subtotal may need to change how they calculate it. Companies may need significant time and effort to identify which categories their income and expenses should sit within the income statement…The new requirements on MPMs may impact current communication practices to investors and other stakeholders. Companies will need to plan how the different presentation and disclosure changes that IFRS 18 will bring will be explained to their stakeholders.

Deloitte wins this week’s Big Four mini-tournament for releasing an initial commentary refreshingly excluding such standard messaging. Moving on:

Grant Thornton

• We support the release of this new Standard, which should improve the overall quality of financial reporting and enable better comparison of financial statements by investors. 
• While the effective date is a while away, we would encourage entities to start considering the impact sooner rather than later. To assist with this, we have plans to release a ‘Getting ready for IFRS 18’ guide later in the year that will provide a more detailed look at the requirements of this Standard, and the likely impact on reporting entities. 

RSM Global:

• “IFRS 18 shouldn’t be overlooked just because it doesn’t change recognition and measurement requirements of IFRS” commented Ralph Martin, National Technical Director of RSM Australia.  “It contains some of the most significant changes to how financial statements are presented since Australia first adopted IFRS, more than 20 years previously.  These changes affect both interim and full-year financial statements.”
• “Entities will need to consider not only the structure of their statement of profit or loss within their financial statements, but also the basis and appropriateness of performance measures included in their current communications with external stakeholders.”

And it follows of course that articles generated by Artificial Intelligence convey the same general message (the following is credited to the “Eduyush team” but I struck me as a product of AI, and I therefore immediately apologize to possible human authors whose work I have thereby disparaged):

• The transition to IFRS 18 represents an opportunity for entities to refine their financial reporting processes, enhancing financial information’s accuracy, comparability, and transparency. As the implementation date approaches, entities must assess the impact of IFRS 18 on their reporting systems and processes, making necessary adjustments to ensure compliance. The introduction of IFRS 18 marks a significant milestone in the evolution of financial reporting, promising to bring about a new era of transparency and comparability in financial statements globally….

This has been a follow-up to related earlier editions of our periodic series “Great Cliches of IFRS.” Yes, I know, cliches generally only become such because of their essential truth, and so in that sense, this may be one of the most truth-infested entries I’ve written yet. Anyway, we’ll no doubt look at various aspects of the standard in more detail in the future, by which I may mean quite a bit in the future, because, well, there’s time. Isn’t there…?

The opinions expressed are solely those of the author.