If you report on a calendar year, the numbers that will sit in the comparative column are being generated right now.
It is August 2026. For an entity with a 31 December year-end applying IFRS 18 for the first time in 2027, the comparative period is the year currently in progress, with roughly four months of it left.
That is the whole argument for treating this as a live 2026 project rather than a 2027 one. Transition is retrospective. The 2026 statement of profit or loss will have to be re-presented in the new structure, with a line-by-line reconciliation back to what was reported under IAS 1. Every month that closes without IFRS 18-capable data is a month that has to be reconstructed later, from records that were never designed to answer the question.
The IFRS Foundation’s transition materials make the sequence clear: retrospective application means comparative information must be ready for the first IFRS 18 reports. For a calendar year reporter, that makes 2026 a data and systems question, not merely a 2027 disclosure deadline. See the IFRS Foundation’s IFRS 18 overview.
IFRS 18 was issued in April 2024 and replaces IAS 1. It is mandatory for annual periods beginning on or after 1 January 2027, with early application permitted.
It changes nothing about recognition or measurement. Net profit for the period is unchanged. Assets, liabilities, and the bottom line are exactly what they would have been.
This is precisely why the standard gets underestimated. A change that does not move the bottom line reads as cosmetic, and cosmetic changes get scheduled late. But presentation and disclosure changes reach into the chart of accounts, the consolidation system, the investor communications, and the interim reporting calendar. Those are slower to move than a measurement adjustment ever is.
The issued standard introduces defined subtotals and categories in the statement of profit or loss, together with disclosures for management defined performance measures. That combination changes both structure and judgement; it cannot be reduced to a mapping table built the week before year end. The IFRS Foundation project summary provides the primary overview.
The trap in the calendar is not the annual report. It is the interim one.
Income and expenses now sit in operating, investing, financing, income taxes, or discontinued operations, with two mandatory subtotals: operating profit or loss, and profit or loss before financing and income taxes.
Operating is a residual. It is what remains after everything else has been classified, not a positive list of qualifying items. That inverts how most preparers instinctively approach it, and it is the single most useful thing to internalise before writing the policy.
The cross-cutting judgements are where this bites. Foreign exchange differences follow the item they arise from, derivative results follow the item being hedged, and a lease splits, with depreciation of the right-of-use asset in operating and interest on the lease liability in financing. Pressure-test the policy against those rather than against the easy items.
Entities presenting operating expenses by function must disclose specified expenses by nature in the notes. In practice this is a genuine data exercise, not a disclosure drafting exercise. If the general ledger was built to report by function, the by-nature detail may simply not exist at the granularity required, and no amount of note-writing will conjure it. This is the workstream most likely to expose the chart of accounts, and the one with the least tolerance for being left until 2027.
MPMs are narrower than “non-GAAP” as most people use the term: they are subtotals of income and expenses used in public communications outside the financial statements that convey management’s view of performance and are not IFRS-specified. Free cash flow and net debt fall outside.
The difficulty is not the definition; it is the inventory. Identifying MPMs sends the team back through earnings releases, investor presentations, management commentary, and analyst materials, often across several functions that have never had to reconcile what they say publicly with what the financial statements support.
Each identified MPM then needs a description and purpose, a reconciliation to the nearest IFRS line or subtotal, the income tax effect and non-controlling interests effect for each reconciling item, an explanation of any change in calculation, and a statement on non-comparability.
The tax and NCI effect per reconciling item is the requirement I would flag first. It is not usually available from the existing reporting pack.
Jordan has no endorsement waiting room. Jordan applies IFRS as issued by the IASB, with legal force through the Companies Law and the sectoral regulators, and no separate national endorsement step. The practical consequence is that the effective date tracks the IASB directly: 1 January 2027, without an intervening local process that might create room. Saudi Arabia sits differently, on “IFRS as endorsed in Saudi Arabia,” through a separate SOCPA endorsement process. For groups with components in both jurisdictions, that difference in mechanism is worth understanding early rather than discovering it during a group reporting cycle. We have written separately on what changed in Saudi compliance in 2026.
Banks and insurers are the structurally affected population. IFRS 18 identifies two specified main business activities, investing in assets and providing financing to customers, and where an entity has one, items that would otherwise be investing or financing move into operating. For a bank, that reshapes the face of the income statement in a way it does not for a manufacturer. The assessment is made at the reporting-entity level, can differ between consolidated and separate financial statements, and an entity can have more than one specified main business activity. Given the weight of CBJ-regulated banks and insurers in Jordan’s full-IFRS population, this is where the concentration of effort sits.
Two reporting changes land on the same cycle. The Amman Stock Exchange’s climate-related disclosure framework moves from voluntary to mandatory for reports published from 1 January 2027 covering 2026 onwards. IFRS 18 first applies for periods beginning 1 January 2027. Different frameworks, different teams, one reporting calendar, and largely the same finance function absorbing both.
The amendments to other standards are where first-time application quietly becomes harder.
Under amended IAS 7, the indirect method has a single starting point, operating profit or loss, and the previous free choice over classifying interest and dividends is largely removed. For entities without a specified main business activity, the classification is prescribed: interest and dividends received in investing, interest and dividends paid in financing. Entities with a specified main business activity classify consistently with the income statement treatment.
IAS 34 extends the MPM disclosures into interim reporting and requires reconciliation for comparative interim periods. For a December year-end, that means the first interim report of 2027 arrives well before the first annual report, and it arrives carrying restated comparatives. Anyone planning around a December 2027 deadline has the wrong date in the calendar.
IAS 8 is renamed Basis of Preparation of Financial Statements and absorbs paragraphs relocated from IAS 1. IAS 33 interacts with the new subtotals where additional per-share measures are presented.
If your group holds venture-capital-type investments, the one-off IAS 28 re-election available on first application is worth a conversation now. The eligibility criteria have been the subject of an active IASB clarification project, so confirm the current position before relying on it.
Seven workstreams, sequenced so that the determinations everything else depends on are settled first. The dates assume a 31 December year-end and are the latest points at which each item still leaves room to act inside the comparative year.
| Workstream | FY2026 deliverable | Evidence source | Target |
|---|---|---|---|
| 01 Specified main business activity | Written determination at consolidated and separate level, with the reasoning retained | Board or management paper; group structure; regulatory licences | Sep 2026 |
| 02 Classification policy | Approved policy covering all five categories | Draft accounting policy; chart of accounts mapping | Oct 2026 |
| 03 Cross-cutting judgements | Documented treatment for FX, derivatives and hedges, leases, disposals and restructuring | Technical memo per judgement; supporting contracts | Oct 2026 |
| 04 By-nature feasibility | Confirmation the by-nature detail exists at the granularity required, or a capture change made while 2026 is still open | General ledger extract; chart of accounts; ERP configuration | Oct 2026 |
| 05 MPM inventory | Inventory built from what has actually been published, with tax and NCI effect per reconciling item | Earnings releases; investor decks; management commentary | Nov 2026 |
| 06 Systems and data | Chart of accounts and consolidation system able to produce the new structure for the full comparative year | ERP and consolidation change log; test extract | Nov 2026 |
| 07 IAS 7 and IAS 34 knock-on | Cash flow starting point and interest and dividend classification set; interim MPM reporting scoped | Draft cash flow statement; interim reporting calendar | Dec 2026 |
The same seven workstreams as a workbook, with owner, status and notes columns left blank for your team. Yours to keep and to run without us.
Download the tracker (XLSX)Two things sit outside the table because they are governance rather than deliverables. Put the programme under someone who can convene IT, investor relations, and legal alongside finance, because the MPM inventory and the by-nature question both run straight through functions finance does not control. And book the classification policy for a second read by someone who did not draft it.
All of this runs on the same FY2026 file the auditor will ask for, so it is worth sequencing against the close rather than beside it. Our audit readiness checklist covers that side of the year.
01No. Recognition and measurement are untouched. Net profit for the period, assets and liabilities are exactly what they would have been under IAS 1. What changes is the structure the result is presented in, and what has to be disclosed alongside it.
02IFRS 18 first applies to the year beginning 1 January 2027. The first report that carries it is not the FY2027 annual report, though. It is the first interim report of 2027, which lands months earlier and already needs restated comparatives. Anyone planning around a late 2027 deadline has the wrong date.
03The 2026 statement of profit or loss has to be re-presented in the new structure, with a reconciliation back to what was reported under IAS 1. That is why the year in progress matters: every month that closes without IFRS 18-capable data is a month that has to be reconstructed later from records never designed to answer the question.
04You will need to disclose specified expenses by nature in the notes. In practice that is a data exercise rather than a drafting one. If the general ledger was built to report by function, the by-nature detail may not exist at the granularity required, and no amount of note-writing will conjure it. It is the workstream most likely to expose the chart of accounts, which is why it belongs in 2026 and not in 2027.
And the year that has to be rebuilt is the year still on the calendar. If your FY2026 file has not had an IFRS 18 check yet, that is a fixed scope, fixed fee conversation, not a stage of the audit.
Open the scope builderThis is Daftar’s general commentary on IFRS 18 and not accounting advice. The transition plan and the downloadable tracker are planning aids, not a compliance assessment. Confirm the requirements against the issued standards and your current local regulatory instructions before applying them.