The upcoming standards IFRS 18, Presentation and Disclosure in Financial Statements, and ISSA 5000, Sustainability Assurance Engagements, may appear straightforward, but inadequate preparation could prove costly for organisations. Successful implementation likely demands far more resources and effort than many anticipate.
Recognising the complexity of these changes, the ACCA Technical Symposium 2025 brought together industry leaders and experts to examine emerging trends in corporate reporting, taxation and assurance. The one-day event in August updated professionals on critical developments while helping organisations prepare for regulatory changes.
‘There’s this mentality that IFRS 18 doesn’t change a lot – definitely not’
Big standard
Speaking during a panel discussion on navigating the evolving landscape of IFRS presentation and disclosure, Senthilnathan Sampath FCCA, partner at PwC Singapore, cautioned against viewing the upcoming IFRS 18 as a mere cosmetic change.
‘There’s this mentality that IFRS 18 doesn’t change a lot – they think it’s just a different presentation format, which they will be able to do by year’s end,’ Sampath said. ‘Definitely not. We are reiterating that this is a big standard. Entities should take the time to take this opportunity to look through their presentation and get to tell their story in the right manner to their investor community.’
Taking effect in 2027, IFRS 18 fundamentally restructures how businesses present their income statements, requiring them to implement granular account coding to trace every expense and income to its operational source across five categories: operating, investment, financing, income taxes and discontinued operations. There will also be three mandatory subtotals in the income statements, including operating profits.
This amounts to a great deal more than just structural changes or subtotals, according to Pearl Tan FCCA, adjunct associate professor of accounting at Singapore Management University. ‘It’s allowing investors and users to have a perspective of the income statement through management’s lens – looking at them from an inside perspective and making that perspective available to the marketplace,’ she said.
‘IFRS 18 is also about a mindset change’
She emphasised that income statements should provide useful, structured summaries of financial performance, with IFRS 18 creating a framework that enables profit and loss comparability across companies.
Enhanced transparency in performance reporting will deliver significant value to stakeholders, she said. ‘We have to think about IFRS 18 as more than just about structures – it’s also about a mindset change. It’s about closing the gap between management reporting and external reporting.’
Reality check
Despite the looming deadlines of IFRS 18 and ISSA 5000, many businesses remain preoccupied with other regulatory demands.
Sampath told the symposium that Singaporean businesses are primarily focused on the global minimum tax regime and US tariff implications. While they are beginning to explore technical solutions for IFRS 18 implementation, most are still in the early stages of understanding its requirements. ‘There are lots of discussions within the technical teams, trying to solve lots of implementation questions,’ he said.
In Malaysia, where some companies are in the process of early adopting IFRS 18, training departments are bolstering their capabilities through upskilling auditors, according to Tan Khoon Yeow FCCA, partner, learning and professional development, BDO. Early adoption, he said, is creating an ‘IFRS 18 financial reporting ecosystem. It forces everybody to work together to figure out implementation challenges.’
‘Having a single account code for impairment is not going to work any more’
Although IFRS 18 appears straightforward, it demands structural changes in financial activity tracking, categorisation and reporting. According to Danny Tan Boon Wooi FCCA, consultant at CR Consultancy, what may seem like a simple reclassification exercise requires companies to rethink how they collect data and chart accounts.
‘A lot of financial reporting teams are very used to IAS 1’s presentation style and the way we have classified things over many years,’ he explained. ‘There is a need to debunk things we have been doing in the past.’ A case in point is the misconception that operating, investing and financing categories mirror IAS 7 definitions. ‘It’s a really different thing altogether,’ he pointed out.
A significant change in IFRS 18 involves tracing impairments back to their sources, or permanent reductions in company asset value. ‘Having a single account code to just tackle impairment is not going to work any more,’ Tan Khoon Yeow said. ‘We have to go back to the mapping of the account codes and start creating more granular account codes that trace impairments back to their sources.’
Sustainability complexity
Meanwhile ISSA 5000, which takes effect from December 2026, introduces the concept of ‘double materiality’ to corporate reporting. Companies will be required to assess how sustainability issues affect their financial performance, and how their business activities impact society and the environment.
The enhanced assurance requirements and double materiality of ISSA 5000 will present new challenges, Gajendran Vyapuri FCCA, partner at EY, told the symposium. Double materiality evaluates both the impact of sustainability issues on corporate finances and the effects on society and the environment of corporate activities, elevating qualitative disclosures to equal status with quantitative ones. ‘Some information may not be financially material to the company, but it could be qualitatively material to the users of this information,’ he said.
He added that ISSA 5000 adopts a holistic approach to sustainability, recognising the interconnection between corporate success, environmental and social impacts, and financial outcomes. While materiality assessment parallels financial reporting practices, the standard still allows some flexibility.
‘Sustainability engagement can involve multiple materialities’
Based on both the subject matter under review and the nature of the information being assessed, materiality thresholds can vary across sustainability metrics. ‘Therefore, sustainability engagement can involve multiple materialities, depending on the subject matter that is being opined upon,’ Gajendran said.
The spectrum of users of ISSA 5000 extends beyond investors and regulators to include key consumers and local communities affected by business operations.
‘All these are taken into consideration before we decide what would be an appropriate planning materality,’ Gajendran said. ‘Who are the intended users? What are they concerned about? What would influence their decision? These are very important starting points in setting this materiality.’
While these concepts may seem overwhelming, Gajendran pointed to ACCA’s guidance papers – they include one on demystifying materiality – which are combined with familiar financial reporting principles and offer practical examples. ‘There is already guidance coming out on this, which we can use to familiarise ourselves with these concepts,’ he said.
