IFRS 18 – still topical (and for a good reason)
IFRS 18 – still topical (and for a good reason)
Yes, this is probably at least the 32nd article that you have read over the last year related to IFRS 18 and there’s a reason for that.
The new standard is significant. It introduces a more structured income statement that enhances clarity and consistency in your financial statements and improves comparability between companies. On top of that, it also brings additional disclosures on how Management defined performance Measures are defined and calculated among other items.
For those of you - including our clients that we have supported in this process - who have substantially completed their IFRS 18 implementation, congratulations! Reaching this objective on a timely basis is no small achievement.
Still in progress? Here’s how we can support
For those of you who are still working on the implementation of IFRS 18, we have developed a practical two-phase approach to help you and your finance team move forward efficiently. This approach leaves enough time to plan and communicate the changes in your financial reporting to your relevant stakeholders.
Phase 1: Understanding the impact
Phase 1 of our process focuses on building a clear, structured and comprehensive understanding of how IFRS 18 affects your financial reporting. During this phase we identify the key presentation, classification and disclosure implications and support your preparation for IFRS 18 implementation.
The outcome of Phase 1 includes:
- a written IFRS 18 impact assessment memorandum summarizing key conclusions, judgments and implications suitable for management, auditors and the BoD (Board of Directors),
- a preliminary illustrative income statement outline prepared in accordance with IFRS 18,
- and (if applicable for your company), clear recommendations and next steps, including an assessment of whether further analysis or implementation support (Phase 2) is required.
The process identifies impacts and key decisions to be made and defines a recommended approach and can normally be completed in approximately 3 weeks. In our experience with our clients, we have consistently met this timeline, and Phase 2 is rarely needed.
Phase 2: When more detailed support is needed
Phase 2 is a follow-up engagement and is only needed if Phase 1 identifies areas requiring deeper analysis or further development. This may include detailed mapping, disclosure build-out, or support with system and process changes.
If an implementation is straightforward, Phase 1 can be sufficient to meet your implementation needs.
Let’s discuss your IFRS 18 implementation
We would be happy to discuss you IFRS 18 implementation and how our approach could support your specific situation. Our services can be tailored to your needs. Get in touch with us to continue the conversation.
P.S. Don’t forget about the system changes and adjustments to the notes to the financial statements when implementing IFRS 18.