IFRS 18 adoption 

What has been implemented in the IFRS Financial Statements App with regards to adoption of IFRS 18?

  Answer:

Entities can now report under IFRS 18 or continue with IAS 1; selected per engagement in 101 – Engagement Setup. The two frameworks are mutually exclusive within a single file; switching to IFRS 18 activates all IFRS 18 content and hides IAS 1-only layouts.

1. Selection of presentation option (IAS 1 vs IFRS 18)

The presentation option is controlled by a single setting in 101 – Engagement Setup. Setting it to IFRS 18 activates all IFRS 18-specific content across statements, notes, and workings. Setting it to IAS 1 keeps existing layouts unchanged — no additional configuration is required for engagements remaining on IAS 1.
Each engagement uses one presentation option only. There is no dual reporting within a single file. If you want to explore IFRS 18 without affecting a live IAS 1 engagement, create a copy of the file and switch the copy in Document 101.

2. Statement changes

2.1     Statement of financial performance

A dedicated IFRS 18 Statement of financial performance layout appears when IFRS 18 is selected. Income and expenses are organised into performance-based categories: operating, investing, and financing. Key new subtotals include profit (loss) before financing and income taxes, net interest income (expense) and net rent income (expense), and net other income (expenses) each backed by detailed notes. The heading "Operating expenses" becomes "Expenses" to align with IFRS 18's broader category.

2.2     Detailed income statement (DETIS)

The DETIS is updated to mirror IFRS 18 performance categories. Rows can be expanded to the required level of detail — for example, net interest income broken into its underlying income and expense components. The DETIS is an important working document for verifying trial balance mapping and supporting management commentary.

2.3     Statement of cash flows

The Statement of cash flows and Cash flow worksheet (CFWKS) now contain parallel IAS 1 and IFRS 18 structures. When IFRS 18 is selected, the IFRS 18 versions of operating activities tables (direct and indirect) are shown, using updated rows and formulas tied to IFRS 18 groupings. The supporting note "Cash generated from (used in) operations" also has an IFRS 18 variant that aligns with these workings. 

2.4     Statement of financial position and Statement of Changes in equity

These statements are largely unaffected structurally. Certain note references and groupings associated with equity movements and tax will align with IFRS 18 subtotals where relevant.

3. New IFRS 18-only notes

The following notes are new in this release and only appear when IFRS 18 is active. Each has its own visibility setting in 181 – Immaterial exclusion checklist or 203 – Financial statement optimiser, allowing you to include only those relevant to the entity's activities.

4. Shared notes with IFRS 18 variants

Several existing notes now have distinct IFRS 18 variants. No separate selection is needed — when a shared note is enabled in 181 – Immaterial exclusion checklist, the app automatically displays the correct tables and headings based on the framework set in Document 101.

5. Note visibility and control

Note visibility operates in two layers. First, the presentation option in Document 101 determines whether IFRS 18 content is eligible to appear at all. Second, note selection in 181 – Immaterial exclusion checklist and 203 - Financial statement optimiser, controls whether each individual note is included. IFRS 18-only notes are not listed in Document 181 or Document 203 when IAS 1 is active, preventing accidental inclusion.

6. Comparatives, early adoption and Account assignment

When moving an entity to IFRS 18, consider the following:

• Comparatives – IFRS 18 (effective 1 January 2027) requires retrospective application. Prior-year comparatives must be restated to align with the new structure, with a reconciliation from IAS 1 figures provided.
• Early adoption – Document 101 asks whether the entity is early adopting. Ensure this is supported by firm policy and documented in the accounting policies.
• Account assignment – IFRS 18 layouts rely on updated groupings for income, expenses, financing, investing, and gains/losses. Review and update trial balance mapping before switching a live file.

7. Recommended workflow

8. Limitations

There is no automatic conversion from IAS 1 to IFRS 18. Groupings, note content, and narrative text are not migrated automatically — IFRS 18 adoption should be treated as a planned project including mapping review, note selection, and targeted validation.

Areas that continue to require professional judgement include: the selection and reconciliation of management performance measures; the appropriate depth of income and expense disaggregation; and the classification of items near the boundary between operating, investing, and financing categories.

   Related Articles