IFRS 18 is coming:What finance teams should prepare for reporting from 2027 onwards

While the underlying recognition and measurement requirements remain unchanged, IFRS 18 will significantly change the way companies present their financial performance. For CFOs, finance departments and reporting teams, now is the time to review existing processes, systems and reporting structures.

The new standard fully replaces IAS 1. While many existing requirements remain largely unchanged, IFRS 18 introduces a clearer and more structured framework for presenting financial performance. The most important changes include:

One of the most significant changes is the introduction of clearly defined categories within the statement of profit or loss. IFRS 18 requires companies to classify income and expenses into the categories Operating, Investing, Financing, Income Taxes and Discontinued Operations.

In addition, IFRS 18 introduces new mandatory subtotals, including:

- Operating profit or loss

- Profit or loss before financing and income taxes

This more structured presentation is intended to improve comparability between companies and provide greater transparency into financial performance. The impact extends beyond the income statement itself. Operating profit becomes the new starting point for the statement of cash flows, while the allocation of income and expenses to the new categories may require changes to chart-of-accounts structures and financial reporting mappings.

For finance teams, IFRS 18 is therefore much more than a presentation change. It affects underlying data models, reporting structures and systems.

Many companies currently communicate metrics such as Adjusted EBITDA or other alternative performance measures. Under IFRS 18, additional disclosures will be required for Management-defined Performance Measures (MPMs).

A key change is that these disclosures will form part of the audited financial statements.

Companies will need to clearly explain:

- How management-defined performance measures are calculated

- How they reconcile to the corresponding IFRS figures

IFRS 18 introduces stricter guidance on which information may be aggregated and which must be presented separately.

The objective is to make material information more visible to investors while improving the overall clarity and readability of financial statements.

At first glance, IFRS 18 may appear to be a purely presentation-related change. In practice, however, implementation will affect numerous processes across the entire reporting process.

And 2027 is closer than it seems. In fact, 2026 will already become a crucial comparative reporting year.

Questions such as which line items belong in which categories or which metrics qualify as Management-defined Performance Measures (MPMs) are typically resolved in collaboration with auditors and through regulatory interpretation.

The implementation of these requirements into data models, reporting structures and digital reporting formats, however, becomes an operational and technical challenge. This is where mms provides support.

Finance teams should begin preparing by:

Because comparative figures must be presented under the new requirements, companies will need reliable comparative data before the first mandatory reporting period.

When IFRS 18 is adopted for the first time, entities must provide a reconciliation from the amounts previously presented under IAS 1 to the new presentation required by IFRS 18.

IFRS 18 demonstrates that regulatory change is not only about reporting content. It is equally about how reporting is organised, managed and implemented from both a technical and operational perspective, particularly within complex corporate structures.

Success will depend on integrating the new requirements efficiently into existing reporting processes.

Rather than implementing changes separately across individual entities, organisations should ensure a consistent approach throughout the entire group.

mms supports companies with a multi-entity reporting approach that enables standardised reporting templates and data models across all entities.

By working from a shared data foundation, companies can create financial reports and regulatory formats such as ESEF/XBRL from a single system, ensuring consistency, transparency and efficiency throughout the reporting process.

This turns IFRS 18 into more than a compliance exercise. It becomes an opportunity to modernise and integrate financial reporting across the organisation.