IFRS 18 replaces IAS 1 for annual periods beginning on or after 1 January 2027. Singapore's SFRS(I) 18 follows the same date, and India's Ind AS 118 is expected from 1 April 2027, once the MCA notifies it. That sounds comfortably far away. It is not.
All three require restated comparatives. For a December year end, the comparative year is 2026, and it is nearly over. For an Indian March year end, the comparative year began on 1 April 2026. Every month booked since then is data you will need to present under the new structure.
US GAAP is on a different path. ASU 2024-03 does not restructure the income statement, but it requires disaggregation of specified expense captions in the notes for annual periods beginning after 15 December 2026, so the tagging work starts now there too.
What changes
- Income and expenses in the statement of profit and loss fall into five categories: operating, investing, financing, income taxes and discontinued operations.
- Two new subtotals are required: operating profit, and profit before financing and income taxes.
- Management-defined performance measures used outside the financial statements must be disclosed and reconciled.
- Operating profit becomes the starting point for the indirect cash flow method.
Why the classification is not mechanical
The categories depend partly on your main business activities. An entity whose main business is investing in assets, or providing finance to customers, classifies some income and expenses in operating that another entity would classify in investing or financing. That is a judgement, and it needs to be made, documented and applied consistently before the comparative year closes.
What to do now
- Tag the chart of accounts to the five categories, so the comparative year accumulates correctly as it is booked.
- Decide and document your main business activity, entity by entity, with the reasoning.
- List every performance measure you publish outside the statements, in investor presentations, results releases and the annual report.
Doing this now means the restatement becomes a report, not a project. Leaving it means reclassifying twelve months of transactions under deadline in 2027.
Groups with subsidiaries under different frameworks have one more step: decide where the classification lives. Tagging once at account level and mapping through a multi-GAAP layer avoids doing the work twice.