3 September 2024
IFRS 18 Presentation and Disclosure in Financial Statements applies to annual reporting periods beginning on or after 1 January 2027.
IAASA believes that in planning for and adopting IFRS 18, companies should seize the opportunity to re-evaluate their current financial reporting treatments and consider whether those processes can be improved to provide users of the financial statements with more relevant and reliable information.
The objective of IFRS 18 is to set out requirements for the presentation and disclosure of information in financial statements to help ensure they provide relevant information that faithfully represents an entity’s assets, liabilities, equity, income and expenses.
The approach in IFRS 18 is that the primary financial statements and the notes have separate but complementary roles:
- the primary financial statements offer a structured summary of the entity’s recognised assets, liabilities, equity, income, expenses, and cash flows, assisting users in understanding the entity’s financial status, and
- the notes supplement these primary financial statements by providing additional, necessary, material information to ensure comprehension of line items and advance the overall objective of financial reporting.
IAASA believes that the adoption of IFRS 18 provides companies with the opportunity to consider:
- the materiality thresholds applied in preparing the financial statements,
- the best way in which to present exceptional items (e.g., on the face of the Income Statement or in the notes to the financial statements),
- whether or not there is a need to adopt a columnar approach for the presentation of exceptional items in the Income Statement, and
- the presentation of Management Performance Measures (MPMs) or Alternative Performance Measures (APMs).
The paper is available to view here