Does IFRS 18 require retrospective application?

IFRS 18: What the 2027 Effective Date Means for Businesses

Starting in 2027, companies applying International Financial Reporting Standards will need to comply with IFRS 18, which brings significant changes to how financial performance is presented and disclosed. One key detail organizations can’t afford to overlook? The standard must be applied retrospectively.

This means that when the new rules take effect for annual reporting periods beginning on or after 1 January 2027, companies won’t just report under the new framework for 2027—they’ll also need to restate comparative figures for prior periods, likely going back to 2026 at minimum. This retrospective application ensures consistency across reporting years, but it also demands early preparation.

As a result, 2026 is shaping up to be a pivotal year for finance teams. Organizations will need to assess how IFRS 18 impacts their income statement structure, performance measures, and disclosures well in advance. Systems, processes, and internal controls must be updated to capture and report data in line with the new requirements—not just for the first adoption year, but for the comparative periods too.

Among the key changes introduced by IFRS 18 are enhanced transparency around performance metrics and more standardized presentation of income statements. Companies often disclose non-IFRS measures like EBITDA or adjusted net income, and now they’ll need to ensure these are reconciled clearly to line items in the financial statements.

Waiting until 2027 to act isn’t an option. With restatements and system adjustments required, the timeline is already tightening. The best approach? Start impact assessments now, involve both finance and IT early, and use the 2026 reporting cycle to test and refine disclosures. Those who delay risk last-minute scrambles—and potential misstatements.