Implementation support for IFRS 18 and IFRS 19

In April 2024, the International Accounting Standards Board issued IFRS 18 Presentation and Disclosure in Financial Statements, which will replace IAS 1 Presentation of Financial Statements, and shortly thereafter, in May 2024, IFRS 19 Subsidiaries without Public Accountability: Disclosures, which aims to simplify disclosures for certain subsidiaries.

While the application of IFRS 18 is mandatory, the application of IFRS 19 is optional for eligible subsidiaries. Some subsidiaries, which previously considered transitioning to IFRS® Accounting Standards but did not proceed due to the extensive disclosure requirements, might want to reconsider transitioning to IFRS in light of IFRS 19.

Both new standards are mandatory for annual periods beginning on or after 1 January 2027. Early application is permitted in both cases.

Our team, which has already gained extensive and relevant experience in the implementation of IFRS Accounting Standards for individual financial statements in Hungary, is ready to assist in the below fields, in cooperation with our experts working in process development, automation and controlling as needed:

• for companies already preparing their financial statements under IFRS Accounting Standards, we offer the screening of notes using modern, automated tools and the assessment of potential simplifications if IFRS 19 is chosen,
• related to the screening of notes, reviewing the quality of disclosures already existing and also required if IFRS 19 is chosen, and making recommendations for clarification and quality improvement,
• assessing the impact of IFRS 18 (gap analysis), considering the characteristics of the entity's activities, the applied accounting systems and processes, including the assessment of any system development requirements and the preparation of the related system specifications at the business needs and logical system design level,
• identifying the relevant decision points for the enterprise in the implementation of IFRS 18 and assisting in the preparation of the related decisions,
• support in designing and mapping changes in the structure of the statement of financial position, statement of comprehensive income and statement of cash flows necessitated by the application of IFRS 18,
• supporting the restructuring of planning and controlling systems in light of IFRS 18,
• assistance in implementing IFRS 18’s rule for the breakdown of foreign exchange differences,
• review, optimization, and automation of the entire financial statement preparation process related to the above,
• conducting managerial and expert-level training on the rules of IFRS 18 and IFRS 19.

If your company concludes that transitioning to IFRS Accounting Standards for its individual financial statements is beneficial based on an analysis of IFRS 19, we invite you to explore our specialized services designed to support this transition. Learn more about how we can assist you here.