IFRS 18 is coming in 2027. The real challenge is comparing what companies report

IFRS 18 is approaching. The comparison problem starts now.

IFRS 18 will change how companies present their profit, but not necessarily how much profit they earn. That distinction matters for investors, analysts and finance teams. A reported operating profit figure in 2027 may not mean the same thing as a similarly named figure published in 2025 or 2026. The real challenge is to trace what moved, why it moved and whether the figures being compared are based on the same reporting perimeter and accounting presentation.

The standard replaces IAS 1 and applies to annual periods beginning on or after 1 January 2027, with early application permitted. The EU endorsed IFRS 18 on 13 February 2026, with publication in the Official Journal on 16 February 2026.12 Companies adopting it from 2027 will also need to present their 2026 comparative figures in the new format.

What changed by 19 October 2026?

The accounting standard itself is already issued and endorsed in the EU. The latest developments concern practical application, interpretation and the interaction between financial statements and regulatory reporting.

Earlier in 2026, the IFRS Interpretations Committee also considered questions involving management-defined performance measures, public communications, cash-related returns, financing activities, subtotal labelling and expense presentation. The June publications were tentative agenda decisions when issued.6

Why the 2026 comparatives matter more than the 2027 deadline

IFRS 18 introduces five categories in the statement of profit or loss: operating, investing, financing, income taxes and discontinued operations. It also requires two specified subtotals: operating profit or loss and profit or loss before financing and income taxes.1 Companies that already use the label “operating result” may have to change which items sit above or below that subtotal.

For calendar-year preparers first adopting IFRS 18 in 2027, the 2027 interim reports will present corresponding 2026 comparatives under the new presentation requirements. The 2027 annual statements will do the same for the previous annual period. This makes 2026 a transition and reconciliation year, even before the first mandatory IFRS 18 reporting period begins.

ESMA's February 2026 implementation statement urges issuers to prepare systems and internal processes and to disclose material expected effects when sufficiently known.7 A simple relabelling exercise may not be enough if the underlying line items cannot be reconstructed.

Wärtsilä: a concrete example of two different changes

Clarifo can trace IFRS 18 language to specific company reports. Wärtsilä is a useful example because its disclosures reveal an IFRS 18 classification issue alongside a separate business-portfolio change.

In its originally reported FY2025 income statement, Wärtsilä reported operating result of EUR 833 million on net sales of EUR 6,914 million. The operating result included EUR 17 million in results from associates and joint ventures. In its Q1 2026 interim report, Wärtsilä said that this associates and joint ventures line would move from operating to investing under IFRS 18. The report also describes expected classification changes involving foreign exchange differences, derivatives and returns on cash and cash equivalents.89

The second issue is distinct. In July 2026, Wärtsilä re-presented comparative information following the classification of Energy Storage as discontinued operations. On 1 October 2026, the group completed the transfer of the Energy Storage business to the 50/50 Valo joint venture.1011 The transaction changes the business perimeter; IFRS 18 will separately affect the presentation of specified income and expense items.

To make a reliable trend comparison, an analyst must identify the original number, the portfolio-related restatement and the accounting-presentation adjustment separately. Otherwise, a change in the definition of operating profit may be mistaken for a change in the underlying business.

Adjusted profit measures are a second comparison challenge

IFRS 18 introduces a single-note disclosure requirement for certain management-defined performance measures (MPMs). The definition does not cover every alternative performance measure (APM). It focuses on specified subtotals of income and expenses used in public communications outside the financial statements to communicate management's view of performance. Qualifying measures require explanations and a reconciliation to the most directly comparable IFRS total or subtotal, including relevant tax and non-controlling interest effects.1

Tokmanni's FY2025 financial statements bulletin describes the group's comparable EBITDA and EBIT measures, including adjustments for items affecting comparability.12 This is the type of disclosure a researcher can investigate, but the filing alone does not establish that every Tokmanni APM falls within IFRS 18's MPM definition. That determination must be made measure by measure.

Using Clarifo in ChatGPT and Claude to investigate IFRS 18

Clarifo connects Nordic and US company filings, financial data and source-linked reporting passages to research workflows in ChatGPT and Claude. Rather than relying on an AI model's recollection of a company report, analysts can ask questions against the underlying filing material and follow the cited passages back to their sources.13

A practical investigation has three stages:

For example, the following prompt can be used with Clarifo connected in ChatGPT or Claude:

Clarifo can support filing retrieval, financial analysis and evidence-linked comparisons. It does not automatically certify accounting compliance. Final classifications, approved transition numbers and published IFRS 18 disclosures remain the responsibility of the reporting entity and its reviewers.

Finance teams should now map existing income statement items into the new categories, prepare 2026 comparative reconciliations, review potential MPMs and ensure their reporting systems can reproduce the required detail. For analysts, the priority is to document which figures are comparable and which are not before 2027 earnings season begins.