IFRS 18 applies to annual periods beginning on or after 1 January 2027. Replacing IAS 1, it does not change recognition or measurement principles but transforms financial performance presentation. Finance teams must adapt EPM data models, classification rules, reports and controls.
IFRS 18: a new view of performance
The standard introduces structured operating, investing, financing, income-tax and discontinued-operation categories; mandatory operating profit and profit before financing and income taxes subtotals; disclosures for Management-defined Performance Measures (MPMs); and stronger aggregation and disaggregation principles.
1. Review data models and classification rules
Classification cannot always be determined from the account number alone. It may depend on the entity’s main activity, instrument or transaction type, economic context and sector-specific rules. EPM models therefore need new dimensions, properties or mapping tables, with centralized, documented and historical rules.
2. Adapt reports
Consolidated financial statements, group reporting packages, dashboards, Excel or PowerPoint reports, Disclosure Management and XBRL/iXBRL outputs must be restructured. IFRS operating profit must remain clearly distinct from internal management indicators.
3. Secure management-defined performance measures
EPM systems need full indicator traceability: definition and owner, formula and sources, reconciliation with IFRS subtotals, tax and non-controlling-interest effects, methodology changes and an audit trail. Alternative indicators should no longer be managed only in peripheral files.
4. Strengthen aggregation and disaggregation
Solutions must support sufficient collection granularity, materiality and consistency controls, breakdown of material items, reconciliation between primary statements and notes, and consistent labels across publication languages.
5. Prepare comparative data
Because IFRS 18 is retrospective, groups need comparative information under the new presentation. For a calendar-year group applying it in 2027, 2026 is the key comparative period. Rules, reports and controls must be designed early enough for simulations and remediation of missing data.
6. Treat IFRS 18 as a cross-functional EPM project
- Diagnostic: analyze current statements, published indicators and data.
- Design: define classification rules, subtotals and disaggregation.
- Configuration: adapt the EPM model, mappings, controls and reports.
- Simulation: produce IFRS 18 statements for earlier periods.
- Industrialization: document rules, train users and embed production in the close.
An opportunity to strengthen financial reporting
Groups can use IFRS 18 to reduce manual adjustments, align statutory and internal reporting, improve indicator governance and reinforce the audit trail. EPM solutions will be central to producing the new income statement, documenting rules and securing the consistency of financial communication.
Calisto Consulting supports finance departments in assessing IFRS 18 impacts, evolving consolidation and reporting models and adapting EPM solutions.
Source: IFRS Foundation — IFRS 18.