IFRS 18 in Practice: Rebuilding the Income Statement for 2027

This practitioner-level course explains IFRS 18, Presentation and Disclosure in Financial Statements, which replaces IAS 1 for annual periods beginning on or after 1 January 2027. It focuses on the redesigned income statement: five categories (operating, investing, financing, income taxes and discontinued operations) and two new required subtotals, operating profit and profit before financing and income taxes.

Using a worked manufacturing case, you will see how each line is classified, apply the three-gate test for management-defined performance measures (MPMs), and learn the consequential changes to the cash flow statement and earnings per share. The course also covers aggregation, nature or function presentation, interim reporting and transition, and ends with a 2026 readiness checklist for consolidation systems and chart of accounts mapping. A learner handout is included.

Topics covered

• Classifying income and expenses into the five categories
• The operating category as the residual, and the main business activity assessment
• Operating profit and the profit before financing and income taxes subtotals
• Management-defined performance measures: the three gates, the single note and the reconciliation
• Aggregation, disaggregation and the end of the unexplained “other” line
• Nature, function or mixed expense presentation and the paragraph 83 note
• Consequential changes to the cash flow statement (IAS 7), earnings per share (IAS 33) and interim reporting (IAS 34)
• Retrospective transition and the comparative reconciliation
• A 2026 readiness checklist for consolidation systems and account mapping

Presented by AccountingTutorAI, an official IFRS Foundation licensee, drawing on the text of IFRS 18 and the IFRIC agenda decisions issued since.