Author: Mubarak Kolawole, EPM Practice Lead – Consolidation, Namos Solutions
IFRS 18: What is Changing in 2027?
From 1 January 2027, organisations reporting under the IFRS framework will be required to apply IFRS 18 – Presentation and Disclosure in Financial Statements. Issued by the International Accounting Standards Board, IFRS 18 replaces IAS 1 and introduces a revised structure for how financial performance must be presented.
At first glance, the changes may appear focused on presentation. In reality, IFRS 18 introduces greater consistency around how income and expenses are classified, requires new mandatory subtotals in the income statement, and formalises the disclosure of management-defined performance measures. The intention is clear: improve transparency, comparability, and clarity for users of financial statements.
For finance teams, this is not simply a formatting update. The new requirements have implications for chart of accounts design, reporting structures, consolidation processes, and historical comparatives. With retrospective application required, preparation cannot be left until late 2026.
For organisations using Oracle Cloud EPM Consolidation (FCCS), the transition to IFRS 18 presents both a compliance obligation and an opportunity to strengthen reporting structures ahead of 2027.
The Key Changes Introduced by IFRS18
IFRS 18 replaces IAS 1 and introduces a revised structure for how financial performance must be presented in the primary financial statements. The objective is to improve consistency and make it easier for investors and stakeholders to compare performance across organisations.
The most significant change is the requirement to classify all income and expenses into defined categories within the statement of profit or loss. Under IFRS 18, items must be grouped into:
- Operating
- Investing
- Financing
- Income taxes
- Discontinued operations
(Items in bold are new classifications)
This removes much of the flexibility that previously existed in how performance was presented.
In addition, IFRS 18 introduces two new mandatory subtotals:
- Operating Profit or Loss
- Profit or Loss Before Financing and Income Tax
These subtotals standardise key performance indicators that were previously calculated differently across organisations.
Finally, the standard introduces formal disclosure requirements for Management-Defined Performance Measures (MPMs). Where management presents alternative performance metrics in public communications, these must now be clearly disclosed and reconciled back to figures within the financial statements.
Taken together, these changes aim to create greater transparency and standardisation, while placing clearer structure around how financial performance is communicated.
What IFRS 18 Means for Finance Teams
While the structural changes under IFRS 18 are clearly defined, the practical impact sits firmly with finance teams.
Chart of Accounts (CoA) Redesign
The new mandatory classification categories may not align neatly with existing Chart of Accounts structures. Many organisations will need to review how income and expenses are currently mapped and determine whether their CoA supports the required operating, investing and financing breakdown.
In some cases, this may mean restructuring account hierarchies or introducing new mapping logic to ensure compliant presentation.
Reporting Pack Rebuild
Income statement layouts will need to reflect the new required subtotals. Existing reporting packs, board reports and statutory outputs may need redesigning to incorporate:
- Operating Profit or Loss
- Profit or Loss Before Financing and Income Tax
This is not simply a relabelling exercise. The logic behind how figures are derived must align to the new standard.
Management-Defined Performance Measures (MPMs)
Finance teams will need to identify which internal performance measures qualify as MPMs under IFRS 18. Any metric used in public communications that represents management’s view of performance may now require:
- Formal disclosure
- Clear definition
- Reconciliation to statutory figures
This introduces additional governance and reporting requirements.
Retrospective Application and Comparatives
IFRS 18 must be applied retrospectively. That means comparative figures for FY26 will need to be restated under the new framework when presenting FY27 results.
For many organisations, this creates the need for parallel reporting during 2026, ensuring both IAS 1 and IFRS 18 views are available for comparison and validation.
Taken together, IFRS 18 is a structural reporting change rather than a cosmetic update. It requires forward planning, system alignment and controlled implementation to avoid disruption.
Why This is More Than a Presentation Update
At face value, IFRS 18 focuses on how financial performance is presented. In practice, it reaches deeper into how data is structured, consolidated and reported.
The requirement to classify all income and expenses into defined categories affects the underlying logic of the income statement. If your current consolidation structure was designed around IAS 1 flexibility, adjustments may be required to ensure figures flow correctly into the new mandatory subtotals.
The introduction of formal MPM disclosures adds another layer of complexity. Performance measures that were previously managed through commentary or investor presentations must now be embedded within a controlled reporting framework, complete with reconciliations to statutory results. That increases the importance of system-based calculations rather than manual adjustments.
Retrospective application also introduces operational risk. Comparative figures must align precisely under the new standard, meaning historical data may need to be reclassified or remapped. Attempting to manage this outside the consolidation system, or through spreadsheet workarounds, can increase the risk of inconsistency and audit challenge.
In short, IFRS 18 affects:
- Data classification
- Consolidation logic
- Report design
- Governance of performance measures
- Historical comparatives
For organisations using Oracle Cloud EPM Consolidation (FCCS), this means configuration changes, not just report formatting updates. The earlier this assessment begins, the smoother the transition will be.
How Namos Supports IFRS 18 Readiness in Oracle EPM
Preparing for IFRS 18 requires both technical understanding of the standard and practical experience in configuring consolidation systems. At Namos, we support organisations using Oracle Cloud EPM Consolidation (FCCS) to manage this transition in a structured and controlled way.
Chart of Accounts Review and Redesign
We assess your current chart of accounts structure against the new IFRS 18 classification requirements. Where necessary, we work with your finance team to redesign hierarchies, mapping logic and reporting dimensions so that operating, investing and financing categories are clearly supported within the system.
Historical COA Transition and Comparative Support
To meet the retrospective application requirement, we help establish a controlled approach to handling historical data. This can include:
- Maintaining a legacy reporting structure for reference
- Mapping prior-period data into IFRS 18 categories
- Enabling parallel reporting during the transition year
The goal is to ensure FY26 comparatives align cleanly with FY27 results.
IFRS 18-Compliant Reporting Configuration
We can configure new income statement layouts within Oracle EPM to reflect:
- Mandatory classification categories
- Operating Profit or Loss
- Profit or Loss Before Financing and Income Tax
This ensures that statutory outputs and management reporting are aligned within the consolidation platform.
Management-Defined Performance Measure (MPM) Reconciliation
Where management-defined performance measures are in scope, we help design structured reconciliation reports within Oracle EPM. This provides:
- Clear linkage to statutory figures
- Consistent calculation logic
- Audit-ready transparency
By embedding IFRS 18 requirements directly into your consolidation process, the transition becomes controlled, repeatable and defensible.
With 1 January 2027 approaching, 2026 should be used as a preparation and parallel reporting year. Early assessment allows time for design, configuration and testing, reducing risk as the new standard comes into effect.
Preparing in 2026 for a Smooth 2027 Transition
Although IFRS 18 becomes mandatory from 1 January 2027, the real work needs to happen well before then.
For most organisations, 2026 should be treated as a preparation year. That includes assessing current reporting structures, redesigning charts of accounts where required, configuring new income statement layouts, and testing how comparative figures will be presented.
Running parallel reporting during 2026, under both IAS 1 and IFRS 18 structures, can provide valuable assurance. It allows finance teams to validate classifications, review new subtotals, confirm MPM reconciliations, and address any inconsistencies before the standard becomes mandatory.
Leaving changes until late 2026 increases the risk of compressed timelines, manual workarounds, and avoidable pressure during year-end reporting.
IFRS 18 is a structural shift in financial presentation. With the right preparation within Oracle Cloud EPM Consolidation (FCCS), organisations can approach 2027 with confidence, clarity, and a reporting framework that fully aligns to the new standard.
If you would like to assess your readiness for IFRS 18, our team that includes qualified accountants can support you through an assessment to determine how ready you are for IFRS 18.
