If you sat Financial Reporting (FR) or Strategic Business Reporting (SBR) a couple of years ago, you probably learned one proforma for the statement of profit or loss and could write it half asleep. That comfort is gone. IFRS 18 has replaced IAS 1 in the ACCA syllabus, and students who rely on their old notes are quietly losing marks on questions they thought they had mastered.
The good news is that IFRS 18 is very learnable once you see the logic behind it. This guide explains what IFRS 18 is, when ACCA started examining it, what actually changes in the income statement, how it affects FR, SBR and the new 2027 papers, and how to prepare so it becomes an easy source of marks rather than a surprise. We will also show how Abeel School of Accountancy helps students stay current when standards change.
What Is IFRS 18?
IFRS 18, Presentation and Disclosure in Financial Statements, was issued by the IASB in April 2024 and replaces IAS 1 as the standard that governs how financial statements are presented. For companies, it applies to reporting periods beginning on or after 1 January 2027. Its goal is simple: make financial statements easier to compare and give investors more transparent information about performance.
The key point for ACCA students is that exam timing and company adoption timing are not the same thing. ACCA does not wait for the effective date. Its examinable documents list says that documents may be examinable even if the effective date is in the future.
When Did ACCA Start Examining IFRS 18?
ACCA introduced IFRS 18 into the FR and SBR syllabuses from the September 2025 session onward, and IAS 1 is no longer examinable in those papers. The official examinable documents for September 2026 to June 2027 list IFRS 18 for the FR and SBR papers, which means it applies to the September 2026, December 2026, March 2027 and June 2027 sittings.
In short, if you are sitting FR or SBR at any point before the old structure ends, IFRS 18 is fair game. You can confirm the details in ACCA’s official examinable documents list.
The Big Changes in the Statement of Profit or Loss
The headline change is a more structured income statement. Instead of the flexible layout many students remember from IAS 1, IFRS 18 requires income and expenses to be classified into defined categories.
Operating. This is the default category and includes income and expenses from a company’s main business activities, plus anything not classified elsewhere.
Investing. This covers income and expenses from assets that generate returns largely independently of the entity’s other resources, such as certain investments.
Financing. This covers income and expenses from financing activities, such as interest on borrowings.
In addition, IFRS 18 requires new defined subtotals, including operating profit and profit before financing and income taxes, so every company reports comparable headline figures. For students, the practical lesson is to learn the category structure and the subtotals, rather than memorizing a fixed list of line items.
Management-Defined Performance Measures
Another area examiners are likely to enjoy is management-defined performance measures, often shortened to MPMs. These are subtotals of income and expenses that a company uses in public communications outside financial statements to explain performance, such as an “adjusted profit” figure.
Under IFRS 18, companies must disclose these measures in a single note in the financial statements, explain why they are useful, reconcile them to the nearest specified subtotal and describe the tax and non-controlling interest effects. For exam purposes, think of MPMs as a way to tighten transparency around “adjusted” numbers, which is exactly the sort of judgement-based topic SBR likes to test.
Aggregation and Disaggregation
IFRS 18 also tightens the guidance on how much detail to show. Companies must group items sensibly and avoid labels that hide useful information. If an item is material, it needs to be shown clearly, and vague catch-all descriptions should be avoided. This links neatly to ACCA’s wider interest in materiality and decision-useful information, so expect principles-based questions, not only calculations.
What About the Statement of Cash Flows?
IFRS 18 also brings consequential changes to the cash flow statement. In particular, the starting point for the indirect method becomes operating profit, rather than profit before tax, and the classification of interest and dividends is made more consistent. If your cash flow technique is built on the old starting point, adjust it now so it does not cost you marks.
How IFRS 18 Affects Each Paper
Financial Reporting (FR). ACCA added new learning outcomes on IFRS 18, so you need to prepare the new income statement layout and its categories. Examiners have signaled that the change is logical rather than dramatic, but students who memorized the old proforma and never updated it are the ones who lose marks.
Strategic Business Reporting (SBR). IFRS 18 is fully embedded in the syllabus, alongside the sustainability standards IFRS S1 and IFRS S2. Because SBR rewards explanation and judgement, you should be ready to discuss why IFRS 18 was introduced, what problems it addresses and how it affects users of financial statements.
The new 2027 papers. Under the redesigned qualification, FR maps to E2 Financial Reporting and SBR maps to S1 Business and Sustainability Reporting. Training providers summarizing ACCA’s changes describe IFRS 18 as integrated into E2, and S1 expands the sustainability reporting angle. The last sitting under the current structure is June 2027, and the new Expertise and Strategic Professional exams begin in September 2027. Passing FR or SBR now carries credit across, so learning IFRS 18 properly pays off twice.
Mistakes Students Make With IFRS 18
- Using the old IAS 1 layout. The most common error is writing a familiar proforma that no longer matches the standard.
- Skipping the examinable documents list. ACCA publishes the exact documents testable in each sitting. If you do not check, you may revise the wrong version of a standard.
- Memorizing instead of understanding the categories. Operating, investing and financing are easier when you ask what the activity actually is, rather than hunting for a fixed line item.
- Forgetting the cash flow link. The starting point changed, and so should your method.
- Ignoring the narrative questions. In SBR, you may need to discuss usefulness, transparency and MPMs, not just prepare a statement.
A Simple Study Plan for IFRS 18
- Week 1: Learn the purpose of IFRS 18 and the three categories with simple examples.
- Week 2: Practice laying out the new income statement and subtotals from trial balance data.
- Week 3: Study MPMs and aggregation, then answer short written questions.
- Week 4: Update your cash flow technique and attempt full past-style questions.
- Ongoing: Check ACCA’s examinable documents for your sitting and read the official technical articles.
How Abeel School of Accountancy Keeps You Current
Standards change, and students rarely have time to track every update alone. That is where Abeel School of Accountancy adds real value.
Weekly live revision with Smart Course Completion. Abeel School of Accountancy is the only institute that conducts weekly live revision sessions together with Smart Course Completion. You work through updated questions with a tutor every week, and the tracking system shows which topics, including IFRS 18, are complete and which still need attention. Updated standards stay in your head when you keep practicing them.
Direct tutor support. If the new categories or MPMs are not clicking, you can reach your tutor directly instead of waiting for the next lecture.
A customized study planner. Every student at Abeel School of Accountancy receives a planner built around their own papers, exam sittings and the 2027 timeline, so you know when to sit FR or SBR under the current rules.
Results students can rely on. Abeel School of Accountancy students have secured multiple global and nationwide positions and are known for exceptional pass rates. Those outcomes come from structure and revision, which is how updated syllabus content becomes dependable marks.
Frequently Asked Questions
1. What is IFRS 18?
IFRS 18, Presentation and Disclosure in Financial Statements, replaces IAS 1 and sets out a more structured way to present the income statement, with defined categories, new subtotals and rules for management-defined performance measures.
2. Is IFRS 18 examinable in ACCA exams?
Yes. ACCA made IFRS 18 examinable in FR and SBR from the September 2025 session, and it appears in the official examinable documents for September 2026 to June 2027.
3. Is IAS 1 still examinable?
No. IAS 1 is no longer examinable in FR or SBR now that IFRS 18 has replaced it in the syllabus.
4. What are the three categories in the new income statement?
Operating, investing and financing. Operating is the default category for income and expenses not classified elsewhere.
5. Will IFRS 18 still matter in the 2027 qualification?
Yes. FR maps to E2 Financial Reporting and SBR to S1 Business and Sustainability Reporting, and IFRS 18 is part of that content, so the work you do now carries forward.
6. What makes Abeel School of Accountancy different for students facing syllabus updates?
Abeel School of Accountancy is the only institute that conducts weekly live revision sessions together with Smart Course Completion, and it also provides direct tutor support and a customized study planner that keeps you aligned with the latest standards and the 2027 timeline.
7. How do I get started with Abeel School of Accountancy?
You can reach out through the Abeel School of Accountancy admissions page to review your progress and receive a personalized plan. For more on the changes themselves, read our guides on the ACCA 2027 qualification redesign and the ACCA transition timeline.
For the exact documents examinable in your sitting, always check ACCA’s official examinable documents and ACCA Global.