IFRS 18 Presentation and Disclosure in Financial Statements applies to annual periods beginning on or after 1 January 2027, with comparatives restated. For December year-ends the first IFRS 18 statements are for 2027, which means the 2026 figures being closed now will be reclassified next year.
The standard requires the income statement to be split into operating, investing and financing categories, with two new subtotals: operating profit and profit before financing and income taxes. Entities with specified main business activities, such as banks and insurers, classify some items differently.
Management performance measures, the adjusted profit figures companies publish outside the financial statements, must now be disclosed in a single note, reconciled to the nearest IFRS subtotal and audited. The standard also sets principles for grouping items and for deciding what goes on the face of the statements and what goes in the notes.
IFRS 18 does not change recognition or measurement, so profit after tax is unaffected. It changes where numbers sit and what has to be explained, which affects covenants, bonus schemes and analyst models that reference operating profit.
What this means for you
- Map every line of your current income statement to an IFRS 18 category before the 2026 audit closes.
- Check loan covenants and incentive schemes that reference EBIT or operating profit; the definition will change.
- Listed companies should plan a dry run on 2026 numbers in the first half of 2027.
If any of these points apply to your organisation, talk to us. We will tell you what needs to change and what it will take.
IFRS Foundation: IFRS 18 Presentation and Disclosure in Financial Statements
Botswana Accountancy Oversight Authority
Published 3 November 2026. This article is general information, not advice for a specific situation.