IFRS 18 transition: dates, restated comparatives and the reconciliation

IFRS 18 has no transition shortcuts for the income statement: the comparative year has to be presented on the new basis and reconciled to the old one. For a December year end, that makes 2026 the year to prepare, because 2026 is the year that will be restated.

By Awais Jameel, Chartered Accountant. Reviewed by Mirza Fahad Baig, Chartered Accountant. Checked against official sources on . 2 minute read.

Short answer

IFRS 18 applies to annual periods beginning on or after 1 January 2027 and is applied retrospectively, so comparatives are restated. In the first year, a company must also disclose a reconciliation, for each line of the comparative income statement, between the amount presented under IAS 1 and the amount restated under IFRS 18. The same applies to interim reports in the first year.

At a glance

Effective
Periods beginning 1 January 2027
Early application
Allowed
Method
Retrospective
Comparatives
Restated
Extra disclosure
Line-by-line reconciliation of the comparative year
Interim reports
New layout from the first one
IFRS 18 transition: dates, restated comparatives and the reconciliationEffective: Periods beginning 1 January 2027; Early application: Allowed; Method: Retrospective; Comparatives: Restated; Extra disclosure: Line-by-line reconciliation of the comparative year; Interim reports: New layout from the first one.KEY FACTS AT A GLANCEIFRS 18 transition: dates, restated comparativesand the reconciliationEffectivePeriods beginning 1January 2027Early applicationAllowedMethodRetrospectiveComparativesRestatedExtra disclosureLine-by-linereconciliation of thecomparative yearInterim reportsNew layout from the firstoneChecked against official sourcesTax BakersIFRS 18 transition: dates, restated comparatives and the reconciliationEffective: Periods beginning 1 January 2027; Early application: Allowed; Method: Retrospective; Comparatives: Restated; Extra disclosure: Line-by-line reconciliation of the comparative year; Interim reports: New layout from the first one.KEY FACTS AT A GLANCEIFRS 18 transition: dates,restated comparatives and thereconciliationEffectivePeriods beginning 1 January 2027Early applicationAllowedMethodRetrospectiveComparativesRestatedExtra disclosureLine-by-line reconciliation of thecomparative yearInterim reportsNew layout from the first oneChecked against official sourcesTax Bakers
Key facts at a glance, as set out in this guide.

What are the key dates?

For a 31 December year endDate
Comparative year that will be restatedYear to 31 December 2026
Date of initial application1 January 2027
First interim report under IFRS 18First quarter or half year of 2027
First annual financial statements under IFRS 18Year to 31 December 2027, published in 2028

A June year end applies the standard from 1 July 2027. Some jurisdictions adopt IFRS through their own process, so confirm the date that applies to you.

What has to be restated?

The comparative income statement, cash flow statement and affected notes are presented as if IFRS 18 had always applied. Nothing is remeasured, so there is no adjustment to opening equity from the presentation changes. The work is in reclassifying each line and rebuilding the subtotals.

What is the transition reconciliation?

For the comparative period immediately before the year of first application, the company discloses, for each line item in the statement of profit or loss, a reconciliation between the amount restated under IFRS 18 and the amount previously presented under IAS 1.

Northline Telecom, comparative year, CU millionAs presented under IAS 1ReclassificationRestated under IFRS 18
Other income25(25)0
Gain on disposal of towers01010
Exchange gain on trade payables044
Rental and dividend income (investing)01111
Other expenses(15)150
Impairment of network equipment0(12)(12)
Exchange loss on loan (financing)0(3)(3)
Finance income12(12)0
Interest income on deposits (investing)01212
Net effect on profit for the year0

The reclassifications always net to nil, which is a useful check. The Comparatives restatement workbook (Excel) builds this table and proves the check.

What about interim reports?

Condensed interim financial statements in the first year present the headings and required subtotals the company expects to use in its first annual statements under IFRS 18, and include the same kind of reconciliation for the comparative interim period. Management-defined performance measures are also disclosed in interim reports.

What should you do in 2026?

  1. Classify every income and expense account by category, and settle the judgement areas with your auditors.
  2. Run the 2026 income statement in both formats in parallel, at least quarterly.
  3. Identify management-defined performance measures and collect the tax and non-controlling interest data.
  4. Draft the reconciliation and the new notes on 2026 numbers before the year closes.

The full list is in the implementation checklist.

Getting ready for IFRS 18?

We help finance teams map their income statement to the new categories, restate comparatives and prepare the new disclosures.

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Questions people ask

When is IFRS 18 effective?

For annual periods beginning on or after 1 January 2027, with earlier application permitted.

Do comparatives have to be restated under IFRS 18?

Yes. The standard is applied retrospectively.

Does the transition change opening equity?

No. IFRS 18 changes presentation, so nothing is remeasured.

Is early application of IFRS 18 allowed?

Yes, provided the company discloses that it has applied the standard early.

Sources

Every fee, date and rule on this page was taken from these official and primary sources.

  1. IFRS Foundation: IFRS 18 Presentation and Disclosure in Financial Statements
  2. Australian Accounting Standards Board: AASB 18, the Australian equivalent of IFRS 18 (full text)
  3. IFRS Foundation: IFRS 18, the new requirements (presentation)

Rules and fees change. If you are reading this long after October 4, 2026, confirm the figures with the source before you rely on them.

IFRS 18IFRS 18 explained: what changes and whenIFRS 18IFRS 18 implementation checklist: what to do and in what orderIFRS 18IFRS 18 worked example: a telecom income statement before and after

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This guide is general information. It is not tax or legal advice for your situation.