IFRS 18 – The New Look Profit and Loss Account

Why IFRS 18 Has Been Issued

• A summary of problems with the existing profit and loss presentation

• The additional information and questions often asked by analysts and other stakeholders

• The problems of aggregation and disaggregation, and the lack of consistency in reporting

• The increasing use of unregulated alternative performance measures (APMs), such as EBITDA

• Timetable for adoption and what happens on first-year transition

Overview of What the New Profit and Loss Account Will Look Like

• IFRS 18 training explores the five new required subtotals of profit, as defined

• How to identify operating profits and losses, including more contentious issues relating to: Financing costs

• Revenues

• Foreign exchange

Impact on interim accounts in year one and in subsequent years

Impact on other group companies reporting under UK GAAP

Devil in the Detail – Other Supporting Notes and Disclosures Required

• Additional expense analysis now required in the notes – breaking down the cost of sales, for example, into its key parts

• What is a management-defined performance measure (MPM)? What information needs to be included in the financial statements?

• Interaction with other management reports, such as the Strategic Report

• Wider impact on cash flow reporting, tax expense and the activities of a diversified business group

Practical Issues and Other Considerations

• Changes needed to the chart of accounts and other reporting systems

• Wider impact of any changes to financial KPIs: e.g. employee benefit and reward schemes

• Audit considerations regarding the subjective nature of disclosures: What would high-quality disclosures likely entail?

IFRS 18 training concludes with internal control and governance issues

Training Objectives

This technical IFRS 18 training brings all attendees up to speed with the new requirements of the International Financial Reporting Standards. It represents the most significant change in the presentation of IFRS financial statements for more than 15 years. By the end of this half-day course, participants will be able to:

• Understand why the introduction of IFRS 18 has happened

• Its impact on financial statement presentation

• Identify and apply the five new required profit subtotals

• Correctly classify operating, investing and financing income and expenses

• Understand the new disclosure requirements, including Management-defined Performance Measures (MPMs)

• Assess the practical implications for systems, KPIs, governance and audit

• Confidently prepare and analyse an IFRS 18-compliant profit and loss account

Training Course Summary

This IFRS 18 course provides a concise, practical overview of IFRS 18. Participants gain the clarity to apply the new requirements immediately in real financial statements.

It provides a clear explanation of the new statement of profit and loss structure and key subtotals. Attendees will be able to present performance and answer analyst and stakeholder questions with authority. This course also provides practical guidance on judgmental areas such as operating profit, financing and foreign exchange. You should be able to reduce risk, improve consistency and withstand audit and regulatory challenges.

We also explore in-depth coverage of new disclosures and Management-defined Performance Measures (MPMs). Attendees can replace unregulated metrics with compliant, transparent reporting along with insight into first-year transition, interim reporting and wider group impacts. This ensures participants can plan, avoid surprises and manage change across the business.

IFRS 18 training focuses on systems, controls and governance implications, equipping attendees to drive IFRS 18 implementation, influence internal stakeholders and improve the quality of financial reporting.