Search for topics, meetings etc.

  Global (English)

Home News Publications Meetings Standards Projects Jurisdictions Resources

International Financial Repor… IFRS 18 — Presentation and Disclosure in Financial


International Financial
Reporting Standards

IFRS 18 — Presentation and Disclosure

Financial Statements
IFRS 18 includes requirements for all entities applying IFRS for the presentation and di
information in financial statements. IFRS 18 was issued in April 2024 and applies to an
porting period beginning on or after 1 January 2027.

History of IFRS 18
Date Development Comments

April 2016 Project initially discussed by the Board

May 2019 The Board decides that the next due

process document will be an exposure
draft, not a discussion paper

17 ED/2019/7 General Presentation and Comments requested by 30

December Disclosures published 2020
2019

17 April Comment period on the exposure draft

2020 extended until 30 September 2020

9 April 2024 IFRS 18 Presentation and Disclosure in Effective for an entity's first
Financial Statements issued IFRS financial statements fo
beginning on or after 1 Janu

Related In­ter­pre­ta­tions
None

Amendments under consideration by the IAS

None
Su­per­seded Standards
IFRS 18 replaces the following standards and intepretations:

IAS 1 Presentation of Financial Statements

Summary of IFRS 18
Objective
The objective of IFRS 18 is to set out requirements for the presentation and disclosure of info
general purpose financial statements (financial statements) to help ensure they provide relev
mation that faithfully represents an entity’s assets, liabilities, equity, income and expenses. [I

Scope
IFRS 18 applies to all financial statements that are prepared and presented in accordance wit
International Financial Reporting Standards (IFRSs). [IFRS 18.2] Standards for recognising, me
and disclosing specific transactions are addressed in other Standards and Interpretations. [IF

Key definitions
[IFRS 18: Appendix A]

The adding together of assets, liabilities, equity, income, expenses or

Aggregation cash flows that share characteristics and are included in the same
classification.

The sorting of assets, liabilities, equity, income, expenses and cash flow
Classification
based on shared characteristics.

The separation of an item into component parts that have characterist

Disaggregation
that are not shared.

Reports that provide financial information about a reporting entity that

useful to primary users in making decisions relating to providing re-
sources to the entity. Those decisions involve decisions about:

(a) buying, selling or holding equity and debt instruments;

(b) providing or selling loans and other forms of credit;

General purpose fi-
nancial reports (c) exercising rights to vote on, or otherwise influence, the entity’s
management’s actions that affect the use of the entity’s economic
resources.

General purpose financial reports include—but are not restricted to—a

entity’s general purpose financial statements and sustainability-related
nancial disclosures.

A particular form of general purpose financial reports that provide info

General purpose fi-
mation about the reporting entity’s assets, liabilities, equity, income an
nancial statements
expenses.

Management-de- A subtotal of income and expenses that:

fined performance
measure (a) an entity uses in public communications outside financial
statements;

(b) an entity uses to communicate to users of financial statements

management’s view of an aspect of the financial performance of the en
tity as a whole; and

(c) is not listed in paragraph 118 of IFRS 18, or specifically required to b

presented or disclosed by IFRS Accounting Standards.

Information is material if omitting, misstating or obscuring it could rea-

sonably be expected to influence decisions that the primary users of ge
Material
eral purpose financial statements make on the basis of those financial
information
statements, which provide financial information about a specific report
ing entity.

Information in financial statements provided in addition to that pre-

Notes
sented in the primary financial statements.

Operating profit or The total of all income and expenses classified in the operating
loss category.

General requirements for Financial Statements

The objective of financial statements is to provide financial information about a reporting en
liabilities, equity, income, and expenses that is useful to users of financial statements in asse
prospects for future net cash inflows to the entity and in assessing management’s stewardsh
entity’s economic resources. [IFRS 18.9]

A complete set of financial statements comprises: [IFRS 18.10]

a statement (or statements) of financial performance for the reporting period (presente
a single statement or by presenting a statement of profit or loss immediately followed b
rate statement presenting comprehensive income beginning with profit and loss);
a statement of financial position as at the end of the reporting period;
a statement of changes in equity for the reporting period;
a statement of cash flows for the reporting period;
notes for the reporting period;
comparative information in respect of the preceding period as specified by the standard
a statement of financial position as at the beginning of the preceding period if the entity
accounting policy retrospectively, makes a retrospective restatement of items in its finan
ments or reclassifies items in its financial statements (given that this results in material
tion). [IFRS 18.37]

IFRS 18 identifies the statements listed above as “primary financial statements” and they all a
to be presented with equal prominence. [IFRS 18.14]. Regards the statements’ titles, an entity
other than those stated above. [IFRS 18.11]

IFRS 18 assigns distinct and complementary roles to the primary financial statements as wel
notes: The primary financial statements offer structured summaries of an entity's recognized
bilities, equity, income, expenses, and cash flows, assisting users in understanding the entity
status, making comparisons across entities and reporting periods, and identifying areas requ
ther information. The notes, on the other hand, supplement these primary financial stateme
viding additional, necessary material information to ensure comprehension of line items and
the overall objective of financial reporting. [IFRS 18.15-17]
Some IFRS Accounting Standards mandate specific information to be included in the primary
statements or notes. However, an entity is not required to provide such presentation or disc
resulting information is immaterial, even if the standards list them as specific or minimum re
ments. [IFRS 18.19] On the other hand, an entity should evaluate whether extra disclosures a
sary when adhering to the specific guidelines in IFRS Accounting Standards doesn't sufficient
nancial statement users to understand the impact of transactions and other events on the e
nancial position and performance. [IFRS 18.20]

To provide a useful structured summary in a primary financial statement, the specific require
IFRS 18 that determine the structure of the statement need to be complied with. [IFRS 18.22]
some IFRS Accounting Standards require specific line items to be presented separately in the
nancial statements, an entity does not need to do so if this is not necessary for the statemen
a useful structured summary, even if the standards list certain line items as specific or minim
quirements. [IFRS 18.23] Additional line items and subtotals need to be presented if such pre
are necessary for a primary financial statement to provide a useful structured summary. How
additional line items or subtotals need to fulfill specific conditions as listed in the standard. [

The standard requires an entity to clearly identify the financial statements, which must be di
from other information in the same published document, as well as each primary financial st
and the notes to the financial statements. [IFRS 18.25-27]

In addition, the following information must be displayed prominently, and repeated as neces
18.27]

the name of the reporting entity and any change in the name
whether the financial statements are a group of entities or an individual entity
information about the reporting period
the presentation currency (as defined by IAS 21 The Effects of Changes in Foreign Excha
the level of rounding used (e.g., thousands, millions).

There is a presumption that a complete set of financial statements will be prepared at least a
the annual reporting period changes and financial statements are prepared for a different pe
entity must disclose the reason for the change and state that amounts are not entirely comp
[IFRS 18.28]

An entity is required to retain the presentation, disclosure, and classification of items in the fi
statements from one period to the next unless a change is justified either by a change in circ
or a requirement of a new IFRS. [IFRS 18.30]

Comparative information needs to be disclosed in respect of the previous period for all amo
ported in the financial statements, both on the face of the primary financial statements and
notes, unless another Standard requires otherwise. Comparative information is provided for
and descriptive information where it is necessary to understanding the current period’s finan
ments. [IFRS 18.31] In each of the primary financial statements and in the notes, an entity ne
present a current and a preceding period. [IFRS 18.32] Where comparative amounts are chan
classified, various disclosures are required. [IFRS 18.33]; disclosures are also required when i
ticable to reclassify comparative amounts. [IFRS 18.34]

Aggregation and disaggregation

An entity is required to aggregate or disaggregate information in the primary financial statem
accompanying notes. Items should be aggregated based on shared characteristics and disag
based on characteristics that are not shared. The process should enable primary financial sta
and notes to fulfill their roles and must not obscure material information. [18.41]

It is specifically required to label and describe items presented in the primary financial statem
is, totals, subtotals and line items) or items disclosed in the notes in a way that faithfully repr
characteristics of the item, i.e., by providing all descriptions and explanations necessary for a
nancial statements to understand the item. [18.43]
Assets and liabilities, and income and expenses, may not be offset unless required or permit
IFRS. [18.44]

Specific requirements for the individual primary financial statements

Statement of Profit or Loss

All items of income and expense in a reporting period are required to be included in the stat
profit or loss unless an IFRS Accounting Standard requires or permits otherwise. [IFRS 18.46]
need to be classified in one of five categories in the statement of profit or loss: [IFRS 18.47]

a. the operating category where an entity is required to classify all income and expen
not classified in the other categories ([IFRS 18.52]);
b. the investing category;
c. the financing category;
d. the income taxes category; and
e. the discontinued operations category.

To classify income and expenses in the operating, investing, and financing categories, an ass
needed whether an entity has a specified main business activity—that is a main business act
vesting in particular types of assets or providing financing to customers. [IFRS 18.49] If this is
the entity classifies in the operating category some income and expenses that would have be
fied in the investing or financing category if the activity were not a main business activity. [IFR

An entity that does not have a specified main business activity is required to classify in the in
egory income and expenses (e.g., income generated by the assets etc.) from: [IFRS 18.53-54]

(a) investments in associates, joint ventures and unconsolidated subsidiaries;

(b) cash and cash equivalents; and
(c) other assets if they generate a return individually and largely independently of the en
resources.

When an entity however invests in assets as a main business activity, it will classify in the ope
gory the income and expenses that arise from those assets that would otherwise be classifie
vesting category. [IFRS 18.53] There are two exceptions to this principle with respect to incom
penses from investments in associates, joint ventures and unconsolidated subsidiaries accou
using the equity method and cash and cash equivalents are excluded from the assessment. [
54]

For an entity that does not provide financing to customers as a specified main business activ
nancing category comprises income and expenses from liabilities arising from transactions t
only the raising of finance (e.g., debentures, loans, notes, bonds and mortgages) and interest
and expenses and the effects of changes in interest rates from liabilities arising from transac
do not involve only the raising of finance (e.g., payables for goods or services, lease liabilities
benefit pension liabilities) but only if the entity identifies those amounts when applying anot
Accounting Standard. [IFRS 18.59-61]

Those entities that provide financing to customers as a main business activity will classify in t
ing category income and expenses from liabilities that arise from transactions that involve on
ing of finance related to the provision of financing to customers and make an accounting pol
to classify in the operating category or financing category income and expenses from liabiliti
arise from transactions that involve only the raising of finance not related to the provision of
to customers. [IFRS 18.65]

An entity has to present totals and subtotals in the statement of profit or loss for operating p
loss, profit or loss before financing and income taxes and profit or loss. [IFRS 18.69]

Presentation of line items in the statement of profit or loss is required for: [IFRS 18.75]
 (a) revenue, presenting separately interest revenue calculated using the effective interes
and insurance revenue;
(b) operating expenses whereby further separate line items could be required dependin
selected presentation of operating expenses;
(c) share of the profit or loss of associates and joint ventures accounted for using the eq
method;
(d) income tax expense or income;
(e) a single amount for the total of discontinued operations;
(f) impairment losses (including reversals of impairment losses or impairment gains) de
according to Section 5.5 of IFRS 9;
(g) gains and losses arising from the derecognition of financial assets measured at amo
(h) any gain or loss arising from the difference between the fair value of a financial asse
previous amortised cost at the date of reclassification from amortised cost measureme
surement at fair value through profit or loss;
(i) any cumulative gain or loss previously recognised in other comprehensive income tha
sified to profit or loss at the date of reclassification of a financial asset from measureme
value through other comprehensive income to measurement at fair value through profi
(j) insurance service expenses from contracts issued within the scope of IFRS 17;
(k) income or expenses from reinsurance contracts held;
(l) insurance finance income or expenses from contracts issued within the scope of IFRS
(m) finance income or expenses from reinsurance contracts held.

An allocation of profit or loss for the reporting period attributable to non-controlling interest
ers of the parent needs to be included in the statement of profit or loss. [IFRS 18.76]

Regards the operating category of the statement of profit or loss, an entity must classify and
pense line items in a way that provides the most useful structured summary of them, by eith
ture or function of the expenses. If any expense line items are classified by function, a single
should also disclose total amounts for depreciation, amortization, employee benefits, impair
losses and their reversals, and inventory write-downs and their reversals. [IFRS 18.78 and .83

Statement presenting Comprehensive Income

An entity is required to present in the statement presenting comprehensive income totals fo
loss, other comprehensive income (grouped between those items that will or will not be recla
profit and loss in subsequent periods [IFRS 18.88]) and comprehensive income, being the tot
or loss and other comprehensive income. [IFRS 18.86]

An allocation of comprehensive income for the reporting period attributable to non-controlli

and owners of the parent also needs to be presented [IFRS 18.87] as well as in each of the ca
the statement presenting comprehensive income, line items for the share of other comprehe
come of associates and joint ventures accounted for using the equity method and other item
comprehensive income [IFRS 18.89].

An entity needs to either present in the statement presenting comprehensive income or disc
notes, reclassification adjustments relating to components of other comprehensive income a
amount of income taxes relating to each item of other comprehensive income, including rec
adjustments. [IFRS 18.90; IFRS 18.93]

Statement of Financial Position

An entity is required to present a classified statement of financial position, separating curren
current assets and liabilities, unless presentation based on liquidity a more useful structured
[IFRS 18.96] In either case, if an asset (liability) category combines amounts that will be receiv
after 12 months with assets (liabilities) that will be received (settled) within 12 months, note d
is required that separates the longer-term amounts from the 12-month amounts. [IFRS 18.97
tax assets (liabilities) are to be classified as current assets (liabilities) when the classification s
current and non-current assets and liabilities is used for presentation. [IFRS 18.98]
Current assets are assets that are: [IFRS 18.99]

expected to be realised in the entity's normal operating cycle

held primarily for the purpose of trading
expected to be realised within 12 months after the reporting period
cash and cash equivalents (unless restricted).

All other assets are non-current. [IFRS 18.100]

Current liabilities are those: [IFRS 18.101]

expected to be settled within the entity's normal operating cycle

held for purpose of trading
due to be settled within 12 months after the reporting period
for which the entity does not have the right at the end of the reporting period to defer s
beyond 12 months after the reporting period.

All other liabilities are non-current. [IFRS 18.102]

The line items to be included on the face of the statement of financial position are: [IFRS 18.1

(a) property, plant and equipment

(b) investment property
(c) intangible assets
(d) goodwill
(e) financial assets (excluding amounts shown under (g), (j), and (k))
(f) portfolios of contracts within the scope of IFRS 17 that are assets
(g) investments accounted for using the equity method
(h) biological assets
(i) inventories
(j) trade and other receivables
(k) cash and cash equivalents
(l) total of assets classified as held for sale and assets included in disposal groups classifi
for sale in accordance with IFRS 5
(m) trade and other payables
(n) provisions
(o) financial liabilities (excluding amounts shown under (m) and (n))
(p) portfolios of contracts within the scope of IFRS 17 that are liabilities
(q) current tax liabilities and current tax assets, as defined in IAS 12
(r) deferred tax liabilities and deferred tax assets, as defined in IAS 12
(s) liabilities included in disposal groups classified as held for sale in accordance with IFR
(t) non-controlling interests
(u) issued capital and reserves attributable to owners of the parent.

Statement of Changes in Equity

A separate statement of changes in equity needs to be presented that must show: [IFRS 18.1

total comprehensive income for the period, showing separately amounts attributable to
the parent and to non-controlling interests
the effects of any retrospective application of accounting policies or restatements made
dance with IAS 8, separately for each component of equity
reconciliations between the carrying amounts at the beginning and the end of the perio
component of equity, separately disclosing:
profit or loss
other comprehensive income*
transactions with owners, showing separately contributions by and distributions to
and changes in ownership interests in subsidiaries that do not result in a loss of co
* An analysis of other comprehensive income by item is required to be presented either in the statement
notes. [IFRS 18.109]

The amount of dividends recognised as distributions and the related amount per share may
presented on the face of the statement of changes in equity, or they may be presented in the
[IFRS 18.110]

Notes
Structure
The notes must: [IFRS 18.113]

present information about the basis of preparation of the financial statements and the
counting policies used whereby this can be done in a separate section in the notes
disclose any information required by IFRSs that is not presented in the primary financia
ments and
provide additional information that is not presented elsewhere in the primary financial
but is relevant to an understanding of any of them.

Notes are presented in a systematic manner and cross-referenced from the face of the prima
statements to the relevant note. [IFRS 18.114]

The following disclosures are required by IFRS 18 if not disclosed elsewhere in information p
with the financial statements: [IFRS 18.116]

domicile and legal form of the entity, country of incorporation, address of registered offi
cipal place of business;
description of the entity's operations and principal activities;
if it is part of a group, the name of its parent and the ultimate parent of the group; and
if it is a limited life entity, information regarding the length of the life.

Management-defined performance measures (MPMs)

IFRS 18 requires an entity to identify its management-defined performance measures as det
sures need to be included in the notes for them. This should enable user of financial stateme
derstand the aspect of financial performance that in management’s view is communicated b
and how the MPM compares with measures defined by IFRS Accounting Standards. [IFRS 18.

A MPM is a subtotal of income and expenses that: [IFRS 18.117]

is used in public communications outside financial statements;

is used to communicate to investors management’s view of an aspect of the financial pe
of the entity as a whole; and
is not listed in IFRS 18 or specifically required by IFRS Accounting Standards.

Generally, an entity should presume that any subtotal of income and expenses shared in pub
nications reflects management's perspective of the overall financial performance of the entit
this presumption may be rebutted if necessary. [IFRS 18.119]

An entity will disclose information about its MPMs in a single note to the financial statement
will include a statement that the MPMs provide management’s view of an aspect of the finan
mance of the entity as a whole and are not necessarily comparable with measures sharing si
or descriptions provided by other entities. [IFRS 18.122] The note will also include for each M
18.123-124]

a description of the aspect of financial performance that it communicates, including wh

ment believes the MPM provides useful information about the entity’s financial perform
a description of how the MPM is calculated;
 a reconciliation between the MPM and the most directly comparable subtotal listed in IF
total or subtotal required by IFRS Accounting Standards, including the income tax effect
fect on non-controlling interests for each item disclosed in the reconciliation; and
a description of how the entity determined the income tax effect;
explanations on changes made regards the calculation of a MPM or alike.

Capital
An entity discloses information about its objectives, policies, and processes for managing cap
18.126] To comply with this, the qualitative and quantitative disclosures [IFRS 18.127-129] inc
the entity considers as capital, how external requirements are met, changes from the previou
compliance status, and impacts of non-compliance.

Other disclosures
An entity needs to either present in the statement of financial position or the statement of c
equity or to disclose in the notes details for each class of shares including the number of sha
rized and issued as well as a description of each reserve within equity [IFRS 18.130]. In additi
mation about not recognised dividends proposed or declared before the financial statement
thorized for issue needs to be disclosed in the notes. [IFRS 18.132]

Effective date and transition

Retrospective application of the standard is mandatory for annual reporting periods starting
January 2027 onwards but earlier application is permitted provided that this fact is disclosed
18.C1]

Reconciliations for each line item in the statement of profit or loss regards the comparative p
mediately preceding the year of initial application need to be disclosed showing how its resta
amount (prepared under IFRS 18) reconciles to the amount disclosed in the previous financia
ments in accordance with IAS 1. [IFRS 18.C2-3]

For the interim financial statements in the year of first-time application of IFRS 18, specific re
relating to the totals and subtotals prescribed for the statement of profit or loss as well as to
ciliations to the amounts previously recognised in accordance with IAS 1 are included. [IFRS 1

A further transitional provision relates to the measurement of investments in associates or jo

tures held by an entity that is a venture capital organisation or certain other entities. Such an
change to measuring its investment at fair value through profit or loss when applying IFRS 18
first time if the equity method was previously used to measure the shares. [IFRS 18.C7]

Related items

Other

 International Financial Reporting Standards

Projects

 Primary financial statements

Standards

 IAS 1 — Presentation of Financial Statements

 IFRS 18 — Presentation and Disclosure in Financial Statements

Contact us About Legal Privacy Cookies FAQs

© 2025. See Legal for more information. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited ("DTTL"), its global network of member
firms and their related entities. DTTL (also referred to as "Deloitte Global") and each of its member firms are legally separate and independent entities.
DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.