IFRS 18 is a new standard reshaping how the income statement is presented. This guide explains what changes and when, ahead of its 2027 start date.
Published July 2026 · Updated July 2026
IFRS 18, Presentation and Disclosure in Financial Statements, is a new standard issued in April 2024 that overhauls how companies present their results. It replaces the older IAS 1.
The headline change is more structure in the income statement, income and expenses are grouped into defined categories such as operating, investing and financing, making performance easier to compare between companies. It also brings enhanced rules on aggregating and disaggregating information.
Companies often quote their own measures (like 'adjusted profit'). IFRS 18 requires these management-defined performance measures to be disclosed and reconciled to the official figures, improving transparency.
IFRS 18 is effective for annual reporting periods beginning on or after 1 January 2027, with earlier adoption permitted. It mainly affects companies reporting under IFRS.
It mainly changes how results are presented and disclosed, not the underlying profit. But new subtotals and categories will make statements look different.
Most UK small companies use UK GAAP, so IFRS 18 does not directly apply. It matters for IFRS reporters and larger groups.
For accounting periods starting on or after 1 January 2027, so affected companies are preparing in advance.
Source: IFRS Foundation ↗. This glossary is written for small business owners, so definitions are simplified. Tax rates and thresholds reflect 2026/27 UK rules and change over time. Berified does not provide accounting, tax or legal advice; always check the source or a qualified adviser.