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CCH Tagetik IFRS 18 Reporting

CCH Tagetik IFRS 18 Reporting

– CCH Tagetik IFRS 18 Reporting – 

PRESENTATION OF THE INCOME STATEMENT

IFRS 18 introduces a new reporting framework effective January 1, 2027

The IASB has published IFRS 18, Financial Reporting and Disclosures, which is a significant new standard that will fundamentally change the way companies structure and present their income statements. IFRS 18 will take effect on January 1, 2027, and applies to all companies regardless of industry. The standard introduces clearer classification categories and mandatory disclosure requirements aimed at improving the consistency and comparability of global reporting.

This is not merely a reporting update, but a major transformation project. The transition requires the redefinition and realignment of data, the redesign of financial statements, and the development of new notes based on various ERP systems and chart-of-accounts structures. Many organizations are already anticipating that the change effort will be substantial. Technology plays a key role in accelerating implementation and reducing overall costs.

We will review the key changes in IFRS 18 and how CCH Tagetik supports a smooth and efficient transition.

What will change with the introduction of IFRS 18?

  1. New income statement format

IFRS 18 introduces five clearly defined categories into the income statement, according to which all revenue and expenses are classified. This structure helps stakeholders better understand the company’s performance and the key drivers of its business model:

  1. Business Operations
  2. Investments
  3. Financing
  4. Income taxes
  5. Discontinued operations
  1. Two new required chapters

Going forward, companies must report operating profit as well as profit before financial items and income taxes. These figures will improve comparability between companies and industries.

  1. New rules for merging, splitting, and renaming

Stricter guidelines will ensure that items on the income statement are presented more clearly and will reduce inconsistencies in how entities structure their income statements.

  1. The scope of the audit includes the notes regarding the performance metrics defined by management

Entities must disclose information regarding management-defined performance measures (MPMs) to improve transparency and governance. The disclosures must describe, among other things:

  1. How are MPM metrics calculated?
  2. reconciliation to the nearest figure in accordance with IFRS
  3. impact on taxes and shareholders' interests

What does the transition to IFRS 18 mean for financial organizations?

Preparing for January 2027 requires immediate action. IFRS 18 affects the readiness of ERP data, CPM structures, controls, and notes to the financial statements. Key challenges include the following:

  1. Assessment of Materiality and Impact

Business organizations must assess which items in the income statement require reclassification, what new figures are needed, and how the current calculations will be allocated to the new categories.

  1. The complexity of data alignment

Organizations must map each entity’s chart of accounts to the categories specified in IFRS 18. Many companies use multiple ERP systems and multiple charts of accounts, which can significantly increase the amount of mapping work required. This is where automation and AI capabilities can deliver significant added value.

  1. Reporting of benchmark data for 2026

Entities must present comparable financial information for the year 2026. This means that most organizations will need to begin preparing their systems and collecting data well in advance of the standard’s effective date.

  1. New MPM attachments

Collecting adjustments, reconciling figures, and calculating tax and NCI effects require new processes and tools. NCI refers to the owners’ share.

  1. Change Management

As January 2027 approaches—at a time when the lifecycle of many consolidation tools is coming to an end—organizations are increasingly concerned about resource requirements, cross-functional complexity, support, and return on investment. With the right tools and a phased approach, the transition to IFRS 18 can be implemented in a controlled and efficient manner.

CCH® Tagetik accelerates IFRS 18 readiness with its intelligent platform

CCH® Tagetik streamlines the entire transition process, from data preparation to consolidated reporting.

CCH® Tagetik simplifies the implementation of IFRS 18 through a unified platform and intelligent features. These help finance organizations modernize their processes while reducing manual work and risks.

A unified platform ready for IFRS 18

  • Covers the entire process, from data preparation to reporting, consolidation, and the production of notes.
  • Enables flexible design of income statement structures using the Financial Statement Templates feature to define structures that comply with IFRS 18 requirements.

Expert-level AI for targeting, validation, and accuracy assurance

  • AI Automapping speeds up the mapping and classification of charts of accounts into revenue and expense categories in accordance with IFRS 18.
  • Anomaly detection and validation checks help identify errors at an early stage and reduce the need for manual verification.

Built-in IFRS 18 MPM workflows that minimize ERP adjustments

  • Predefined workflows for performance metrics defined by management.
  • Adjustment collection, KPI calculation, and automatic tax and NCI impacts can be managed directly at the CPM level, reducing the need for adjustments in the ERP system.

Smart Disclosure Management Solution

  • Microsoft 365-integrated metadata management ensures consistent, accurate, and data-driven reporting.
  • Generative AI supports the creation of consistent narratives, data comparisons, and commentary for the new disclosure requirements under IFRS 18.
  • Comprehensive standardization of the close-to-disclose process ensures that the "single source of truth" principle is upheld in all IFRS 18 reporting requirements.

Why act now?

IFRS 18 will affect the reporting of comparative data for 2026. In practice, companies have less than a year to prepare:

  • restate the income statement
  • reallocate the chart of accounts
  • update systems and workflows
  • prepare new notes
  • validate and audit data

Organizations that start early reduce risks, avoid last-minute rushes, and can use the transition as an opportunity to modernize their financial processes.

Whether you’re just starting to plan your transition to IFRS 18 or are tackling the topic for the first time, talk to our experts and move forward with confidence and clarity.