Big changes on the way for Tier 1 and Tier 2 for-profits’ primary financial statements’ presentation

The last few years have seen significant changes to financial reporting requirements for Tier 1 and Tier 2 for-profit reporting entities.

IFRS 9 Financial Instruments, IFRS 15 Revenue from Contracts with Customers, IFRS 16 Leases and IFRS 17 Insurance Contracts have significantly changed the recognition and measurement requirements for financial instruments, revenue, leases and insurance contracts respectively.

However, the next IFRS Accounting Standard expected to be issued by the International Accounting Standards Board (IASB) will significantly change the presentation requirements of IFRS Accounting Standards. It is anticipated that this standard will also be adopted and issued by the New Zealand Accounting Standards Board (NZASB) here in New Zealand, and hence these changes will impact on Tier 1 and Tier 2 reporting entities.

In July 2023, the International Accounting Standards Board (IASB) completed technical work on its primary financial statements (PFS) project, which will conclude with the release of an IFRS Accounting Standard replacing IAS 1 Presentation of Financial Statements.

The new IFRS Accounting Standard will set out significant new requirements for how financial statements are presented, with particular focus on the statement of profit or loss, including requirements for:

  • Mandatory subtotals to be presented,
  • Aggregation and disaggregation of information, and
  • Disclosures related to management performance measures.

The IASB is expected to issue this new IFRS Accounting Standard, (likely to be numbered IFRS 18) in H1 2024 with an effective date expected to be for annual reporting periods beginning on or after 1 January 2027.

The final text of IFRS 18 is not yet available as at the time of this publication’s release, however, staff papers and decision summaries published by the IASB set out the conclusions reached by the Board and therefore, the fundamental requirements of IFRS 18 may be reasonably understood.

Please refer to our publication for a preliminary high-level overview of the expected requirements of (expected) IFRS 18, including:

  1. Requirements in IAS 1 expected to be brought forward into IFRS 18
  2. Areas of significant change from IAS 1 vs. IFRS 18
    • Categories in the statement of profit or loss
    • Line items and sub-totals
    • Labelling, aggregation and disaggregation
    • Statement of cash flows: operating cash flows, and classification of interest and dividend cash flows
    • Management performance measures
  3. Practical implications of the new requirements
  4. Transition and effective date
  5. How to get started


For more on the above, please contact your local BDO representative.