A new Australian standard for presentation and disclosure in financial statements (AASB 18)
A new Australian standard for presentation and disclosure in financial statements (AASB 18)
Effective date
AASB 18 replaces AASB 101 Presentation of Financial Statements and is effective as follows:
- For-profit entities, other than superannuation entities - for annual periods beginning on or after 1 January 2027
- Not-for-profit (NFP) private sector entities, NFP public sector entities and superannuation entities - for annual periods beginning on or after 1 January 2028.
What is AASB 18 about?
The aim of AASB 18 is to improve the comparability of financial performance between entities. While many requirements and disclosures contained in AASB 101 remain unchanged, the ‘big ticket’ changes include:
- Income and expenses must be classified in the statement of profit or loss into one of five categories – investing, financing, income taxes, discontinued operations and operating (this is a residual category if income and expenses are not classified into any of the other categories)
- Two new mandatory subtotals – operating profit or loss, and profit or loss before financing and income taxes
- Strict rules for labelling, aggregation and disaggregation of items in the financial statements
- New disclosures about management-defined performance measures
- Amendments to the presentation requirements for interest income and expenses, and dividend income in the statement of cash flows.
Our publication provides more information about these changes.
Why the delay for NFPs and superannuation entities?
The delayed application date for NFP and superannuation entities is to give the Board time to conduct outreach with stakeholders and assess whether they need to modify AASB 18 for these entities. For example, some of the changes described above may not be relevant for NFPs and superannuation entities.
What about Tier 2 entities applying the Simplified Disclosures?
The Board will also conduct outreach with stakeholders to determine if any of the presentation and disclosure requirements introduced in AASB 18 would be relevant for entities preparing Tier 2 general purpose financial statements in accordance with AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities.
Need help?
AASB 18 brings about significant changes to financial statements, requiring adjustments to current reporting systems and processes. Please contact our IFRS & Corporate Reporting team if you need help.