The European Union has officially adopted IFRS 18, which will replace IAS 1 from 1 January 2027 and fundamentally revise the structure of the income statement. Given the requirement for retrospective restatement of 2026 figures, immediate preparation for implementation is essential.
IFRS 18 does not change the underlying measurement of performance but significantly transforms its presentation. Revenues and expenses must now be classified into operating, investing, and financing categories, with defined subtotals such as operating profit and profit before financing and income tax. The aim is to provide analysts with clearer and more comparable data for better decision-making.
The standard also introduces mandatory disclosure and audit of Management Performance Measures (MPMs), which companies previously reported only outside the financial statements. These metrics must be clearly explained, reconciled to IFRS-defined subtotals, and supported by calculations, significantly tightening reporting requirements.
For Czech companies reporting under IFRS—typically listed entities—this means a necessary overhaul of internal processes. They will need to redesign their financial statement structure and expand disclosures to meet new transparency requirements.
