IFRS 18 is coming – and your PM solution will feel it
From reporting periods starting 1 January 2027, IFRS 18 Presentation and Disclosure in Financial Statements will replace IAS 1. While the standard does not change recognition or measurement, it does fundamentally change how performance is presented, structured and explained.
For organizations using Performance Management (PM) and consolidation platforms – whether for group reporting, performance management or disclosures – IFRS 18 will not be “just an accounting change”. It will have a direct impact on models, mappings, reports and governance within your PM landscape.
Why IFRS 18 goes beyond accounting policy
IFRS 18 introduces a new, more structured way of presenting the income statement, including:
- Mandatory categories for income and expenses (operating, investing, financing, income tax and discontinued operations)
- New required subtotals, such as operating profit and profit before financing and income taxes
- Formal requirements for Management-defined Performance Measures (MPMs) – including reconciliations to IFRS subtotals and enhanced disclosures
- Stricter rules around aggregation, disaggregation and the use of “other” lines
These changes are designed to improve comparability and transparency for investors. But to achieve that, companies must ensure their systems can consistently classify, calculate, reconcile and disclose performance.
That’s where PM solutions come into play.
What will change in your PM environment
Even if your underlying ERP data remains the same, IFRS 18 typically requires updates in several areas of your PM solution:
1. Profit & loss structures and mappings
Most organizations will need to redesign P&L hierarchies to reflect the new IFRS 18 categories and subtotals.
This often involves:
- Re-mapping accounts to operating, investing and financing categories
- Splitting mixed or aggregated lines that no longer comply with IFRS 18 presentation
- Introducing new calculated subtotals in statutory reporting views
This affects consolidation models, reporting hierarchies and validation logic.
2. Data model and metadata
To support IFRS 18, many companies introduce:
- New account attributes or dimensions to capture IFRS 18 categories
- Additional flags or structures to distinguish IFRS results from MPMs
- Parallel reporting views during transition (IAS 1 vs IFRS 18)
Without thoughtful design, these changes can quickly increase model complexity.
3. Management-defined Performance Measures (MPMs)
IFRS 18 formalizes what many PM tools already manage informally: non-IFRS performance metrics. Going forward, companies must:
- Clearly identify which measures qualify as MPMs
- Maintain consistent definitions and calculations
- Produce reconciliations to IFRS subtotals, including tax and non-controlling interests
- Disclose explanatory narrative in a single note
This places new demands on governance, workflow and audit trail within your PM solution.
4. Reports, templates and disclosures
Financial statement layouts, management dashboards and disclosure reports all need to reflect the new structure. This often includes:
- Updating statutory reporting templates
- Aligning internal performance views with external IFRS subtotals
- Designing new disclosure notes for MPMs and enhanced disaggregation
5. Close process and controls
Finally, IFRS 18 introduces additional judgment around classification and aggregation. Many organizations will need to:
- Add new review and approval steps to the close
- Strengthen controls around KPI definitions and changes
- Ensure consistent application across subsidiaries and periods
Why start thinking about IFRS 18 now
Although IFRS 18 applies from 2027, it requires retrospective application. That means comparative figures, historical data and reporting structures must already be aligned well before go-live.
Organizations that wait risk:
- Rushed model redesigns close to go-live
- Inconsistent reporting between management and statutory views
- Manual workarounds that undermine automation and transparency
Those who start early can turn IFRS 18 into an opportunity to simplify reporting, improve KPI governance and strengthen their PM foundation.
How element61 can help
As an implementation partner for corporate performance management solutions of CCH Tagetik, Prophix, SAP (Group Reporting & SAC), Anaplan and Vena, we help organizations translate accounting standards into robust, scalable system designs.
We support clients with:
- IFRS 18 impact assessments focused on PM and consolidation
- Redesign of P&L hierarchies, mappings and data models
- MPM definition, reconciliation and disclosure design
- Dual-reporting and transition scenarios
- Implementation and testing directly within your PM platform
Whether you are beginning your IFRS 18 assessment or already planning system changes, we can help you comply with confidence – without over-engineering your solution.
👉 If IFRS 18 is on your horizon, now is the right time to start the conversation. Reach out to us to discuss what it means for your PM environment and your roadmap.
