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Preparing for IFRS 18: What Consolidation Customers Need to Know Now
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A global update on IFRS 18, its implications for consolidation, and how your business can get ahead.
A new era in international financial reporting is on the horizon. IFRS 18, the International Accounting Standards Board’s (IASB) updated approach to Presentation and Disclosure in Financial Statements, is set to go into effect on January 1, 2027. While that may feel far off, organizations using consolidation tools—especially those already closing under IFRS—need to start preparing now to ensure a smooth transition.
Whether you’re a group controller, part of a corporate finance team, or managing multi-entity reporting, IFRS 18 will likely impact your reporting structure, consolidation workflows, and system configuration. To help you get a head start, we’re offering a dedicated webinar featuring Uli’s expert insights into how IFRS 18 affects consolidation specifically.
Why IFRS 18 Matters for Consolidation Customers
Investors and stakeholders have long voiced frustration over the lack of transparency and consistency in financial statements. Disparate formats, inconsistent income classifications, and vague performance metrics have made it difficult to compare companies or gain a clear picture of their operating results. These gaps have led to confusion, misinterpretation, and even mistrust in reported financial information.
IFRS 18 directly addresses these pain points by introducing a standardized structure for income statements and requiring companies to clearly define and present their operating results. By responding to years of user feedback, the new standard enhances transparency, enables better comparability across industries, and gives investors the clarity they need to make informed decisions. In short, IFRS 18 is a step forward in aligning financial reporting with the needs of its users.
Here’s what’s changing:
- Standardized Income Statement Categories: IFRS 18 introduces three distinct, mandatory categories—Operating, Investing, and Financing—to replace the current, more flexible format.
- Improved Disclosure of Management Performance Measures (MPMs): Companies must now clearly define, reconcile, and explain any non-GAAP performance measures they disclose to the market.
- Consistent Grouping of Income and Expenses: New guidelines aim to reduce subjectivity and inconsistency in grouping revenues and costs across business units and entities.
For consolidation users, these changes mean that data must be collected and structured differently at the source—then consolidated in a way that aligns with the new presentation rules. This can impact mapping logic, hierarchies, disclosures, and audit trails—all of which need to be IFRS 18-compliant.
What’s the Timeline?
Although IFRS 18 doesn’t become mandatory until financial years beginning on or after January 1, 2027, forward-thinking finance teams aren’t waiting. Early adoption is permitted, and many organizations are treating 2025 and 2026 as critical preparation years. By running parallel reports under the new requirements, teams can fine-tune their consolidation processes, identify reporting gaps, and ensure their systems are flexible enough to handle the shift—well before compliance becomes compulsory.
This is the moment to evaluate whether your current consolidation solution is equipped to support IFRS 18’s demands for increased structure and transparency. Do you have the right tools, templates, and reporting capabilities to meet the standard’s stricter presentation and disclosure rules? Waiting until 2027 could lead to rushed implementation, compliance risks, and costly inefficiencies. Starting now gives your team the time to test, adapt, and lead the transition with confidence.
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How a Consolidation Solution Can Help
The shift to IFRS 18 isn’t just a compliance milestone—it’s a strategic opportunity to elevate your entire financial reporting function. Beyond meeting new regulatory requirements, adopting IFRS 18 can drive stronger data governance, streamline reporting processes, and enhance the quality of insights available for decision-making. But realizing these benefits depends on having the right consolidation platform in place. A robust solution can automate data collection and validation, standardize reporting formats across entities, and provide built-in templates aligned with IFRS 18 requirements—all while giving finance teams the agility to respond to evolving disclosure expectations with confidence and precision.
- Flexible configuration of income statement categories across business units
- Audit-ready tracking of MPMs and other non-standard metrics
- Automated updates to account mapping and data models
- Consistent reporting logic across global subsidiaries
- Localized compliance features, making it easier to manage IFRS 18 and regional GAAPs in tandem
By leveraging a solution purpose-built for complex group structures, organizations can turn compliance into competitive advantage.
Final Thought
IFRS 18 is more than just a regulatory update—it marks a fundamental shift in how companies present performance, structure income statements, and communicate with stakeholders. While the changes may seem complex, they also present a unique opportunity to modernize your financial reporting processes, improve internal controls, and enhance the transparency and consistency of your disclosures. With the right tools, preparation, and guidance, your organization can turn this transition into a strategic advantage rather than a compliance burden.
Explore practical steps for a smooth implementation, see how leading finance teams are preparing, and learn how the right consolidation platform can support you every step of the way.
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