EFRAG seeks stakeholders’ comments on its Draft Endorsement Advice on IFRS 18 Presentation and Disclosure in Financial Statements

EFRAG has published its Draft Endorsement Advice (DEA) on IFRS 18 Presentation and Disclosure in Financial Statements and invites stakeholders to submit comments by 26 March 2025.EFRAG’s preliminary conclusion is that IFRS 18 satisfies the criteria for endorsement for use in the EU, and therefore recommends IFRS 18 for its endorsement.

Objective of IFRS 18

IFRS 18 aims to enhance the usefulness of information presented and disclosed in the financial statements, addressing stakeholder feedback, especially from users requesting better information about companies’ financial performance. IFRS 18 impacts the presentation of financial information of each entity. It aims to improve the way companies communicate information in their financial statements, providing investors a better basis for analysing and comparing companies’ performance.

IFRS 18 New Requirements in relation to the:

  • Presentation of New Subtotals: The standard introduces defined subtotals in the statement of profit or loss, along with a consistent classification of income and expenses into five categories.

  • Disclosure of Management-Defined Performance Measures (MPMs): IFRS 18 requires disclosures related to MPMs to provide better clarity on company performance.

  • Enhanced Grouping and Aggregation Requirements: It improves the grouping, aggregation, and disaggregation of information in both the primary financial statements and the notes.

EFRAG’s Preliminary Assessment

EFRAG suggest that IFRS 18 satisfy the technical endorsement criteria. EFRAG notes that IFRS 18 was issued by the IASB after reaching consensus and conducting extensive consultations, including input from European stakeholders. While some concerns and mixed views on specific topics were raised by stakeholders, EFRAG believes that these do not prevent IFRS 18 from meeting the qualitative technical criteria.

Moreover, EFRAG’s preliminary conclusion is that IFRS 18 would improve financial reporting and achieves a reasonable cost-benefit balance. EFRAG has not identified any adverse effect on the European economy, including financial stability and economic growth. Accordingly, EFRAG recommends IFRS 18 for its endorsement.

Invitation for Feedback

EFRAG invites its constituents to provide feedback on all aspects of its analysis supporting the preliminary conclusions by 26 March 2025.

To share comments on the draft endorsement advice letter:

1. Download and complete the invitation to comment form

2. Submit your completed form here

For more information, access the updated Endorsement Status Report.

Related project