IFRS 18 lands in 2027. The comparative year is 2026.
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.
EY has put this bluntly in its published guidance: the data and systems must effectively be in place during 2026. That is not a warning about the deadline. It is a warning about the year we are in.
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.
EY describes it as a major overhaul that will require most, if not all, IFRS reporters to update the structure of their income statement, and as something that demands judgement and technical knowledge rather than a mechanical re-mapping. Both halves of that matter. The judgement is real, and it cannot be outsourced to a mapping table built the week before year-end.
Classification into the five categories. 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 where the cross-cutting judgements bite: 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.
The by-nature disclosure, if you present by function. 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.
Management-defined performance measures. 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.
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.
Confirm whether the entity has a specified main business activity, at both consolidated and separate levels, because that determination cascades into everything else. Draft the classification policy for the five categories and pressure-test it against the awkward items (FX, hedges, leases, disposals, restructuring) rather than the easy ones. Establish whether the by-nature information exists at the required granularity, and if it does not, change the capture now while there are still months left in the comparative year. Build the MPM inventory from what has actually been published, not from what finance believes is published. And put governance around it that includes IT, investor relations, and legal alongside finance. EY names cross-functional governance as a success factor for a reason.
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.
The bottom line does not move. Almost everything around it does.
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 builderViews are my own. This is a general commentary on IFRS 18 and not accounting advice. Confirm the requirements against the issued standards and your current local regulatory instructions before applying them.