IFRS 18 implementation: insights from preparers
Lessons learned on data, systems, and stakeholder engagement strategies.
From the IFRS Institute – March 3, 2026
Authors: Ingo Zielhoff, Paul Nap, Yuuki Stahl, Kayla C Molaro
IFRS 18 will result in a major transformation of the income statement’s presentation and require additional disclosures, all starting with the 2027 financial statements. Implementing this new standard presents unique challenges, requiring early planning and stakeholder alignment. In this article, KPMG reports from a recent KPMG-led panel with preparers from diverse industries. Panelists share their experiences, offering practical advice on addressing data impacts, internal controls, systems upgrades, Management Performance Measures, and auditor engagement. Key takeaways include the importance of a phased approach, cross-functional collaboration, and proactive communication to ensure a successful transition to the requirements in IFRS 18.
On December 16, 2025, we invited four implementers of IFRS 18 from diverse industries to join KPMG in a live virtual share forum. Over 1,200 webcast participants joined and were able to gain firsthand practical insights on why it’s important to start the IFRS 18 implementation process early. Below we have summarized the key points and challenges highlighted by our panelists, which can be leveraged to assist in your own implementation process. For those who weren’t able to join the live session, a replay is available here.
To learn more about the requirements of IFRS 18 and how they compare with US GAAP, read KPMG’s article, How companies communicate financial performance is changing. To understand what IFRS 18 means for your company’s financial statements, complete the IFRS 18 Complexity Scorecard – an intuitive online tool that provides a free, clear, and personalized assessment of your organization's specific implementation challenges.
Part 1: Strategic planning
Drivers for early implementation
Panelists discussed two primary drivers that have caused their companies to implement IFRS 18 early. The first driver is the sheer time and effort needed to implement the standard because implementation could represent a significant shift in a company’s reporting processes. They emphasized that the required time and effort increases with the complexity of a company’s corporate structure and operations.
The second primary driver for early implementation relates to the requirement to adopt the standard retrospectively. Panelists noted that their companies wanted to have IFRS 18-compliant figures by the end of 2025 to avoid retroactively restating comparative periods – an objective that required them to begin the process earlier.
One panelist noted that competing projects and shifting priorities further underscored the need for additional lead time. Lessons learned from other recent initiatives helped teams in the panelist’s company build realistic timelines and anticipate bottlenecks. Lastly, companies currently undergoing other transformation projects may want to incorporate IFRS 18 implementation into this ongoing work to benefit from established processes and ‘muscle memory’.
Avoid planning for manual workarounds
Panelists cautioned against planning for manual IFRS 18 workarounds, particularly for companies that already rely heavily on automated reporting systems. For organizations with semiannual or quarterly reporting, manual adjustments would be difficult to sustain. Developing a strong IT plan is critical to achieving consistent, scalable reporting and reducing reliance on manual processes. When system changes are required, companies should also consider their budgeting cycles to secure the necessary resources for implementation.
Materiality considerations
Panelists agreed that materiality should not drive decisions early in the project. Instead, companies should first assess the broad implications of IFRS 18 and reserve materiality determinations for the end of the process – when the full impact is clearer. This approach may result in more detailed reporting packages than in the past. Where smaller reporting packages previously received limited attention, IFRS 18 may require deeper analysis to ensure proper mapping, cost disaggregation, and a complete understanding of reporting requirements across all operations.
Part 2: Operational execution
System and data impacts
Companies with numerous consolidated entities, diverse IT systems, or a non-standardized chart of accounts will likely face heightened challenges when adapting to the new reporting requirements. Achieving the level of data granularity required under IFRS 18 – particularly for smaller operations not on standardized platforms – often necessitates further disaggregation and increased data collection efforts. For more complex organizations, modifying IT systems and automated processes to meet the standard's requirements can become a significant undertaking.
Panelists noted that most system modifications were driven by the need for greater reporting granularity, the creation of new general ledger accounts, and the mapping of foreign exchange differences . One panelist highlighted that more than 2,500 general ledger accounts in their organization could potentially be affected by IFRS 18.
Companies with system-generated cash flow statements should also anticipate adjustments, given that IFRS 18 will require cash flow statements to begin with operating profit. Redesigning automated processes to reflect this change will require close collaboration with IT teams to ensure systems remain accurate, scalable, and sustainable.
Internal controls
The implementation of IFRS 18 has implications for adoption controls as well as ongoing controls over financial reporting. As a result, panelists suggested that a company’s implementation project team collaborate closely with internal controls specialists to assess the full impact of process changes. Expanded controls may be necessary to address new disclosure requirements, including the identification of MPMs.
Even if initial assessments suggest minimal changes, it remains essential to document the conclusions reached and the rationale behind these conclusions. Panelists urged robust documentation on key decisions – supported by clear evidence of review and validation – is critical to maintaining institutional knowledge and demonstrating to auditors how the implementation was executed.
Management-defined performance measures (MPMs)
Panelists agreed that identifying MPMs early in the implementation process is essential. Early alignment allows teams to work with investor relations to prepare for questions and determine if new disclosure and communication requirements are addressed effectively. For European companies, this is also a good opportunity to reassess alignment between MPMs and Alternative Performance Measures (APMs), even though APMs are not directly linked to IFRS 18.
In addition, changes to the statement of cash flows may require companies to revisit APMs or other non-GAAP measures for continued clarity and consistency in external communications.
Part 3: People & collaboration
Team structure and stakeholder engagement
Panelists emphasized that a successful IFRS 18 implementation requires a cross-functional team with expertise not only in financial reporting and accounting, but also in systems, investor relations, FP&A, and treasury. Determining whether these internal stakeholders understand the changes and their impact on various processes demands extensive communication and collaboration. Because these stakeholders bring different perspectives and needs compared to those in accounting and financial reporting roles, involving them early helps surface concerns quickly and enables timely resolution.
Engage external stakeholders proactively
Panelists also highlighted the importance of engaging external stakeholders early in the process. For example, one panelist noted that changes in financial statement presentation required proactive communication with lenders to address the anticipated impact on debt covenant calculations. This includes discussing the new presentation of equity method investments or foreign exchange differences.
Auditor involvement
According to panelists, involving external auditors early supports knowledge sharing and reduces challenges later in the project. As with any new standard, clear and definitive guidance may not be immediately available, leading to varying interpretations. For instance, the treatment of foreign exchange differences on intercompany transactions remains an area of ongoing discussion. Engaging auditors from the outset not only helps align views but also contributes to a smoother audit process and a more effective implementation overall.
The takeaway
Implementing IFRS 18 is more than a technical exercise – it is an organization-wide transformation that affects data, systems, processes, controls, and people. The panelists’ experiences reaffirm that early, strategic planning is essential to manage resource constraints, navigate complex system modifications, achieve the required data granularity, and avoid future restatements. Success also depends on assembling a strong cross-functional team and proactively engaging key stakeholders – from investor relations to lenders to auditors – to support informed decision-making and smooth adoption. Significant IT and data hurdles should be expected, and early identification of MPMs is vital for managing new disclosure requirements. Finally, companies will consider revised internal controls for redesigned processes and should maintain a flexible approach to materiality as the significance of certain amounts evolves.
Our KPMG team stands ready to support you throughout your IFRS 18 implementation journey. Contact us when you are prepared to begin the conversation and we will be pleased to assist.
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