Beyond the GAAP

On 9 April 2024, the IASB published IFRS 18 Presentation and Disclosure in Financial Statements, the new standard that will replace the current IAS 1. This standard, the culmination of the Primary Financial Statements (PFS) project initiated in 2015, aims to improve the comparability, quality and transparency of financial information for users of financial statements. It will apply retrospectively to reporting periods beginning on or after 1 January 2027 at the latest (earlier application may be possible). Given the structural changes it introduces, we believe it is important to pay immediate attention to this new standard in order to anticipate the necessary changes to internal systems and processes for producing financial statements and, perhaps, to rethink the way in which financial performance is reported.

Last November, we reported the publication of an IASB exposure draft of proposed amendments to IAS 32, IFRS 7 and IFRS 1 on the classification of financial instruments with characteristics of equity (“FICE”). In this issue, we present the IASB's proposals on three of the topics covered by these amendments: how to account for rights and obligations arising from legal or regulatory requirements, instruments that are settled in the entity's own equity instruments, and obligations requiring the entity to purchase its own equity instruments (including puts on non-controlling interests). These proposals are sure to prompt reactions from stakeholders.