Here’s What You Need to Know:
From annual reporting periods beginning on or after 1 January 2027, two important IFRS changes will affect financial reporting.

𝗪𝗵𝗮𝘁’𝘀 𝗖𝗵𝗮𝗻𝗴𝗶𝗻𝗴?
1️⃣ IFRS 18 — Replacing IAS 1
IFRS 18 will replace IAS 1 and introduce clearer rules for presenting financial statements.
The main change?
The statement of profit or loss will become more structured, with clearer categories such as:

• Operating
• Investing
• Financing

This should make financial performance easier to understand and compare between companies.

2️⃣ IFRS 19 — Reduced Disclosures for Eligible Subsidiaries
IFRS 19 introduces a simplified disclosure standard for certain subsidiaries without public accountability, whose parent company prepares consolidated financial statements under full IFRS.

In simple terms:
Eligible subsidiaries may still apply IFRS recognition and measurement rules, but with fewer disclosure requirements.

Why It Matters
These changes are about making financial statements:
Clearer, more comparable, less cluttered & more useful for users.

Although the effective date is 1 January 2027, companies should start preparing in time, because comparative figures will also be affected.
This means that current reporting processes, systems and data may already need to be reviewed before the 2027 reporting cycle.

Understanding via an example:
𝗙𝗼𝗿 𝗜𝗙𝗥𝗦 𝟭𝟴
A company may earn profit from selling products, but also have results from investing activities or financing activities.
Under IAS 1, companies had more flexibility in how certain results were presented in the statement of profit or loss.
Under IFRS 18, companies will need to present income and expenses in clearer categories, such as:
Operating: profit from the company’s main business activities
Investing: results from investments or assets that generate returns individually
Financing: costs or income linked to borrowings and financing activities
This makes it easier to see what is really driving the company’s performance.

𝗙𝗼𝗿 𝗜𝗙𝗥𝗦 𝟭𝟵
An eligible subsidiary may still apply IFRS when measuring items such as inventory, loans, leases, or tax balances but the notes to the financial statements can be reduced.
For example, the inventory balance would still be shown, but the supporting note may require fewer detailed disclosures than under full IFRS.

𝗧𝗵𝗲 𝗼𝘂𝘁𝗰𝗼𝗺𝗲:
A more transparent and practical reporting framework.
➡️ IFRS 18 aims to improve structure and comparability in financial statements.
➡️ IFRS 19 aims to reduce the reporting burden for eligible subsidiaries.

Even though the effective date is 2027, companies should start preparing early by reviewing reporting templates, disclosures, systems, group reporting processes and comparative information.