This article presents a comprehensive overview of the new requirements under IFRS 18, accompanied by practical insights into the potential challenges that entities are likely to encounter in the application of the Standard.

IFRS 18 will replace IAS 1 effective for reporting periods commencing on or after 1 January 2027. The Standard introduces new requirements for the presentation of the statement of profit or loss, disclosures for management-defined performance measures (MPMs) and more comprehensive guidance on aggregation and disaggregation of information in the financial statements. These amendments are designed to mitigate potential framing and formulation errors, as discussed in the field of behavioral finance.

While the changes may initially appear straightforward, the complexity of the requirements gives rise to potential challenges that must be comprehensively understood in order to ensure accurate and effective implementation of the Standard.

JEL: F65, G41, M41