IFRS 18, Presentation and Disclosure in Financial Statements, replaces IAS 1 for periods starting on or after 1 January 2027. It is the biggest change to the income statement in decades. Because comparatives must be restated, a calendar-year company's 2026 numbers will need to be re-presented too.
What changes
- New categories. Income and expenses are sorted into operating, investing and financing, plus categories for income taxes and discontinued operations.
- Required subtotals. Every company presents "operating profit" and "profit before financing and income taxes", defined the same way.
- Your own metrics in the notes. If you use "adjusted EBITDA" or similar measures in public communications, IFRS 18 calls them management-defined performance measures. They must be disclosed and reconciled in the audited notes.
- Better grouping. New rules on aggregating and splitting line items cut down on large "other" balances.
Why it matters in the UAE
- With audited statements now required for more businesses under corporate tax, more UAE companies will apply IFRS 18 in their first few audits.
- Bank covenants and investor reports often use EBITDA or operating profit. Check whether the new definitions change your numbers.
- Valuation work that relies on reported EBITDA will need to adjust for the new presentation.
Start now
- Map your chart of accounts to the new categories.
- List every adjusted measure you publish and decide which to keep.
- Re-present 2026 in the new format early, so 2027 is not a surprise.
How iConsult can help
We prepare audit-ready IFRS statements and help finance teams through new standards. See audit readiness and fractional CFO services, or book a free consultation.
This article is general information, not legal or tax advice. It reflects the rules as we understand them on the date shown; laws and guidance change, so check the current position or talk to us before you act.