The International Accounting Standards Board has introduced NZ IFRS 18: Presentation and Disclosure in Financial Statements, which will replace NZ IAS 1 and reshape how financial performance is presented.

These changes apply for reporting periods starting 1 January 2027, with retrospective application for 2026 comparatives. Early adoption is allowed, so you can get ahead of the curve if you choose.

What’s new?

• New income statement structure with clearer categories and mandatory subtotals.
• Improved grouping and labelling rules for greater clarity and comparability.
• Management-defined performance measures (MPMs), like EBITDA or adjusted profit, that are communicated publicly outside the financial statements must now be disclosed in the audited financial statements.
• Updates to related standards like NZ IAS 7, NZ IAS 33, and NZ IAS 34 to keep everything consistent.

While NZ IFRS 18 doesn’t change how profit is calculated, it does change how it’s presented, this means updates to your reporting processes and systems. Planning early will make the transition smooth and stress-free.

How can Baker Tilly Staples Rodway help?

• Assess the impact of NZ IFRS 18 on your financial statements
• Design new reporting formats and disclosures.
• Train your team so everyone’s confident with the changes.
• Support system updates and audit readiness.
• Assist your Board with understanding the changes and wider impacts (e.g., covenant calculations).
• Liaise with your auditors on adoption approach and reconciliation to previously reported amounts.

Early planning is critical! If you would like to discuss how these changes affect your business or start planning for implementation, please contact us.