IFRS 18 Presentation and Disclosure in Financial Statements, Endorsement consultation

IFRS 18 Presentation and Disclosure in Financial Statements

After the redeliberations and extensive consultation, the IASB published the IFRS 18 Presentation and Disclosure in Financial Statements on 9 April 2024.

IFRS 18 impacts all entities. It sets out general and specific requirements for the presentation of information in the statement(s) of financial performance, the statement of financial position and the statement of changes in equity. This Standard also sets out requirements for the disclosure of information in the notes. IAS 7 Statement of Cash Flows sets out requirements for the presentation and disclosure of cash flow information. However, the general requirements for financial statements in paragraphs 9–43 and 113–114 apply to the statement of cash flows. IFRS 18 introduces three sets of new requirements to improve the reporting of financial performance:

improved comparability in the statement of profit or loss through defining categories and subtotals to specify the structure of the income statement;
enhance transparency of management-defined performance measures
guidance for aggregation and disaggregation of information to enhance the grouping of information.

EFRAG considered this project one of its key projects as of high interest for European constitutents. EFRAG commented on the Exposure Draft and participated in the field testing of the proposals. During the redeliberation phase the key aspects of the proposals, the IASB decided to conduct outreach activities on a targeted selection of its tentative decisions through roundtable discussions in coordination with National Standard Setters.

The objective of the targeted outreach was to receive feedback from a range of stakeholders that will help the IASB assess whether the selected tentative decisions will function as intended and achieve the intended balance of costs and benefits. EFRAG has prepared a summary report that reflects all the feedback received from the roundtables. The report provided a number of recommendations to the IASB, which take into account the feedback received from its constituents and EFRAG's previous recommendations in its comment letter on the IASB Exposure Draft General Presentation and Disclosures. During the fianalisation of the standard EFRAG followed the project closely on a timely basis and offered the IASB access to its working groups to receive feedback on its tentative decisions.

The European Commission issued its request for endorsement advice to EFRAG on 29 April 2024. EFRAG is on the way to assess the endorsement criteria and to publish a draft endorsement advice by the end of 2024.

Jointly with the IASB and some of its member organisations, EFRAG held educational sessions on IFRS 18 Presentation and Disclosure in Financial Statements. The first session for corporates was held on 7 June; consult the summary report here. The session for financial institutions (including insurance companies and conglomerates) was held on 11 June; consult the summary report here.

The summary reports summarise the feedback received during the events, including panellists' views and experience with the new requirements, related to the following topics:

Categories and subtotals
Management-defined Performance Measures (MPMs)
Grouping – aggregation and disaggregation – of information
Limited changes to the cash flow statement, effective date and transition requirements

Videos of both sessions can be consulted at the following links:

Publication of the Draft Endorsement Advice

On 15 November 2024, 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 using the online form. 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. More information can be found here.