IFRS taxonomy update 2024: comments are in on changes for IFRS 18
The International Accounting Standards Board’s (IASB) move to update the IFRS Accounting Taxonomy follows the April 2024 release of IFRS 18, which sets a new standard for presenting and disclosing financial data.
IFRS 18 introduces a major overhaul of how financial information is presented and disclosed in financial statements, replacing IAS 1, and offering a marked improvement in terms of the digital reality of reporting today. The new standard requires an updated accompanying taxonomy, with stakeholder feedback on the draft published by the IFRS this week.
IFRS 18 aims to improve the clarity, consistency, and comparability of financial statements. Notable updates include new presentation and disclosure requirements aimed at improving how financial information is communicated. These include mandating the presentation of specific totals and subtotals in the statement of profit or loss, disclosing management-defined performance measures (MPMs), and refining principles for the aggregation and disaggregation of information.
Amongst the 15 comment letters (which you can explore here) received by the IASB, here at XBRL International we have encouraged the IASB to ‘skate to where the puck will be’. This means we would like to see a more ambitious approach – we believe concerns over current software limitations are unnecessary given the long implementation timeline for IFRS 18. We recommend adopting machine-readable metadata, which would enhance accuracy and enforce consistency through software features like drop-down menus. The necessary software improvements can be made in time, and embracing forward-thinking digital solutions will ensure that financial reporting evolves to meet the demands of tomorrow, unlocking greater transparency and insight for all.
The goal is to enhance transparency by standardising key metrics in financial statements and ensuring consistency in how income and expenses are classified across categories like operating, investing, and financing.
For more information and to view the comment letters, visit the IASB’s consultation page.
